Do you know how to make a successful business plan?
If you are thinking of creating your own business or already have one, you have probably heard about business plans. This document is fundamental to know how a business works and what its viability is.
At No Commissions we take it very seriously that you achieve business success as effectively as possible.
At the beginning you will be overwhelmed with the amount of information you need to make your own business plan, but do not be discouraged, if you do it step by step and following some of the recommendations that we will give you below you will see how easy and fast it is.
The most important thing is that you know and have very clear what you want to undertake. With this information, the rest will be just a matter of knowing how to expose your ideas. Business plans are a document that cannot be missing in any company, so it is important that you devote the necessary time and do your best.
What is a Business Plan?
A business plan is a document that details your business and is created after a thorough analysis of what you are proposing. You can see some of the best examples of business plan shared on the Niche Beasts Blog. The idea is that it includes all kinds of information, such as what you are going to sell, where you are going to do it and who your target audience is.
It should also have details about the financing you require and how you plan to invest it, financial projections and other issues such as licenses you need from the government or real estate rentals.
What is a Business Plan for?
The reality is that a business plan seeks to make visible, both to yourself and to others, whether an idea is viable or not. It also allows you to see the risks and opportunities of your venture, knowing then what you will have to face.
It is very useful for entrepreneurs who are looking for sources of financing, since with it they can expose how the business idea would work. If you do it in the right way it is a fundamental tool to take the right direction and have greater opportunities for success.
If you do it on a company that is already in operation serves to detect failures in the process or create action plans to improve results. It seeks to make decision making easier and to detect irregularities.
How to Make a Business Plan Step by Step
As we said before, the business plan is a document that results from the analysis you make of your business idea or company and how you plan to develop it. For this document to be effective it must have some basic elements.
If you take into account the following points you will be able to make your business plan step by step. The order of the items is how it should be presented, but not necessarily how you should develop it, even the first point can be left to the end.
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The executive summary is a short text in which it is expressed in a general and simple way what the business idea is about. It should be very explanatory and easy to read, since it should be designed so that anyone can understand what your objectives are.
You can do it after having the complete content of the business plan, so you will have more clarity when writing it and you will be able to extract the fundamental ideas of each one of the items. Remember that it should be a maximum of one page and should contain certain key points.
This will be the first approach they will have with your business, so it should explain in a simple way everything the plan includes. It is a synopsis of everything that will be found inside the document and that is why it is important that it is engaging and very clear.
Summary: in no more than two paragraphs you must explain what the company is about, where it is located, what it sells and which are its customers.
Profile: within this text you must make a small profile of the company. This should include the structure of the business, the owners and each of the skills it will provide and also what would be the profiles of the first employees.
Products or Services: in a very brief way you must make clear what you are going to offer, that is to say, which products and services you will launch to the market and why they are better than others that already exist.
Market: Before starting any business, it is essential to have a clear idea of who it is aimed at. In this space you must detail it in a clear and summarized way.
Finance: Every business needs financing, so it is important that your executive summary includes where you plan to get the resources to start and what your future projections are.
Your business plans should have a detailed description of the company. Here you can expand all the information in the executive summary without being too extensive. You must include the whole structure of the business, how, when and why are questions that you will have to answer in a simple way.
Keep in mind that within this section it is important to make a description of the market needs you plan to meet with your business. Remember that it is always better to use simple language but express clearly everything that has to do with your business idea.
The executive summary should have a basic description of your market analysis, but here you will have to go into detail. Answer the basic questions such as who is your product or service aimed at and why that segment of the population was chosen.
You must be as detailed as possible with the target audience, so that you have a specific niche that you can later expand. You must analyze very well what profile would be interested in your product or service and why would you choose it over what already exists.
Making a buyer a person is always an option. Create profiles of your potential customers, use names, ages, professions and family life, so you can understand what they are looking for and why they would choose you to meet their needs.
Products or Services
Here you will have your opportunity to show why your product or service is important and will be welcomed in the market. Take the time to analyze it, see all its advantages and disadvantages, so you can make the description as accurate as possible.
