A business plan is a crucial part of your small or medium-sized business. It is a blueprint of the feasibility of your business and its future. Many of you may be looking for a business loan to help push your SMB into the big leagues. Creating a business plan helps you get to where you want to go.
A business plan is more inclined toward being a necessity than a need. It doesn’t matter if you sell seashells under your porch or groom animals in a garage, you need a robust business plan. We know that it drives you haywire to create one if you have no prior experience. Before you get down writing a business plan for your SMB, let us give you a few pointers.
Business plan must-do: Get the format and grammar right — every time
Let’s be honest, nobody likes a formal document of this importance to be as dented as a drunkard’s car hood or full of grammatical errors. No! Nobody is telling you to be a ruthless Grammar Nazi, but avoiding grammatical mistakes can be the least that you can do. A business plan can be formal or informal and can be detailed or simple. Irrespective of what type of business plan you’re writing, make sure that you keep it crisp and concise. Remember, the shredder is just at an arm’s distance from the reader.
A simple format can go the distance
It is generally advised to stick to your guns but also keep it simple. So, just formalize the tone, break down the plan into various sections, and provide the answers that they’re looking for.
How to write a successful business plan
Let’s take a look at the breakdown of a successful business plan. The following should exist in a business plan:
It’s a “no-brainer” that the title page should have your SMB’s name, logo, and business tagline if your company has one. The title page must include your complete business address, date of drafting, and communication information.
When presenting your business plan to a second or third party, make sure that you include the name and title of the individual and the company.
Index / table of contents
Including a simple table of contents makes the business plan very presentable and helps save the precious time of the reader. The reader will know exactly what page to read as all the sections are cited with their page numbers.
This little segment can make a world of a difference in your business plan. An executive summary provides an overview of the SMB, its vision, and the goals for future. It should give the reader a gist of your entire detailed business plan. Although, this segment is to be added to the plan first, it is always made right at the end of drafting your business plan. Once you’ve completed the business plan, sit down and carefully summarize your plan into a few paragraphs.
Company description / business overview
Provide a brief summary of the history of your SMB and how it’s a perfect fit for the current industrial trends. Describe what influenced you to start your small business. Mention how your company is working for a greater good and achieving its long-term targets.
Company and team milestones
Add a description of the demography of your business, focusing on the employees and the team members. Explain how they are helping you achieve your targets. What have you achieved so far and who do you need to hire to be more successful are some of the questions that should be answered in this section.
This section may be clubbed with the business overview section — providing it separately adds value to the business plan. Describe what products or services you are offering and how they are better than your rivals.
Intimate the reader about who your target audience is and how are they going to benefit from the product. Keep it uptight and crisp.
Market analyses and competition
This section should provide the details of the overall size of the market. Besides, it should describe that you have thoroughly analyzed your product’s demand and have found the target market. Include estimate tables or graphs with units and volumes of the product demand.
A competitive analysis will provide an assessment of your products against the rivals and how it will not fizzle-out against them.
An operating plan will comprise of the tangible assets that you require for your small business. It may include things like inventory, equipment, supplies, office space, etc.
We recommend breaking it down into subsections like: Supplies, Equipment, Production, Facilities, Staffing and Development. The operating plan needs to be thorough and detailed, hence breaking it down is always a smart move.
Management plan and ownership
Seldom is a business plan complete without the inclusion of this section. Included in this section are the descriptions of the legal structure of your business (LLC, partnerships, corporations, etc.) along with the key managerial roles. As this section is reckoned to be slightly lengthy, we recommend splitting it into sub-sections like: Human Resources, Management Team, External Resources & Services, and Ownership Structure.
This, undoubtedly, is the most important section in the entire business plan, so take some time to think this thoroughly. A financial plan will talk about the financial forecast of the business along with the running costs and operating costs. This section is critical when seeking funding or looking for investors. Included in the financial data should be balance sheet, break-even analysis, statement of cash flow, cash flow projections, and income statements. While it is important to include historical data, do not forget to mention the forecasted finances of your business.
For small businesses seeking investors or external funding, an official request has to be presented in this section. For home businesses, this section can be left out of the plan.
In some cases, the individual or company may skip to this section directly after skimming through the report, so keep things tidy and state clearly the amounts required and why.
Going from business plan draft to business plan document
Very impressive! You’ve got yourself a skeletal frame for the business plan, and most of you are all set to hit those keys and type. But before rushing into it, we recommend that you create several drafts, circulate them, and then read them multiple times. It’s not always possible to get the business plan perfect in the first go, so don’t hang your head in sorrow if you don’t win the majority of the nods. You can consult a professional who has prior experience in drafting business plans. Use the expertise and value the skills they bring to the table. Once you think that the plan is ready and foolproof, you are good to go!