how to do a business plan

how to do a business plan

Writing an Effective Business Plan

1. Introduction

It is certain that high aspirations often come overlaid with fear of failure and anxiety. Business today is a very competitive undertaking. Sometimes, when you’re in the thick of it, it is difficult to imagine taking the time to write a business plan. That’s when you really need it the most. Planning may be the second of the four functions of management, but it’s a good guess that it’s first in its your affection. Your business plan is a compass. It will help you map and strategize for taking your business from conception to reality. It is a dynamic tool that outlines your business growth and reflects your aims. If you’re starting a business, or if you’re looking to expand your current one, you’re going to need a solid, written business plan. This is a self-discovery process and essentially, while writing a business plan you will come face to face with many different aspects of your own business and clarify your own ideas. The plan will also serve as a record that you can revisit over time to remain focused and on track. With these points in mind, writing a good business plan today is much more of a creative effort than it was before. This is because, instead of mere copying something already in existence, a business plan today can be a visual expression that lays down the specific pieces of concept for that innovative idea. And throughout your mapping, you will keep a constant critical eye view right onto pragmatics. Being creative and being pragmatic are often two mutually exclusive things and it is the effective integration of both into a realistic plan that will put you on the path to success. Writing an effective plan that translates your ideas into reality is, as one might expect, no simple task. This booklet is a good place to start.

2. Executive Summary

Think of the beginning of the executive summary as a sales letter for your business. You need to explain why the reader should want to invest in your business. What does your business have to offer that will encourage others to act in a profitable way? Along with positive influences, you will also want to include background information about your business idea. Give a history of your field and discuss the skills and experiences of your company. This will give definition and impact your reader’s understanding of the purpose of your business. A good business plan always has a clear and definable mission. It is important that you are able to show what your company’s mission is (specific, relevant, and motivating), how it will get to accomplish the mission, and the progress of their mission is measurable. As you generate a clearer understanding of what you want to achieve, you will also be able to develop a clearer direction for your business. A clear mission can act in place of experience and guide you through making decisions, avoiding time and resource losses on alternative ideas. With clarity and simplicity, a focused direction can help you achieve great things with your business. A good business plan always has a clear and definable mission. It is important that you are able to show what your company’s mission is (specific, relevant, and motivating), how it will get to accomplish the mission, and the progress of their mission is measurable. As you generate a clearer understanding of what you want to achieve, you will also be able to develop a clearer direction for your business. A clear mission can act in place of experience and guide you through making decisions, avoiding time and resource losses on alternative ideas. With clarity and simplicity, a focused direction can help you achieve great things with your business.

A possible guideline for a short, standard executive summary is provided below.

Your executive summary should be written last to be able to pull everything together. It should provide a concise, clear, and persuasive overview of your business. The executive summary should touch on all of the important aspects of your business plan including what you are trying to do, what your goals are, and whether your business idea is worth pursuing. Keep the tone upbeat and get directly to the point respecting the reader’s time. If you meet their expectations, then they are likely to read more of your plan, going deeper into the details. Even though the executive summary is located near the beginning of the plan, it should be written last. This will ensure that it is able to pull everything together and provide a clear representation of your business. After you have written your executive summary, you should check to see if it gives easy understanding about your business, is able to engage the reader, and if you would invest money in the business idea after reading it.

3. Market Analysis

Thus far we have taken a brief look at your service or product offering. The prior section of your plan was the place to lay out and explain exactly what you were offering to your customers. This stage of the plan will concentrate on the actual market for your offering. It is crucial that you are able to present a well-researched and detailed analysis of the market in which you are proposing to sell. The market analysis is a crucial section of the business plan, as it helps you identify your best customers or clients. In the market analysis, research the primary target market for your product or service, including geographic location, demographics, your target market’s needs and how these needs are currently being met. Your purpose in the market analysis is to show that there is a demand for the product or service and how you will meet that demand.

4. Business Strategy

Vision: A networked healthcare community where all patient information is stored in a single electronic record, thus improving healthcare quality.

Mission: To improve healthcare for the nation.

An example of a mission and vision for the same company: XYZ Inc.

The vision is a statement that paints a picture of what the organization wants to become. It is inspirational in nature and less specific than a mission statement. A vision statement answers the question, “Where are we going?” It is compelling and drives the organization to work towards a better future.

The mission is a brief statement that defines why the organization exists and what it wants to become in the future. It should be broad in scope and very general. A mission statement typically answers the questions: What does this organization hope to achieve? What are the prime beliefs and values that we will adhere to?

This section covers the building of your business’ strategic plan. Begin with the identification of the business’ mission and vision.

5. Financial Projections

Now that all the required elements of the Business Plan have been built, it is crucial to reflect on its worth. Going through this process makes doing the business much easier and cost-effective compared to making changes to an existing business. A well-crafted business plan not only demonstrates the viability of the business but also maximizes the chances of success. Ultimately, executing the business plan, regardless of the challenges, is the key to achieving success.

The section “5. Financial Projections” provides a concise yet coherent overview of the key assumptions supporting revenue and expense projections. It emphasizes the importance of preparing annual pro-forma income statements, balance sheets, and cash flow statements. The text also highlights the need to summarize the financial projections while discussing how they were developed and acknowledging the inherent risks involved.