One of the fundamental areas to consider in starting a new business or restructuring an old business is to write a business plan. But then, writing a business plan is not the same as writing an academic paper or article for publication.
A business plan is different from articles, newsletters, academic papers, blog posts and social media posts. A business plan lays out an estimated and well crafted strategy on how a business should be operated to make it successful.
According to the Pareto Principle, only 20% out of 100% of businesses started will survive in ten years. Many businesses fail before their fifth anniversary. When businesses fail, a lot of things happen; investors lose their money, employees lose their jobs, business owners may go into debt, the community remains underdeveloped and economic hardships goes up!
Just like an architect draws up a building plan, so must the business owners go through the right process to write a business plan for the proposed business. The business plan must be developed with the right business model to make it survive and thrive in the marketplace.
Well, so how do you write a business plan?
Step #1: Determine your objective for the business plan
The first thing you do in developing a business plan is to determine the objective of the business plan. The objective determines the purpose and the reason for the business plan. It determines what you want to use the business plan for and what must go inside.
Many people write a business plan because they want to raise money from investors or creditors. Others also write a business plan to convince people about their proposed business projects so they can get partners for their business. Some also do it to guide them build the business.
Know and outline the reason for your business plan!
Step#2: Develop your business concept
Developing the business concept is an entrepreneurial assignment. This is often the job of the entrepreneur and the founding team. What you do in this level is to develop the concept, philosophy and core idea behind the business.
Your business concept must address four issues:
- The mission or purpose of the business.
- The vision of the business.
- The core values of the business.
- The business model for the business.
If your mission, vision, core values and business model is right, the business will succeed. And if your mission, vision, core values and business model is not practical or feasible your business will fail. It will fail over and over again until you make the necessary changes to make it succeed.
Step#3: Conduct a Feasibility Study
The way to determine whether your proposed business will succeed or not is to conduct a feasibility study! A feasibility study enables you to research market, financial, operation, legal and administrative data prior to starting the business plan.
So what you do here is to develop a feasibility study plan to conduct a research into the location, market and the industry you are planning to go into. Then work with a team of people to conduct an intensive research. This research process will check the viability and practicality of your business idea.
Step#4: Analyze Your Research Findings
Once you conduct your feasibility study and gather real data from the market place, you are on your way to write a business plan for your business. Your feasibility study should help you gather valuable research information such as:
- The demographic profile of your target market
- The psychographic profile of your target market
- The geographic profile of your target market
- The demand analysis of the target market
- The operations procedure for product/service delivery
- The operational costs for running the business
- The legal requirements of the business
- The human resources available for business development
Once you have gathered all this information, all you do at this level is to analyze the information and see how applicable it is to your business. Analyze the research information to know whether your business will succeed when it starts or it will fail before it starts. It will also help develop the best strategy to make the business work!
Step#5: Write the Business Plan
Once you have analyzed the research information and the impact it will have on your business, you can then develop the best strategies to make the business work. You have to also determine the right business model to make the business succeed and thrive in the market place.
At this level, all you do is to write each section of the strategies in a document: you list the operational strategies, marketing strategies, sales strategies, administrative strategies, management strategies, financial strategies, competitive analysis and many other strategies to make the business successful.
Notice that strategies are developed through well researched information—not by assumptions. Business strategies built on assumptions rather than facts don’t often succeed. So your business plan and business strategies must be built on facts of the business world.
Here is an outline to write a business plan:
- Executive Summary
- Core Ideology: Mission, Vision and Values
- Problem Analysis—the problem of your business want to solve for your customers.
- Objective Solutions –the business solution to the market problem
- SWOT Analysis—review of the strength, weakness, opportunities and threats of the market and industry competitors.
- Background/Environmental Profile—the political, economic, social, technological, ecological and legal actors of the business environment or location for which you want to set up the business.
- Industry Profile—a description of the industry your business is going into.
- Organizational Structure –the structure to manage the organization and the team when it starts.
- Legal Plan—the legal requirements in the setup and the operation of the business in the country.
- Marketing Plan—the place, product, promotion, people and positioning of the business in the market plan.
- Sales Plan—the strategic plan of how to attract and convert leads into customers for the business.
- Operations Plan—the plan of how to deliver the product or service of the customers.
- Financial Plan—a profile of the start-up cost, operational cost and financial projections of the business.
- Implementation & Action Plan—the action plan, monitoring and evaluation plan to set up the business.
- Future Feasibility—states the future opportunities, goals and objectives to explore through the business.
- Conclusion—a concise final statements of the business plan.
Hope you now understand how to write a business plan. Let us know your comments, questions and suggestions on this article.
Anyway, do you want to start your own business? We can help you write a business plan for your business project. We will help make the process easier and faster for you so you build your dream business.
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