How To Write A Winning Business Plan
You’ve got a brilliant idea, and you’ve mapped it all out as a feasible, money-making possibility. You might have saved up some capital or secured funding, but you’re going to need a solid business plan to turn your dreams into reality. Don’t worry if you’ve never written a business plan before, help is at hand! Here’s how to write a winning business plan for your new business.
What is a business plan?
Think of your business plan as a roadmap of how you want to structure, manage and grow your business in the future – essentially, a document that maps out your route to success.
Your business plan is an essential planning tool that gives you the chance to outline and demonstrate that the things you want to achieve with your new venture are solid, viable, revenue-generating ideas. A winning business plan will help you attract a talented workforce, as well as impress potential business partners and investors or secure funding down the line. Your business plan will change and evolve with you as your business grows, so think of it as a working document for you to revisit as and when you need to.
How do I write a good business plan?
There’s no right or wrong way to write a business plan – you can put it together in a way that best suits your needs. But what you need to make sure of, is that you’re crystal-clear on exactly what you want to achieve. Without planning where your business is going, there’s the danger it won’t go anywhere at all.
Things to include are:
Business description – who you are and what you do
The market problem – what gap or need your business is answering
How your business will solve it – why your business is the solution
Target market – who you are going to sell to
Competitor analysis – why your company is better or differs from your competitors
Sales and marketing plan – how you will reach and sell to your audience
Financial projections – how you will make money
Team structure – who will be involved
Realistic timelines – outline goals and set deadlines for notable milestones
How long should my business plan be?
Your business plan should include whatever is needed to excite the reader (a potential investor or important new hire) about your business idea, demonstrate that you understand your market and outline how you’re going to make your business successful. So, in short, as long as it’s clearly written and covers the essential parts of your plan, the overall length isn’t too important. That being said, don’t waffle and be as concise as you can!
What should I include in my business plan?
This all depends on what you’re trying to communicate. Are you a start-up business and this is an initial venture? Are you proposing an internal business plan for a new project? Or are you writing a business plan to propose company growth or expansion to potential investors?
Generally speaking, if you’re starting a new enterprise, begin with a simple, one-page business plan that you can expand on over time. However, for example, if you’re looking to use investors’ money to fund a new venture and there are external financial risks involved, a long-form business plan that goes into more detail evidencing your ideas might be more beneficial to you. This will include more detailed supporting documentation, financial projections, cash flow forecasts and a more in-depth look at your budgeting and finance sections from an accountant or bookkeeper for professional validation.
Even if you end up needing a more comprehensive, long-form business plan down the line, a good place for most businesses to start is with a one-pager.
Writing a successful business plan
Some business plans may contain more or less information, but here are some key things you’ll want to include.
Describe your business
This is your opportunity to present your business idea and state your value proposition.
Describe exactly what need your product or service addresses for your customer and evidence your key features and benefits. Clearly outline the unique value you will provide, the problems you are solving and highlight why your product or service will do this over your competitors.
Research what are your competitors are up to
Do your research. What other choices do your potential customers have to choose from in the market and how are you going to serve them better?
You’ll want to show where your gap in the market is and how viable it is that you can take a good and sustainable proportion of the market share. Explain who your top competitors are and why, and make direct comparisons to your own business.
Analyse your industry so you can show you have a good understanding of what it takes to be successful in your field.
You could also perform a SWOT analysis on your business.
S – strengths
W – weaknesses
O – opportunities
T – threats
This strategic planning technique gives you a realistic, fact-based look at the future potential of your business and can guide you toward strategies that are more likely to be successful.
Include your sales and marketing strategy
Creating a sales and marketing strategy from scratch can seem daunting if you haven’t done it before, but try to think of it in simple terms. How are you going to tell people about your business? Are you going to use social media? Does your target market read trade publications? Are you going to sell to your customers online, in person or both? Writing down your plans and setting out your goals is an integral part of your business plan.
Next, ask yourself what kind of consumers are going to benefit from your product and show the methods you’ll use to reach them. Here’s where you should document a strong route-to-market strategy and purposefully detail how you’re going to connect with potential buyers and the pricing structure you intend to use to sell to them.
In your business plan, you should demonstrate that you understand who your target market is, what your ideal customer looks like and what their buying personas are. You could also go a little further and show how you intend to retain customers once they are buying from you. Attracting customers is important but a carefully considered customer retention strategy shows long-term viability for your business.
Translate your plans into numbers
In this section, you’re going to need to convince the reader that your business will be financially successful. In short, you’ll evidence how you are going to make money by translating the contents of your plan into numbers.
Ask yourself questions like:
What is the business cost structure and what are the revenue streams?
How many sales will you realistically make in the first year?
How many sales will you need to make a profit?
When will your business break even?
Essentially, in this part of your business plan, you should show how you will generate revenue, make a profit, and that your pricing structure is viable and sustainable when balanced against your outgoings. Outline your budget and sales goals clearly by showing your projected revenue (you can do this by creating a cash flow forecast), your expenses and your potential profit. You should also use this section to predict any financing or funding requirements.
If you’re new to building a cash flow forecast or budgeting and would like free access to tools that can help you, either sign up for cash flow forecasting software or download this free cash flow forecasting template spreadsheet.
If you are already running a business and you’re using your business plan to secure investment or expand, for example, you should set out historical financial information for your business for the last three to five years if available. You should provide an up-to-date balance sheet, a profit and loss account and highlight any major capital expenditure made.
Then, you should prepare a projected forecast for the next three to five years using the same format as you used for the historical information to make comparison easier.
Who else will be involved?
Even if the grand total of employees in your business right now is just you, outlining a company structure and notable roles you want to hire for in your business plan shows you’ve considered who and how they’re going to be involved in building your business. Even though these people don’t exist yet, describe the roles and key responsibilities and why they are necessary to the success of the business.
Having a holistic view of your potential company structure will help the reader understand why you and your future team are the right people to make this business a success.
Show a proposed timeline
To give the reader a complete overview of your business proposal, it’s a good idea to state how and when you’re going to achieve certain steps in your plan.
Here’s where you can mention a proposed timeline, any stand-out milestones to be achieved and say why they’re important. This helps break down everything you need to do into manageable steps, shows how and when you’re going to execute them and what’ll you need to do to make them happen.
How do I display my information?
This part is up to you, but the best way to deliver your information is as clearly and simply as possible. Your data should be visually appealing and easy to read. Use charts, graphs, diagrams and graphics to help you display your information. Be honest, direct, to the point, and avoid using too much jargon or internal lingo. Always explain any acronyms you use at least once so your document is universally understood on first read.
Remember to include any supporting documents or materials too, like product images or patents, licenses or permits you have, and any other contract or legal documents.
So now you have the basics of writing that winning business plan: know your industry, capture your reader, keep it concise and easy-to-digest, and don’t forget to make it look good! But most of all, you believe in your business idea, so use your business plan to make others believe in it too.
Need a hand getting started? Here are some business plan templates to help you write your own.
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