In order to create a successful business, you need to have a clear direction of what you want to achieve and how to get there. Writing out a business plan will highlight potential drawbacks, help you assess the likely viability within the relevant market and give you clarity on the business strategy. With an in-depth understanding of all of these aspects of your business, you will be better equipped to overcome any obstacles and make your business a success.
Your business plan should be detailed and informative, but as clear and concise as possible. It is something that you will refer to for multiple purposes, like presenting your business idea to potential investors, when hiring potential employees and when proposing a new partnership with another company.
To help you get started, here are 7 steps to take you through how to write your business plan:
1. Company overview
In the overview of your business, you simply want to provide clear answers to who you are, what your business has to offer, and why anyone should be interested in your business.
Begin with the basics such as the business concept brand name and style, company type and domain name. It is a good idea to determine the mission and vision of the business, as well as the brand traits and value proposition, keeping this as succinct as possible.
In this section you can also outline a brief overview of the business model, including the core product or service, target market and industry, and monetisation strategy. Finally, you can add an overview of the business structure and team, including the key personnel and their salaries.
2. Market analysis
Research your target market, to determine your target audience, including the audience size and specific demographics. Once you have done this, it is also good to work out the more targeted niche market to decide on your product niche and create your buyer persona.
It is useful to carry out competitive market research and an in-depth analysis of your competitors. Look at their business models and check out their websites to see what works and what does not, and in doing so you can also learn about how they monetise their websites. You should also be able to estimate the traffic they receive, and by comparing their public platforms, you will be able to gauge what is the primary driver of that traffic.
In order to make sure you cover everything, you can perform a SWOT analysis, evaluating the strengths, weaknesses, opportunities and threats your business may have.
Strengths will be internal resources and tangible assets, as well as your USP that makes you stand out from your competitors.
Weaknesses will be things your competitors are doing better than you, and any limitations or areas your business may be lacking in.
Opportunities will be gaps in the market, emerging trends and consumer demands, as well as media coverage.
Threats will be emerging competitors, consumer trends that are not moving in your favour, as well as any negative press.
Use the SWOT template that best fits your business needs, to easily organize your ideas and communicate it to others in an effective and clear way.
3. Product and services
After scoping out the market, you can decide on your product or service. Understanding consumer trends and what the competition has to offer, you will be in a better position to design a niche product or service that fills a gap in the market.
Outline the core product or service with a detailed description of the potential price range. This will include the target price, supplier costs, total cost per unit, net profit and profit margin per unit.
4. Marketing strategy
Planning out the marketing and advertising strategy will be very beneficial, and with all the previous competitor research you have already done, it should give you an idea of where to start.
In this section, remember to include the marketing budget, considering the cost of content creation, paid digital ads, any marketing tools you may need, influencer marketing if relevant to your market, PR and outreach.
5. Operations plan
In order to make it official, you need to set up business legally. Work out what local business licences you may need to obtain, choose a business name, and decide on what type of business you want, for example LLC or S-corp. You should also consider your manufacturers and shipping providers, and the annual costs of both.
When launching your website, you will need to decide on an ecommerce hosting platform, what apps and plugins you will need, and obtain an SSL certificate. Three plugins you will most certainly need to think about is the payment gateway, email opt-in software and Google analytics.
Other aspects to consider include researching keywords geared towards your target audience as well as what branded content you will need. Planning out an editorial calendar will help manage your outreach strategy.
6. Financial plan
It is important to think about all the costs the business will incur, from the start-up budget, to development costs, product costs, content costs and the marketing budget. You should also include details of your business bank account and tax ID.
In order to have a vision of the future, you should plan out the revenue forecast, with the conversion rate and transaction rate in relation to the average value order, so you are able to predict the estimated break-even point.
If you are looking for investment, having a thorough breakdown of these costs and your primary business model will allow you to justify your ask and set a realistic payback period.
7. Executive summary
Although this will go at the top of your business plan, it makes sense to write the executive summary last. Having covered everything there is to know about your business already, you will easily be able to condense the most important points into a couple of sentences that give an overview of the business concept, key brand messages, goals and vision, and how you will achieve that.