It may seem redundant to write a formal plan complete with details.
You’re pressed for time and resources. Who has time to formally document the business planning process?
The truth is, just like planning a writing project involves determining your audience and goals, the business plan steps require a similar approach for a few reasons.
Yes, every business is dynamic and unique. You need to do this in a way that works for your situation.
By learning how to write a business plan step by step, however, you can create a solid launch pad for your company to grow. Here’s how it works.
Planning a Writing Project Involves Determining Your Audience and Goals
Let’s say you sit down to write something. It could be a journal entry, book, or a blog post just like this one.
What are the first things you need to establish?
Planning a writing project involves determining who your audience is first and foremost. Next, you need to establish what you want to tell them – your goals for the writing.
Without narrowing down these points, your writing won’t have any direction or accomplish anything.
The Business Planning Process Is No Different
Your business planning process is very similar to writing. In fact, you should consider drafting an actual written plan.
So, who is your audience?
If you’re thinking customers you’d be wrong (it’s a good answer though). The audience for your business plan would be yourself and your potential investors.
Your business plan creates a solid foundation for you to build your business. You can always update things and make changes, but it’s always good to have a concrete plan in writing.
If you don’t think you need one, consider the alternative: winging it. Do you really want to play around with your money, time, and resources like that? Didn’t think so. It’s vital for growth.
Potential investors make up the second half of your audience. You might not plan on seeking out investors, but things change – you never know how you’ll feel once you jump in and get your hands dirty.
Your investors will want to see what you’re already spending money on, growth potential, debts, liabilities, profits, and so on. If you decide to seek out investors, you’ll want to have a plan ready to give them. It’s easier to make quick changes than create an entire portfolio if you need one in a pinch.
How to Write a Business Plan Step by Step
The goal of this document is to provide a thorough idea of where your business is at and where it’s going. Here’s how to write a business plan step by step or portion by portion.
- Executive summary: What does your company do and why will it be successful? What are your plans for long-term growth?
- Company description: Provide a more detailed description of your business. What kinds of problems will you solve? Who will make up your customers? Explain why your business is great and provide details.
- Market analysis: You can only do so much to grow your business with your own resources – the market has the final say. Who are your most successful competitors and what are they doing to succeed? What are the current trends?
- Organization and management: Who is in charge and what is the company legal structure?
- Products and services: Dive in deep. Talk about copyrights, patents, legal documents, and any company-sponsored research.
- Funding request: This is where you would tell readers how much money you need, how you’ll spend it, and how you will repay them. This could include any debt, bills, rent, or manufacturing costs.
- Financial projections: How is your business’s general outlook for the next five years? This is your opportunity to get in a few final words for investors or financers.
- Appendix: Here you will include any specific documents that either don’t fit into or could supplement other portions of the business plan. Resumes, reference letters, permits, patents, and licenses would all fit into the appendix.
Do I Really Need to Follow These Business Plan Steps?
You have one other option: the lean startup plan. This option is for smaller companies or more dynamic companies who may need to update portions of their plan.
- Key partnerships
- Key activities
- Key resources
- Value proposition
- Customer relationships
- Customer segments
- Channels: how will you reach customers?
- Cost structure
- Revenue streams
Short answer: yes, you need to follow these steps. Following these business plan steps will make sure you collect as much information as possible about your company.