Your teacher may ask you to write a business plan before graduating college. And the purpose is to evaluate whether you can present profitable ideas and a solid growth plan for a potential entity.
A good business plan includes an executive summary, market analysis, management and organization, products and services, customer segmentation, marketing plan, and a financial plan.
Here’s how to write the plan:
1. Start With an Executive Summary
An executive summary is important because it gives a potential reader an overview of the business. The summary should be 1 to 4 pages long or at most 10% of the entire document and have only the most important points drawn from the entire business plan.
This section should highlight your business idea, objective and vision, product description, target market, marketing plan, projected financial state, cost of the business, and employees.
Ideally, the executive summary explains who you’re and what plans you have. By creating a good first impression in this area, you send out a bold message that you have a unique identity and you’re your business is likely to be different from many similar entities.
2. Conduct a Market Analysis
A good business plan includes a comprehensive market analysis. While examining a market is no child’s play, it’s a sure way to identify an environment that favors the products or services you intend to sell to prospects.
Therefore:
- Determine the size of the market.
- Identify how your potential business fits in.
- Examine the competitive advantage.
The bottom line is you should focus on the right market at the right time. Otherwise, the business may struggle to make sales.
3. Highlight Management and Organization
Here’s where you focus on the people who will run the business.
- Include the roles and responsibilities of each team member.
- Mention how each member will contribute to the favorable outcome of the gross profit or markup.
- State whether the business will integrate into a corporation, limited partnership or sole proprietorship.
4. List the Products and Services
Most parts of your business plan will focus on the products and services you intend to offer. Still, you can have a small section that highlights the key details.
- State whether the products or services sell in large quantities or otherwise.
- Tell potential investors and lenders about the new products or services you look forward to introducing into the business and explain how they’ll increase the profit margins.
- Mention the origin of your products.
5. Do a Comprehensive Customer Segmentation
Customers form the base of a business plan, which is why you have to think about them when making deliberate decisions. Here’s where segmentation comes in.
Outline the general and specific attributes of the target customers, including their age range, area of residence, levels of education, earnings, technologies, values, beliefs, and behavioral patterns.
6. Define Your Marketing Plan
Your document needs to demonstrate a clear marketing plan that clearly indicates your present decisions and upcoming game plan. The plan should feature product, price, place, and promotion factors:
- Product: Mention the products or services you intend to offer and explain why they are important.
- Price: Indicate the cost products or service, followed by reasons to justify the price point.
- Place: Explain to lenders or investors about the location of the business, as well as why the location is suitable for the products or services.
- Promotion: State how you intend to present your products or services to the consumers.
7. Write a Clear Logistics and Operations Plan
The logistics and operations plan section covers the strategies you’ll use to convert your business idea into a reality. Mention the suppliers, production, facilities, equipment, shipping and fulfillment, and inventory.
- Suppliers: Mention who produces your products or where your raw materials come from.
- Production: Mention whether you’ll be manufacturing, wholesaling, making, or drop shipping products. Mention how long it will take to produce products and the shipping duration.
- Facilities: Mention whether your team will have a physical space and where it will be.
- Equipment: Mention equipment and technologies you’ll need to run the business. Examples include computers, office desks, and printers.
- Shipping and Fulfillment: Mention whether you’ll handle all the shipping and fulfillment free of charge or if you’ll be using third-party partners for fulfilment.
- Inventory: Mention the quantity of the supply, storage of the stock, and the ways to get the products to partners.
Write this section well because investors and potential lenders like to ensure a person understands their supply chain before the offer funding.
8. Make Your Financial Plan Clear
A clear financial plan is one of the important elements of a business plan. If you think about it, financial health is what makes a business live or die regardless of the amount of the amount of money you’ve invested.
Potential investors and stakeholders want to connect and work with businesses that are applicable for the predicted future. So you have to get the financial plan in order before you pitch your business idea.
Here’s where you detail all your financials, including the balance sheet, cash flow statement, and income statement with their respective financial data and prognosis.
- Balance Sheet: A balance sheet helps you to determine how fair your business is. The balance sheet features a list of your business’s assets and liability. Deducting liabilities from the assets will give you the equity of your business.
- Income Statement: The income statement gives stakeholders and investors a clear picture of your fees and sources of earnings.
- Cash Flow Statement: The cash flow statement is somewhat similar to the income statement with a slight difference. Record earnings collected and charges paid. The statement helps a business to determine if it has surplus, if cash isn’t enough, and if it needs to initiate plan B.
How Long Does It Take to Write a Business Plan?
The period to write a business plan varies based on your experience and the depth of the information that you need to provide to get the job done. In our writing experience, the average time to complete a comprehensive business plan is usually 7 days.