Focus on what its added value is over others that already exist. In this space it is recommended that you be very descriptive, but also that you can argue, so you can use studies of other similar products or services and their development in the market.
If you have several lines of your product or service you should be very specific. For example, if you are going to launch a clothing brand, make a description of the men’s section and another of the women’s section. If there are sports, formal and informal categories, you should describe each one with its advantages and disadvantages described by Wall Street Prep guide.
Operations and Management
This part is very important, because here you will have to say very clearly how you plan to make your business work. Everything must be explained and summarized. Keep in mind that you can modify this later if you think it is necessary, but you must try to be as real and coherent as possible.
It’s all about how it will work, that is, who will be in charge of what tasks, how many people you need on your team, and what the roles and responsibilities of each member will be.
It is good that you make biographies of your work team, that you include knowledge, training and experience by which the responsibilities or tasks are assigned. Everything you can argue will serve to give more value to your business plan.
This is one of the most important points. You must say how you plan to promote and sell your service or product. What channels will you use to reach your target audience and why. If you are going to use digital marketing you will have to take into account different types of ads and social networks.
You should specify whether you will be doing ordinary advertising or using online marketing. If you have a physical point of sale, for example, you should include the visuals, logo and ads with which you plan to reach your customers.
Everything you think will help you sell your product should be in this part of your business plan. Take the time to do it the right way, so you will have a great advance in the moment of starting your business.
Forecasting Basically, as with pretty much anything else business-related, a robust plan will help you no end. With a cash flow forecast, you can plan what you expect your business’ finances to look like. A cash flow forecast is essential to any successful business plan. Granted, this plan will only be an estimate. But you will have based it on how you expect your business to perform. So if the forecast doesn’t match the actual figures you get, comparing the two may provide valuable insight into business costs and expenditure. Let’s say your utility bills are a lot higher than those budgeted for in the cash flow forecast. Maybe it’s time to switch electricity provider to ensure you’re getting the best deal. Or perhaps you could work on making the office a more energy-efficient space?
This point includes everything that has to do with money. From the amount you need to get started to what you expect to pay back over a period of months or even years. What do you plan to invest the money in and why.
Always include salaries and hours invested, both yours and your partners and team’s. Everything must be detailed. If you think about credits you must take into account how and when you are going to pay it, if you have to pay rent for premises or offices it must be in the budget.
Don’t leave anything out. If you need to move around in a car, consider the gasoline and the wear and tear of the vehicle, the internet and the equipment you use. Also, you must consider if you have to pay taxes or not and how to do it.
Examples of Business Plans
Business plans are not only for ventures, they can also be used in already established companies to make an evaluation of their evolution or to determine a plan of action that seeks to address a particular situation.
Depending on how you use your business plan, you can focus it on one of its aspects. Below we will give you some examples of business plans and what their objective would be:
For new Businesses: This business plan is made, generally to analyze the viability of a business idea. It is also used to apply for financing. Its information is always subject to change, although the author should take into account situations that may alter what has been foreseen.
For Operating Companies: it must take into account how the company is currently and whether the objectives set have been achieved. It is regularly used to create action plans to achieve better results.
For Managers: it is more focused on what has been done in the company so far and what the next steps should be. It includes a work guide and is used to make specific decisions.
For Investors: if you are looking for an investor for your company, you should highlight certain points in your business plan, such as financial projections. Everything you expect in a given time and how you are going to use the money you need.
Simple Business Plan: it is a document that is aimed at any type of person and therefore its preparation is simple and should be very easy to understand.
Standard: it is the one used in any type of business. It must have the description of all the important points of your company.
One Page: it is more of an executive summary but a little more detailed. The objective is to make sure that in one page the most important points of your business are known and understood.
Feasibility: it seeks to determine if the business idea is viable and if it will be successful in the market. You must specify the product or service, the need you want to cover and the difference with other similar ones.
Expansion: with this document you want to project if an expansion of your business is viable or not. Here you must make a description of the projections and the current situation to know if it is, or not, convenient to invest in growth.