How Do I Write a Business Plan?
Writing a business plan is one of the first things that you should do when starting up your company.
There are 4 reasons to create a business plan
1. As a strategy document from which to run the business
2. To align your internal team around strategies and forward projections.
3. To show financial advisors or investors you know what you’re doing.
4. To persuade business partners to align their plans with yours.
All four are fundamentally different from each other so, How Do I Write a Business Plan?
2, 3 and 4 are basically sales documents and should be aligned with your audience. They will expect to see a vision, often with an ambitious goal. They will expect to see revenue projections. And they will want to see enough detail to show these are not pipe-dreams but can be justified. But the aim of this document or pitchdeck is to deliver confidence in your competence.
1. is the truly difficult one. Here you have to delve much deeper into your market, your team including skills gaps and weaknesses and your methods for gathering intelligence, both inside and outside the business. You will be defining systems which will either outperform the market, or put you in a straitjacket which could over time kill the business. It involves some deep thought on why you do what you do, how you differentiate yourself from others and your position on a host of issues, from ethics to business methods.
And consider one simple truth.
Your business plan is a snapshot of your thinking on one particular date. It is wrong – it involves things you think you know, things you don’t know and things which will change, taking your projections with them.
If you are really creating a business plan from which to run your business, don’t. Create three systems instead.
DATA: Generate the intelligence to see what is changing in your business ahead of time. That way you can spot opportunities, make change before it is forced on you and move faster than those around you.
PROFIT: Set up robust systems which generate the revenues the business feeds off. Make sure these are transparent enough that you never have any rude surprises.
PEOPLE: Build your people resource. Set a trajectory for each person so they close their skills gaps, learn the ones you predict you will need and can add their ideas and visions to yours. Eliminate fixed job descriptions and responsibilities and build close, interdependent teams where everyone is doing what they are good at. Make sure communication is above self-advancement.
As to how – once you work out why, the how becomes apparent. Just answer the questions which come up from a thorough investigation of the why.
The structure:
A good business plan answers the five W’s (plus an H), not necessarily in this order.
Who
Who will be responsible for ensuring goals are accomplished? Who will be responsible for each segment of business operations? Who are they and how are they qualified to do what you say they can? Who is the target market? Who are your competitors?
What
What is the industry the business will operate in? What specifically will you do and what differentiates you from what currently exists? What do you need to be successful and what will it cost? What growth do you expect and what are the goals you’ve set for the company? What will the organizational structure be and what business model will you follow?
When
When do you plan on launching? When do you anticipate accomplishing growth goals? When will you break even?
Where
Where will your company physically be located? Where is your target market located? Where does your company fit into the industry?
Why
Investors want to know “Why should I invest in you?” Why do you want to start this business? Why will you be successful? Why will customers choose you over alternatives?
How
How will you reach your goals? How will you make yourself known to potential customers? How will you position your company in relation to competitors and how will they respond?
These are the basic, most important questions to answer in your business plan however, there are lots of other questions that may or may not be good to answer as well. Simply Google “Business plan template” (or click the link) and you can find templates where you can easily write down you answer.
Thank you for reading “How Do I Write a Business Plan?” Hopefully, you´ve now learnt the answer to “How Do I Write a Business Plan?” and can write a good one yourself.
Good luck with your startup!
