10 Essential Steps to Writing a Business Plan

A business plan Writing a Business Plan is a document that provides key details about your company. It is a crucial part of convincing investors, clients and other stakeholders that your idea has potential.

The executive summary is an overview of your entire business plan, written in one page or less. It includes your company description and an explanation of your unique selling point (USP). This section also outlines your current financial state and projections.

1. Know Your Market

The first part of a business plan should describe the industry you’re entering and your unique perspective on it. This can include a market size analysis, forecasts, and trends. You can draw data from a variety of sources, including Statista and IBISWorld.

The next part of a business plan should describe your products and services. Explain why they are necessary or essential in the market and how you plan to differentiate yourself from the competition.

This section should also cover logistical details such as sourcing and procurement strategies, customer service, and quality control standards. It’s also a great place to include any relevant patents, charts or other information that didn’t fit organically elsewhere in your plan. The best business plans are clear and concise. Use plain language instead of industry jargon and avoid overstating projections. Investors and lenders will want to see realistic numbers.

2. Know Your Competition

In a competitive business landscape, knowing your competition is crucial. Whether you are trying to set yourself apart from your competition by serving a niche audience or distinguishing yourself through marketing, you need to know what your competitors are doing.

The competitor analysis section of your business plan should describe who they are, their strengths and weaknesses, their opportunities and threats, as well as how you will differentiate yourself from them. This section should be updated regularly, if not monthly, as the competitive landscape can change quickly.

This comprehensive guide offers a detailed sample business plan that is a great resource for new businesses and existing ones looking to make strategic changes. It also includes a thorough description of how each section of the business plan should look. Using this guide as a reference will help you catch small details that might slip through the cracks.

3. Know Your Business

A business plan is a document that addresses the key constituencies of a new venture: (1) The market, (2) Investors, and (3) The producer. Too often, entrepreneurs and inventors focus on describing their product or technology in glowing terms, while neglecting the market and the financial viability of the venture.

A good business plan describes the market opportunity and your plans for capitalizing on it, the current financial state of the company, and the projected financial state in the future. It should also describe the legal structure of the company (e.g., sole proprietorship, partnership or corporation) and any other important details such as patents and trademarks.

Lastly, it should explain how your products or services differentiate from the competition in a clear and compelling way. The more unique the differentiation, the better. The plan should also include a section on the company’s patents and trademarks.

4. Know Your Financials

A traditional business plan includes an executive summary at the start, which encapsulates the key elements of your business. This is designed to grab the attention of investors and entice them to read the rest of your plan in detail. It should include a mission statement, the products or services your company offers and a summary of your financial projections.

The next section is the financial analysis, which is critical if you are seeking funding from investors or lenders. This will provide details on your past financial history, such as income or profit-and-loss statements, balance sheets and cash flow statements. It will also include future projections, such as sales growth, expenses and net income. Graphs and charts are often used to make the information easier to understand. Be realistic in your projections and use past data as a guide.

5. Know Your Management Team

Whether you are writing for yourself or to attract investors, your business plan should be concise and well-researched. Seasoned investors and bankers can quickly spot unrealistic financial projections, so be sure to thoroughly review your business’s finances and make accurate calculations.

Investors often bet on the team behind a new business, so include short bios of your management team as well as their relevant experience and recognition. Also, share more about your company structure and how you plan to manage costs.

If you have additional documents that can help to illustrate your business’s potential, consider including them in an appendix. This can include local permits, licenses and deeds; professional certifications; media clips; or key customer contracts and purchase orders. The Harvard Business School has a great guide for creating an effective appendix.

6. Know Your Marketing Strategy

A business plan can be a powerful tool when it comes to attracting investors and partners. It can also help you think through barriers and discover opportunities you may have overlooked subconsciously.

A good plan begins with an executive summary that gives a snapshot of your business’s key elements. It should hook readers and entice them to explore the plan in detail.

The next section is your company description, which explains what makes your product or service unique and how it fits into the market. This is also a chance to show off your business’s backstory and give an overview of your operations.

The final section is your marketing strategy and plan, which details how you intend to market your product or service. This can include things like your target audience, messaging and goals. You can also include the results of any marketing tests you’ve run.

7. Know Your Pricing Strategy

There are several ways to approach pricing, but the most important is finding a strategy that connects with your target audience. Whether you want to beat competitors’ prices or communicate your product’s value, your business plan should clearly outline your pricing strategy.

You can include a pricing section in your business plan, or you can use a separate document to explain how your products and services are priced. The amount of detail you provide here depends on your intended audience—corporations may require a more extensive plan, while small businesses or startups can get away with a concise one. Regardless of your approach, be sure to do your research! This is an opportunity to show that you understand your market. It will help you stand out from your competition.

8. Know Your Technology

The products or services section is where you get to talk about what your company has to offer and how it fits into the current market. This is also the place to discuss your unique approach and explain your patents or trademarks if you have them.

Depending on your goals, you may opt for the traditional business plan format which is highly detail-oriented and can be dozens of pages long. You can also choose to use a lean startup business plan which is high-level focused and takes about an hour to write.

Lastly, an appendix is often used to include documents that were specifically requested by the lender or investor. This could include credit histories, resumes, product pictures, legal documents such as local permits, licenses or deeds, media clips and information on any patents. This is optional, but can be helpful if you’re seeking a larger investment.

9. Know Your Brand

The business plan is a critical document that can help you sell your company to investors or qualify for a loan with lenders. It can also serve as a guide to keep you and your team on track with your goals.

A good business plan starts with a clear, concise introduction that showcases the company’s impact and why it matters. It then outlines products and services.

This sample business plan template has an executive summary that highlights the key points of your plan, plus a company description, market analysis and funding request. It also includes a table of contents and an appendix for documents like credit histories, resumes, letters of reference, legal documentation, product pictures, licenses, deeds, patents and more. This makes it easy for readers to find what they’re looking for. Then, they can jump to the sections that are most relevant to their interests.

10. Know Your Business Strategy

If you’re aiming to impress investors or other stakeholders, make sure your business plan includes a clearly defined company mission. Explain why you started the business and how your unique products or services will address a market need better than competitors.

You’ll also want to include a summary of your financial growth projections, a description of your management team and short bios that highlight their relevant experience. Many businesses also choose to add an appendix with additional documents, such as credit histories, resumes, product pictures, letters of reference and licenses and patents that may not fit naturally within the plan itself.

With the right guidance and planning, you can write a winning business plan. A free business plan template can provide a skeleton for each section, from financial projections to market research, ensuring nothing is overlooked.