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How To Write a Business Plan: Start a Business in 10 Steps

How To Write a Business Plan: Start a Business in 10 Steps

The business plan template is searched approximately 163,000 times a month. I'm here to tell you to stop searching because, in this article, I'll be showing you how to make the ultimate business plan.

Business plans are absolutely essential for any business. Why?
Well, because a solid business plan will allow you.

1. Rigorously assess idea feasibility.
2. Research and find insights on target markets.
3. Assess your competition. These are all things that you need to do in order to make your business as successful as it can be.

And when the time comes, investors will rely heavily on your business plan to evaluate the feasibility of your business before funding it.

Executive Summary

The first part of every business plan is the executive summary, the executive summary's purpose is to distill everything in the business plan into a single page, and give a high-level overview of your business. This is like the Canadian tuxedo, almost like a blazer over a flannel shirt. Overall, the lack of a one-page may make it seem like it would be impossible to squeeze in a lot of information, but trust me, it isn't.

What I like to do is break down each section of the business plan into one or two sentences to ensure that everything is succinct and easy to read.

Here's what your business plan executive summary should include:

1. Your business concept
2. Business goals and vision
3. Product differentiation and description
4. Your target market
5. Your marketing plan
6. Your current financial state
7. Projected financial
8. State the ask. So if you are asking for money, how much are you asking for & your team.

For more ideas on how to identify your target market, be sure to check out how to build a brand.

Company Overview

This section of your business plan should include two fundamental questions.

Who are you and what is your plan to do?
Answering these questions provides an introduction to why you're in business, why you're different, what you have going for you, and why you'd be a good investment.

To answer these questions, you'll want to include these components in your overview:

Your business structure.
For example, is your business a sole proprietorship? A general partnership? Is it a limited partnership? Is it an incorporated company? This can be visualized by an organizational chart. You also want to share the nature of your business. What are you selling? Now specify the industry. Are you in fashion? Electronics? What is your landscape currently look like and where could it be heading? You're going to also want to list your team, including key personnel and their salaries.

If I was doing this right now, it would just be me. But I would also want to include future plans for scaling up my company. So I can see here that you've got four years of working experience as a good boy? Can you start on Monday? Or I could just leave it as me.

You can also use this section to highlight background information on your business or its history. Get creative and be authentic in this part. This is where you can really draw people in and have them invest in how it all started for you. So I thought it might be good to provide an example here. So, ''Sit With Me'' the dog rescue that I volunteer for and run the store for, has been operating since 2012 and since then we've gone on to help over 1200 dogs.

How To Write a Business Plan: Start a Business in 10 Steps

We do not discriminate based off of breed, medical history, or age, so every dog has a chance to find its forever home through our rescue. And we also do not have anyone that's making a salary, so it's entirely volunteer-based. it's all by the good graces of our community and everyone that's out there willing to put in money, time, and effort to help these dogs.

Vision, Mission, and Values

A big component of your company overview will be outlining your business's vision, mission, and values. I'm going to do a deep dive into this one with you.

To define your values. Start thinking about all the people that your company is accountable to, including

  • Owners
  • Employees
  • Suppliers
  • Customers
  • Investors

Now, I want you to consider how you'd like to conduct business with each of them. As you make a list, your core values should start to emerge. For example, Ikea lists some of its values as humbleness and willpower. Leadership by example, and daring to be different.

How To Write a Business Plan: Start a Business in 10 Steps

The mission statement

Your statement should explain in a convincing manner and ideally a single sentence why your business exists. For example, Shopify's mission statement is "make commerce better for everyone". It's the why behind everything we do and it's crystal clear and needs no further explanation.

Craft your vision statement

What impact do you envision your business having on the world when you've achieved your vision? Make sure you phrase that impact using assertive language. For example, Nike's vision statement is to bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete.

Include your business objectives, both short and long-term
I like to keep my goals on track by ensuring that they are smart. Meaning specific, measurable, attainable, realistic, and time-bound. Now get ready to do some serious work as the next part of this plan, we'll be diving into market research.

Market Analysis

For the marketing analysis section, you want to be including an overview of your potential market, an analysis of your business's position within that market, and an overview of the competitive landscape. If you choose the right market with the right products, one with plenty of customers who understand and need your product, you'll most likely have a headstart on success. 

When diving into potential markets, you will need to be looking into as much relevant independent data as possible to validate your business. This can be a huge task, but I find that breaking it down into two starting points, then becomes much more manageable.

I seek to identify my ideal customer profile
A customer profile should be a detailed factual description of your target audience. For example, if you're targeting millennial customers in the US I would first start by looking at government data about the size of that group.

