BUSINESS PLAN PROCESS
1. Do Your Research
Conduct detailed research into the industry, target market, existing customer
base, competitors, and costs of the business begins the process. You may ask
yourself the following questions:
What are your business goals?
What is the current state of your business?
What are the current industry trends?
What is your competition doing?
There are a variety of resources needed, ranging from databases and articles to
direct interviews with other entrepreneurs, potential customers, or industry
experts. The information gathered during this process should be documented
and organized carefully, including the source as there is a need to cite sources
within your business plan.
You may also want to complete a SWOT Analysis for your own business to
identify your strengths, weaknesses, opportunities, and potential risks as this
will help you develop your strategies to highlight your competitive advantage.
2. Strategize
Now, you will use the research to determine the best strategy for your business.
You may choose to develop new strategies or refine existing strategies that have
demonstrated success in the industry. Pulling the best practices of the industry
provides a foundation, but then you should expand on the different activities
that focus on your competitive advantage.
This step of the planning process may include formulating a vision for the
company’s future, which can be done by conducting intensive customer
interviews and understanding their motivations for purchasing goods and
services of interest. Dig deeper into decisions on an appropriate marketing plan,
operational processes to execute your plan, and human resources required for
the first five years of the company’s life.
3. Calculate Your Financial Forecast
All of the activities you choose for your strategy come at some cost and,
hopefully, lead to some revenues. Sketch out the financial situation by looking
at whether you can expect revenues to cover all costs and leave room for profit
in the long run.
Begin to insert your financial assumptions and startup costs into a financial
model which can produce a first-year cash flow statement for you, giving you
the best sense of the cash you will need on hand to fund your early operations.
A full set of financial statements provides the details about the company’s
operations and performance, including its expenses and profits by accounting
period (quarterly or year-to-date). Financial statements also provide a snapshot
of the company’s current financial position, including its assets and liabilities.
This is one of the most valued aspects of any business plan as it provides a
straightforward summary of what a company does with its money, or how it
grows from initial investment to become profitable.
4. Draft Your Plan
With financials more or less settled and a strategy decided, it is time to draft
through the narrative of each component of your business plan. With the
background work you have completed, the drafting itself should be a relatively
painless process.
If you have trouble writing convincing prose, this is a time to seek the help of
an experienced business plan writer who can put together the plan from this
point.
5. Revise & Proofread
Revisit the entire plan to look for any ideas or wording that may be confusing,
redundant, or irrelevant to the points you are making within the plan. You may
want to work with other management team members in your business who are
familiar with the company’s operations or marketing plan in order to fine-tune
the plan.
Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting
the help of others to act as additional sets of eyes. You may begin to experience
burnout from working on the plan for so long and have a need to set it aside for
a bit to look at it again with fresh eyes.
6. Nail the Business Plan Presentation
The presentation of the business plan should succinctly highlight the key points
outlined above and include additional material that would be helpful to potential
investors such as financial information, resumes of key employees, or samples
of marketing materials. It can also be beneficial to provide a report on past sales
or financial performance and what the business has done to bring it back into
positive territory.
https://www.growthink.com/businessplan/help-center/business-planning-
process-5-steps-creating-new-plan
1. Executive Summary
So, this is technically the last step of the business plan. However, you’ll put it at
the front so that the reader can gain some extra context before jumping in. This
section summarizes the following sections, and should typically be about 2
pages maximum.
2. A Description of the Company
Here’s where you get into the details of what your company does. What are the
vision and mission statements? What problem is your business going to solve?
You should keep this part lean and without fluff, approximately 3 pages.
3. Products & Offerings
This section is the descriptor of what your company has to offer. In the previous
section, you detailed what your product will solve, but now you have to show
how you’ll do that, and how you’ll make money with your products. This
section length will depend on how many products you have but shouldn’t take
up more than 15% of the report.
4. Competitive Market Analysis
This section will be one of the longer ones, about 4-5 pages. You’ll really need
to emphasize why your company will survive amidst its competition. Detail
your competitors and analyze them closely and realistically in this section. Find
what your competitive advantage is in the process.
5. Business Strategy Report
Now that you’ve found your competitive edge, detail it in this section. Another
long one, this one shouldn’t exceed 6 pages. However, this is one of the most
important sections, second only to the financial plan. Investors want to see that
you know where you’re going in the long run and how you’ll get there.
6. Team Overview
Here, you will describe the management team and provide an overview of your
employees. The organization structure should also be present in this section, as
it lets potential investors predict your success more easily. This section will also
depend on your company’s size, but again, shouldn’t take up more than 15% of
the total length.
7. Financial Plan & Targets
Here is the section that investors need to see in order to make their final
decision—the financials. Without this section, there would be no investment
potential. Make realistic capital requirements, analyze overhead costs, and make
humble but firm projections. Don’t give any half-truths or misinformation here;
it will come back to haunt you. Make sure you know your stuff and that this
section receives special attention. In all, this section should be one of the longer
ones.
Advantages of Business Plan
https://timberry.bplans.com/10-benefits-of-business-planning-for-all-businesses/
Here are those top ten benefits.
1. See the whole business. Business planning done right connects the dots
in your business so you get a better picture of the whole. Strategy is
supposed to relate to tactics with strategic alignment. Does that show up
in your plan? Do your sales connect to your sales and marketing
expenses? Are your products right for your target market? Are you
covering costs including long-term fixed costs, product development, and
working capital needs as well? Take a step back and look at the larger
picture.
2. Strategic Focus. Startups and small business need to focus on their
special identities, their target markets, and their products or services
tailored to match.
3. Set priorities. You can’t do everything. Business planning helps you
keep track of the right things, and the most important things. Allocate
your time, effort, and resources strategically.
4. Manage change. With good planning process you regularly review
assumptions, track progress, and catch new developments so you can
adjust. Plan vs. actual analysis is a dashboard, and adjusting the plan is
steering.
5. Develop accountability. Good planning process sets expectations and
tracks results. It’s a tool for regular review of what’s expected and what
happened. Good work shows up. Disappointments show up too. A well-
run monthly plan review with plan vs. actual included becomes an
impromptu review of tasks and accomplishments.
6. Manage cash. Good business planning connects the dots in cash flow.
Sometimes just watching profits is enough. But when sales on account,
physical products, purchasing assets, or repaying debts are involved, cash
flow takes planning and management. Profitable businesses suffer when
slow-paying clients or too much inventory constipate cash flow. A plan
helps you see the problem and adjust to it.
7. Strategic alignment. Does your day-to-day work fit with your main
business tactics? Do those tactics match your strategy? If so, you have
strategic alignment. If not, the business planning will bring up the hidden
mismatches. For example, if you run a gourmet restaurant that has a
drive-through window, you’re out of alignment.
8. Milestones. Good business planning sets milestones you can work
towards. These are key goals you want to achieve, like reaching a defined
sales level, hiring that sales manager, or opening the new location. We’re
human. We work better when we have visible goals we can work
towards.
9. Metrics. Put your performance indicators and numbers to track into a
business plan where you can see them monthly in the plan review
meeting. Figure out the numbers that matter. Sales and expenses usually
do, but there are also calls, trips, seminars, web traffic, conversion rates,
returns, and so forth. Use your business planning to define and track the
key metrics.
10.Realistic regular reminders to keep on track. We all want to do
everything for our customers, but sometimes we need to push back to
maintain quality and strategic focus. It’s hard, during the heat of the
everyday routine, to remember the priorities and focus. The business
planning process becomes a regular reminder.
Difference between business model and business plan
https://www.startupyo.com/difference-between-business-plan-
and-business-model/
