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How To Write A Business Plan & Why You Need One

write a business plan

How to write a business plan.

A business plan is a formal statement of business goals, reasons they can be reached and plans on how to attain them. It is a plan for your business. It is a very important step to growing your business. It is also not a very tricky thing, understanding plus applying the right technique is all it takes. Every entrepreneur should make out time to write a business plan, it may be stressful but it is a worthy time investment. Below are some major sections a business plan is divided into, this is to aid you in writing one:

1) Executive Summary: This is done at the beginning or ending (in some cases) segment of your business plan, it is a brief synopsis of your company visions. This section tends to be a summary of everything you are about to write or that you have written, it is concise and straight to the point, avoid bogus letters or being too verbose. This section should give a lay man a standard overview of what your business is about and where you plan to take it. It should be able to create an understanding of the intrinsic values of your business in as few words as possible, it is written in two pages maximum.

2) Q&A module: Here you answer the question of which service your company provides or the product it sells. These in addition to more questions would be answered in this division. This segment answers the question of who you are selling it, how large your target market is and the buying power of this market size. It also seeks to answer the questions of what your services are or what product you are selling, and explain why people will buy your product instead of others.

3) Plan Phase: In this segment, you would write about your system of enforcement. This is how you will carry out your plans for the business. You would talk about your marketing and operational plans here and explain in detail the unique product or service your company offers. You would write in details, your execution plans, how the business would be run from day to day, your goals maybe included here and of course a systematic plan on how you intend to achieve the goals of the company. This section needs to be written with utmost clarity and precision. Include also how you plan to reach your target audience and bring the products or services you offer to their awareness.

4) Team members/ partners: In this part, you would highlight the team members, the current employees/ partners, and those you would like to engage in future. Investors are always looking out for great teams. Make sure it is stated here who you are currently working with and those you intend to bring in, in future to partner with you, also state clearly the duties and position of each team player or employee and if the own any stake in the business state it here, previous investors are stated in this section too.

5) Financial plan: The financial division talks about the monetary plans and cash projections. What are the expenses and income? How much more does the business need? What is the projected earning over the next few years? This is the financial plan of the firm or business, where the cash flow plans are talked about and calculated respectively. Also state here how much is needed from the investors and what the money would likely be used for and what the returns on investments would be.

6) Appendix: This section serves as an extra and as a closing, if you have additional information to provide, and then add them here. The Appendix is your backup section for anything that might have been skipped while writing earlier sections.

Business plans are not quite easy to write, it may take one sometime to articulate everything because one will think deeply for the first time about the business. A business plan isn’t done and forgotten immediately, it is a plan you will always comeback to and update, correcting the places wrongly forecasted, and keep those that are right. It is a plan to be consulted from time to time and plans written therein adhered to. We have put together a couple of benefits you get for writing your business plan. As it is an opportunity to prove your mettle in the business market.

TOP REASONS WHY YOU NEED A BUSINESS PLAN!

1) Helps raise funds from high net worth professionals who would own a stake in the firm in exchange for financial support. These individuals need to see and go through it to make their investment decision. Most Lenders won’t have time to listen to you talk; they would request some of the previous accounts, and your business plan. A business plan not only indicates your seriousness to investors, it also showcases in brief the financial gains of investing in your company and this is what the investors want to see, they want to see the returns on investment. Your executive summary also tells them in brief what your business is about and the other sections help educate them on your plans to achieve your company goals. The business plan can be considered an instrument used in convincing lenders to part with their money.

2) It will also help run the business adequately; it helps to clarify the goals of the firm. It helps prioritize and sometimes serves as check for excesses, ensuring you stay focused. As earlier a stated it helps you prioritize and stick to what is important while ignoring distractions which may pop up from time to time. It is a guide you can use to keep the business on the right course so as not to deviate from the original planned course of action. You can keep consulting your business plan when confusion or doubts arise in future. This way it helps ensure efficient management of the business firm.

3) It helps manage financial flow together with planning retirement, the founders of a business may quit in future, it helps decide the exit strategy. It helps you plan your company finances right, including projected earning and expenses. Due to economic plan section, you can rightly know how much your business needs to spend too earn a certain amount and what to do with every percentage of your profit. It also helps you plan for an exit, especially if at some point the firm is sold or there is a merger, your business plan outlines how the founders would exit, and the severe package and if there would be any stakes held by the exiting pioneers.

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Orisaemeka Onyeneke
Professional Risk Manager/Adviser | Content Writer | Entrepreneur and a contributor @ Smpreneurs.com Contact me for business!
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