Writing the Perfect Business Plan
Table of Contents
A step-by-step guide to writing the perfect Business Plan
A business plan is vital for succeeding as a company. It doesn’t matter if you’re trying to build a corporate strategy, identify roadblocks to success or evaluate the effectiveness of your business; you need a good plan. It’s the foundation upon which a business can build a strong structure – countless companies would be lost without their business plan because it gives you a roadmap to each step in the execution of your business.
Many businesspeople like to take a step back and assess the viability of their idea before committing resources and capital to start it. Writing a business plan helps you to take all the thoughts and observations you’ve made and organize them into a cohesive, clear space. Maple Canada is here to help.
Business Plans 101 – What is a Business Plan?
So, what is a business plan?
Your business plan is a document that tells someone who looks at it anything they could need to know about your prospective company. It will cover information like staffing, finance, your business model, your services, and anything else necessary.
An investor should be able to read your plan and clearly understand what you’re trying to do. It should be easy to understand and informative – a business plan can make a difference when trying to get funding.
Why You Should Write a Business Plan
As we said, investors need a plan to know if they want to invest in your company. However, even if you’re not looking for funding, you still benefit from writing a plan. Let’s look at how you can gain from a business plan together:
- Writing your business plan can help you plan your next steps properly.
- You can use a business plan to evaluate the strengths and weaknesses of your venture – if it’s not viable, you’ll know.
- When you write a business plan, you’ll do market research on your target audience – this information saves you time later.
- A business plan can show the new staff your goals and help with recruitment.
- If you’re looking to partner with another company, a business plan helps to present critical information.
- A business plan requires research into your industry so that you can start with information about the competition.
The Different Business Plan Formats
There is no set way to write a business plan. Some are just a single side of A4, and others are dozens of pages long. It’s hard to know what to pick, but broadly speaking, there are three main types of business plans to choose from:
Traditional Business Plans
Traditional business plans are often dozens of pages long, and they’re what venture capitalists and lenders want to see. This is the format we’ll cover in a little while.
Lean Business Plans
Lean business plans are condensed versions of traditional plans. They’re mainly used for recruitment because they only give critical information about the business.
Nonprofit Business Plans
If you’re a charity or group that doesn’t make a profit, this is like a traditional business plan, but it focuses primarily on the public impact the business can have.
Writing a Business Plan Step-By-Step
Your best chance for success comes from a structured business plan. You need to know what to say about your business and to order the information cohesively. We’ve put together a step-by-step guide for making a traditional business plan. Feel free to use this guide as the skeleton for a business plan but add any information relevant to your business that needs to be included.
1. Write an executive summary of the business
The executive summary is the first thing we want to discuss but the last part of your business plan. The summary is where you take all the main features of your business and distil these concepts into simple ideas that can tell an investor or prospective hire what you want to do with the company at a glance.
You shouldn’t need more than one page for your business plan summary, but it needs to include the following information:
- The business concept – what does your company do?
- Your goals – what do you want the company to do in the future?
- Product differentiation – what makes your product or service stand out?
- Your target market – who are you selling your products to?
- Your marketing strategy – how do you plan to target customers and sell them your products?
- Your finances – what do you earn right now, and what do you expect to make later?
- The request for capital – how much money do you need to start the business?
- Your team – who is going to run the company? What key positions have you filled?
2. Describe the company in detail
Describing the company should be easy. You can talk freely about your business, what you want to do with it, and how you’ll pursue your goals inside the company.
You need to answer two main questions when talking about your company:
Who are you?
What do you want to do?
Answering these questions helps you focus your business. The business plan lets you answer them by writing a company description. Even if you’re only writing a business plan for yourself, it’s still helpful to recontextualise and ground your business in the moment. You can evaluate your philosophies and values and check to see if they’re still applicable at this planning stage – if not, it’s time to think again.
Let’s talk about what you should include in the company description:
- Your business model
- The industry you work in
- Your vision, mission and values
- Background information on the history of the company
- Your business objectives – now and in the future
- Your key staff and their roles
Some of these ideas will be harder to define than others – that’s okay. The point of this business plan section is to think about the important stuff. You had an idea to start the company but now is where you “stress test” your business ideas – see if they stand up to scrutiny.
Once you have worked out these points, you can write a mission statement. This single sentence tells everyone what you’re trying to do as a company.
The next thing you should do is make a vision statement – this is the impact you want your business to have on the world, whether it’s becoming an industry leader or helping your local community to thrive.
The last thing you must put in a company description is your SMART goals. Remember, these goals must be realistic, quantifiable and have a timeframe. This helps show what you’re expected to accomplish within a given period.
3. Conduct a market analysis of the industry
Going into business involves choosing a market and industry. Who are you going to sell products to?
The market you choose can help or hinder your company. If you pick the wrong market at the wrong time, you’ll find it’s an uphill battle to get customers. Let’s talk about what you need to think about in market research.
How big is the market?
Market size is your first big consideration. If you want to project lots of purchases, you need to find the data to evidence that. There are a few strategies you can use to make market research easier:
- Ensure you understand the customer profile you want to target. Learn about them, and find out what they like and don’t like.
- Look at trends within your industry. If you target a specific age group, see how many people will reach that group in the next five years.
- Use data to identify if your target market will grow or shrink in the next few years.
Try to make informed guesses about your market. You’ll never get it right with 100% accuracy, so the best you can hope for is market research that gives you a reasonable basis – investors are content with estimates about market activity.
Have you done a SWOT analysis?