I researched relevant industry trends and trajectories
I like to approach this section by going to Google Trends and using keywords as a jumping-off point and then diving into more granular data. For example, the Halloween mask business.

We would go to Google Trends, type in Halloween masks, and then get granular on the results page. Look at things such as where this industry has peaked outside of seasonal time. We would then dive into what made it peak and have a look at some of the search terms and show shifts and changes in the popularity of the industry.

From here, We will then dive into government statistics offices, industry associations, academic researches, and respectable news outlets, which will cover the industry to see and understand the landscape.

Now, when assessing my business's position in the market, I like to use a SWOT analysis to break things down.

Using a grid format.
Listing out the strengths, weaknesses, opportunities, and threats to your business. I like using SWOT because you can clearly see the positive and negative internal and external factors that may impact your business visually.

Competitor Analysis 

For this analysis, I like to include a list of a few companies that I would consider direct competitors, and then I state how I plan to differentiate my product and business from theirs.

Products and services section

You want to provide more detailed information here on your products and state why your product stands out in the market. Like before, we want things to be succinct and visual. Patents, copyrights, and trademarks that you own or have applied for should also be listed in this section.

Customer Segmentation

In the customer segmentation section, you want to give a holistic overview of your ideal customer. A lot of this information should be clear to you after you've done preliminary research on your target market.

When talking about your customers in this section, you want to include a number of general and specific demographic characteristics:

  • Such as where they live
  • Their age range
  • Their level of education
  • How much they earn
  • Their values
  • Beliefs or opinions

Ideally, you should be specific enough that it is very clear who you are trying to reach with your business and, more importantly, why you have made the decisions you have based on

1. Who your customers are?
2. What they value?

Marketing Plan

Here your plan should describe your current and future strategies for marketing your product to your ideal customers. For example, assuming I own a phone case company and know that a lot of my audience is on Tickcock, I will show that I plan to leverage that knowledge to pay on that platform, which has been done using materials created specifically for my key clients.

I will then also include how I plan to measure the success of that campaign. Now, although sometimes marketing is seen as purely promotional, your plan should include information on the following, four key subjects:

Price. so how much does your product cost?
Product, what are you selling, and how do you plan to differentiate yourself in the market?

Place. Where will you sell your products?
And finally promotion. How will you bring your products to your ideal customer?

By including these, you're showing investors and yourself that you have thought about every facet of how your marketing strategy will be effective in driving customers to your business.

Logistics and Operations Plan

You really want to cover all parts of your business operation in this section. Including where you get the raw materials you need for production or where your products are produced.

Financial Plan 

Highlighting if you'll make, manufacturer, wholesale, or drop ship your product.

Then stating how long it takes to produce your products and get them shipped. You'll also want to touch on how you might handle a busy season or an unexpected spike in demand discussing facilities. For example. Where you and your team members will work? Do you have plans to have a physical retail space? If so, where? Outlining the tools and technology that you require in order to be up and running.

This includes everything from computers to light bulbs. Finally, discuss how you are handling inventory. For example, how much would you hand and where would it be stored? how will you send it to partners when needed, and keep an eye on incoming and outgoing inventory? This section should demonstrate that you have got a solid understanding of your supply chain and a strong contingency plan in case of any possible uncertainty.
Finally, we're going to end with the financial plan.
Now I know what you're thinking, boring, but I assure you this will be an important step in your business plan. The level of detail required in your financial plan will really depend on your audience and goals.

Typically you need to include three major views of your financials.

  • An income statement
  • A balance sheet
  • A cash flow statement

Your income statement is designed to give your readers a look at your sources of income and expenses over a fixed period.

Your balance sheet should offer a look at the amount of equity you have in your business. On the one hand, it will list all the assets of your company, that is, what you own, and on the other hand, all your liabilities. So what you owe. This will provide a snapshot of your business's shareholder equity, which is calculated as. Assets minus liabilities = equity.

Now, your cash flow statement is similar to your income statement with one important difference. It takes into account when revenues are collected and when expenses are paid. This can be particularly helpful in identifying gaps or negative cash flows & forecasting your cash flow statement to adjust operations as needed.

If you're worried right now about how to best format this out because numbers and math are not really your thing. Don't be put off by this section. Shopify has created a set of formatted sheets specifically for helping you formulate this section of your business plan.

Value of a Business Plan

By taking the time to develop your business plan, you're actually achieving a number of extremely beneficial things for your business. A business plan will allow you to evaluate your business idea. For your business to be successful, it needs to be tangible. This plan will help solidify that.

It will also help you plan the next phase of your business. It will help you think about scale and scope. This will start you thinking about hiring additional employees or even forming partnerships. In addition, it will clarify strategies, objectives, and tactics and make them feasible.

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