Starting a business is no small feat. From the moment the idea pops into your head to the day you become the owner of a truly successful business, you will put in thousands upon thousands of hours of hard work and dedication. Of course, doing the initial research to figure out whether or not your idea is worth pursuing is vital. There are many business blogs you should read for research. However, one of the most undervalued and important parts of the process is creating a business plan. If you're wondering how to write a business plan, you've come to the right place.
What is a Business Plan?
In the most basic terms, a business plan is a document that outlines the objectives you envision for your business and the strategies you've come up with for achieving them. Creating a business plan from scratch isn't complicated; it just requires thought. You don't need to do any math or write beautifully. You just need to get your plan organized on paper.
The key to creating an excellent business plan is to take it seriously. The number one mistake that many would-be entrepreneurs make is to fill their business plan with fantasies, and unattainable goals that they think will impress investors. There's no need to put on a show. Instead, be honest and realistic.
Who is Your Plan For?
First and foremost, you. If you don't believe in your business plan, why would anyone else? However, there are a number of people and institutions that your plan can convince that will help you in the long run, such as:
- Financing: Whether your sources for seed money are friends, family, or a bank, if you make a stellar business plan, the time and effort you put in will be apparent. Financial models show where you want your business to go and how you plan to get there. Including concrete things like this can make all the difference.
- Investors: If your friends and family are going into business with you, you may or may not need a plan (which is not recommended). Angel investors and venture capitalists will always require a well-thought-out business plan.
- Employees: If you want talented employees to join you before you're even up and running, you need something to show them and convince them that there is a future with you and that your venture has value.
- Partnerships: Working with a partner to get your venture up and running could be a defining factor in your business's success. When a partnership is formed between two companies, you agree to share the work, the profit, and loyal customers.
- Legal Aid: Legally, how are you going to structure your business? If you aren't sure, bring your business plan to a lawyer, and they can help you. Figuring out the right designation for your business is just one of many ways a business lawyer can help you succeed.
Components of a Business Plan
Every great business plan needs to include some key components. Use these essential elements to build a business plan template that is customized to your own idea. The perfect business plan will speak for itself as it draws investors in.
Executive Summary
This opening section should describe your business in great detail. Even though it will be the first couple pages of your plan, it is recommended that you write it last. Once you've completed the rest of the business plan, you'll have cultivated a deep and detailed understanding of your business. The executive summary should:
- Introduce your company
- Explain what you do
- Describe what you want readers to understand
Opportunities and Objectives
This section should expand on your executive summary by answering some crucial questions, such as:
- What does your company do?
- What goods or services are you selling?
- What problem are you solving or need are you filling?
- Who is your target audience?
- Who is your competition?
You've got to understand these questions and their answers inside and out. If you do it right, the opportunities and objectives portion is where the actual substance of your business plan will shine. You can show what makes you unique and how your business will grow.
Execution
This is another meaty section. Here, you need to explain how you will take your idea and turn it into a business. Detail your sales and marketing plans, how you plan to run operations, and what milestones you have laid out to ensure you stay on the track to success.
Operations and Management Summary
If you're already up and running, this section is a great place to highlight the success of your current legal structure, location, and company management team. Whether your business is already established or not, you should know what you want your management team and company structure to look like.
Analysis of Finances
- No business plan is complete without a financial plan. You'll want to include:
- A sales forecast
- A cash flow statement
- A personnel plan
- An income statement (also known as a profit and loss statement. Learn more here.)
- A balance sheet
- An exit strategy
Being pragmatic about your financial future means a lot to investors. Take the time to dig deep and be serious about your financial analysis, it will be worth it.
Appendix
This is the final section of your business plan. If you need additional space for product
information, images, graphs, charts, or any other important information that you haven't
already included, put it all in here.
Fund Your Small Business With AdvancePoint Capital
Creating a great business plan isn't difficult. If you are dedicated to your idea and determined to make it a reality, this will be one of the best things you ever do. If you're in the initial stages of starting your business and you need help finding the right financing options for your business, contact our team of finance experts at AdvancePoint Capital. Do you have bad credit? That's okay. Your credit history doesn't automatically shut you out of the market; you still have options, and experts will be happy to discuss them with you.