It would help if you did a SWOT analysis for your target market. A SWOT analysis looks at the strengths, weaknesses, opportunities and threats of your business.
By breaking down these aspects and applying them to your research and overall business plan, you can be critical about your business and yourself as a businessperson. This helps you to make intelligent choices when planning a company and to look for ways to improve your skill set if necessary.
The competitive analysis
If you want to stand out as a business, there are three main areas to think about – cost leadership, differentiation and segmentation.
Cost leadership is all about your ability to change prices to adjust your profits. How will you balance making money and keeping your prices reasonable for customers?
Differentiation is all about how you stand out from the crowd. How do you make your product unique among established competitors, so people help to build your brand?
Segmentation is all about the industry niche you want to focus on. How specific are your products or services?
As a business, you must pick one of these areas to focus on. It’s a decision influenced chiefly by the current landscape of your industry and your business specifically.
You need to talk about your competitors as part of market research. You need to identify who they are, and if you’re not going to have any direct competition, look at people offering similar solutions for the problem you’re trying to solve. There are no businesses that have zero competition.
4. Talk about organization and management
The management and organization section of a business plan is relatively straightforward – you list all the people who are working in management or other key positions in the company and outline the legal structure.
Some business plans have organisational charts to show how the internal structure of the company works, which is helpful if you’re struggling to work it out yourself or you need to show an investor.
5. Showcase your products and services
You’ll probably talk about your services and products throughout your business plan, but you should also have a dedicated section for describing what you offer in detail. If you sell many products, ensure you give information about each collection. If you only sell a handful of products, provide them with a lot of detail.
It would help if you talked about future product lines too. How will they be profitable? It’s also recommended to talk about where products are coming from – if you’re working with a company, assembling things in-house or using drop shipping.
6. Show customer segmentation
Your target market is the basis of your marketing plan and your company. Therefore, you need to show that you’ve collected information to build a complete profile of your ideal customer. Who they are, what they like and what they shop for should inform all the business decisions you make.
Your segmentation should look at where your customer lives, how old they are, their level of education, how they act, what they do for fun, what kind of job they have, how much they earn, and their values and beliefs.
This information helps you to identify who you’re trying to sell to and what you need to do to appeal to them with your products. Consider how much they spend on your type of service in a month – it helps to work out pricing.
7. Create a marketing plan
A marketing plan is a normal part of any successful business plan. Knowing what your business will do is good – but you need to know what your marketing will look like to get those customers.
To tailor your marketing, you need to focus on one of the four main marketing areas. This means focusing on prices, products, promotions and places.
Knowing how much you’re selling, what you’re selling, how you’ll promote it and where you’ll sell it form the basis of a well-rounded marketing plan.
8. Create an operations and logistics plan
A successful business is only as strong as the thought that has gone into logistics and operations. For example, where will you store your inventory, and how will you ship it to customers?
Here are some key areas to think about with logistics:
- Your suppliers – where are you getting your materials or products from?
- The production – are you producing and building products in-house? Are you going to need to work with a manufacturing company?
- Your facilities – where will you work? How many team members do you need?
- Your equipment – what tools do you need for your business?
- The shipping – how will you ship your products and fulfill your orders?
It would help if you had a supply chain worked out and summarized before you go into an investor meeting or get started. Logistics are a big part of any business, so don’t wing it – that’s begging for the company to collapse after two weeks.
9. Show a clear financial plan
It doesn’t matter if your business will set the industry on fire and usher in a new era if it isn’t financially sustainable. You need evidence that your plans are economically feasible and you’ve worked out the costs.
Your finances section must show three things – a balance sheet, an income statement and cash-flow projections.
Top Tips For Making a Small Business Plan
Making a small business plan is more complex than it looks. Here are our top tips for doing so:
Know your target audience
You need to know who will be part of your target audience and what they’ll look for in a service provider. It will shape all the decisions you make.
Have clear goals and aspirations
If you have a clear, realistic and achievable goal, it makes your efforts more focused. It also helps to show you’ve thought the plan through.
Do your research
If you don’t research, you’ll struggle to get your business off the ground. Look for demand for your service and see what the competition is doing.
Keep it succinct
Any business plan you write should be short and understandable. Don’t complicate what you’re trying to do.
Be consistent with the tone
Your tone of voice should be clear and easy to identify throughout. Don’t make jokes or try to be clever.
Use a structure
Using a structure like the one we’ve created helps to avoid silly mistakes and sets you up for success.
The Mistakes You’ll Make With a Business Plan
The ugly truth about writing a business plan is that you’ll make mistakes. Luckily, if you keep these thoughts in mind, you can avoid screwing it up too badly:
- Watch out for bad ideas – not every business idea is a winner, and your plan should show you if it’s time to return to the drawing board.
- Always have an exit strategy – you need to show investors they can leave with their money if it doesn’t work out. Don’t trap anyone in the business with you if the ship starts sinking.
- Pick your team carefully – you need one that can handle your business. Ensure you have an IT expert for websites and a marketing expert for advertising.
- No financial projections – a business plan with no economic predictions will fail. Do the numbers – you’ll be glad you did.
- Avoid spelling and grammar errors – spelling and grammar mistakes don’t help you look like a professional and irritate investors. Get your plan professionally written and checked.
Create a Business Plan Today
You need a business plan. It’s a vital tool for identifying what you need to do to succeed and how your business will grow. Maple Canada is here to help you write.
If you need to work with a professional company to write a business plan, then do that – we’re here to help you with the process. Maple Canada is committed to delivering the best.