May 13, 2022
How To Write A Perfect Business Plan
Business plans are crucial for any startup to have, but it can be hard to figure out how to write one. That's why we've put together our best guide.
Business plans are crucial for any startup to have, but it can be hard to figure out how to write one. That's why we've put together our best guide.
Business plans are a crucial document for any startup or business owner to have, but it can be hard to figure out to how to write one to impress investors and potential connections and users. That's why we've put together our best guide to help your business have its best possible start.
A business plan is one of the foundational documents of any company. It describes your goals, operations, industry profile, objectives and financial projections. It is, essentially, a blueprint to the inner workings of your company and its future.
Preparing a business plan for your product can have many benefits. Here are a few of them.
Several studies have shown that writing a business plan and having a clear way forward can help your company grow faster than those who don't plan as well. Because they've gone through this process, these companies are also less likely to fail and often perform better in their industry too.
Anyone who's going to give or loan you money will want a clear picture of what you're going to do with that money. They're also going to want assurance that their investments or loans will be worth it, and business plans are great for both those things.
There's a lot of risk involved in starting a business. Starting a company or launching a product from scratch is inherently a bit of a gamble, no matter how good your idea is. But planning for potential obstacles or financial roadblocks can help you be prepared to deal with whatever comes your way, giving you a better chance of success.
Businesses cost money, and the up-front costs alone from launching your product can be expensive. You don't need to take any other unnecessary financial risks, and that's where business plans come in. They can be a great way to explore potential outcomes and financial routes for your product, and the risk involved in each.
The process of writing out your business plan is a great way to go over ideas and decide on your next steps. What's feasible? How much time and resources will it take? All of these questions are things that will come up in your plan and give your product a better chance of success.
Research is a necessary step in building a business plan. But it's important for many other aspects of your product journey, too. Researching your customer base and industry is also a great way to figure out how to market your product and what exactly your users are looking for so you can grow your product.
Business plans aren't just good for convincing shareholders to invest in your company; they're also good for communicating your product vision to potential employees and business partners, too, including other companies you'd like to connect with.
Creating a business plan can be a long process, but it doesn't have to be a complicated one. Just follow these 9 steps.
First and foremost, you'll need a quick, one-page summary of your business and what you plan on accomplishing—AKA an executive summary or product brief. This includes a brief description of your product, important objectives and goals and a broad idea of your financial plans. Essentially, it's the elevator pitch you'll use to help reel in users and investors alike.
It's important to keep your executive summary high-level and concise; bogging readers down with too much information can bore them and make them lose interest. If they want more information, they can find it in the other sections of your business plan. Your executive summary is simply there to give readers a quick overview and hook them in.
We can't tell you exactly how to write your executive summary, but here are some questions it should answer:
If you're still unsure how to summarize your product, you can always skip this step and come back to it after you've written the rest of your business plan. This might give you a better idea of what to include and what to leave out.
This one's a little self-explanatory, but your business plan will need to introduce and explain your company to readers. This includes surface-level details like its registered name, key milestones, number of employees and physical locations, but it might be good to give a brief history and go over key people in your team and their skill sets as well. Many company descriptions also discuss your business structure (e.g. a proprietorship, partnership, or corporation) and the percent ownership each owner or shareholder has.
Last but not least, your company description should also include a mission statement. Why was your company founded? Why do you do what you do? This statement needs to be both inspirational and emotional to better connect with people, and make them believe in your vision.
The next part of your business plan will focus on your company's over-arching objectives—that is, what you want to accomplish in both the short term and the long term.
One of the best ways to make sure you're creating strong and clear business goals is making sure they follow the acronym SMART and are:
Clearly laying out your goals in this section is also a great way to attract investors, as you're also showing them that you have planned things out and have an actionable way forward.
If you're specifically looking for a loan or investment for your product, this section can be a great place to explain why you need the funds and how they will help your business grow. You'll need to show exactly how that money will benefit your product (as well as the investor themselves), and the impact it will have.
Now that you've discussed your company, it's time to go over your product or service. How does it work? Who is it aimed at? What are your key features? What makes it stand out?
Likewise, you'll also have to go into more technical details here. When are you planning to launch and how? How do you plan on pricing your product? What's your sales strategy? Your production and distribution strategy? These are all questions investors will want to be answered and you'll need to think through.
Research is one of the most essential parts of your business plan. Your product doesn't exist in a vacuum, and you can't treat it as such. In order to build a successful product and grow in your industry, you'll have to know the space well.
In your business plan, you'll need to lay out exactly what you learned from looking into the industry and your competitors. What sets your product apart? What gaps need to be filled in the industry? What are the pros and cons of the biggest products in your space? What's the demand like? A competitor analysis will help you get a better sense of what you need to stand out in your industry.
Likewise, it's also a good idea to do a detailed market analysis. This includes everything from how saturated your target market is as well as key information about the customers you want to target, such as age, location, income bracket and much more. Knowing these details is important, as having too broad a market can be seen as a red flag by investors.
So we've gone over your company and product as well as the industry it resides in. Now, it's time to go over how exactly you're going to go about attracting customers.
This section is a great place to outline your marketing strategy. How are you going to reach customers? How are you going to advertise your product and where? Your distribution and marketing channels will need to be clearly outlined here, as well as any advertising campaigns you plan to undertake.
While talking about your initial launch plan is important, it's also a good idea to talk about your longer-term growth tactics and retention strategies in your marketing plan. While you need to attract customers in the first place, you also need to show you have a way to keep them.
The previous section of your business plan can also come in handy here. How do your competitors market their products? What channels do they receive the most success from? Though you want your product to be unique, it's always a good idea to see how established products have marketed themselves.
If your product is completely new, you might not have much financial information to go off of. But if you have an existing business or other products, including their financials in your business plan can help show investors and potential employees that you know what you're doing. This includes income or profit-and-loss statements, balance sheets that detail assets and debts, and cash flow statements.
Some other key numbers to include in your financial analysis are your net profit margin, current ratio and accounts receivable turnover ratio.
While talking about your financial past is important, you'll also need to show that you've worked through the numbers for the future, too. Investors will want to know when they can expect a return and that you have a viable plan for profits.
Often, this data will be on financial reporting from the last three years of your business, including quarterly sales, expenses and profit calculations and cash flow statements.
It's important to make sure your projections are realistic. While you still want your numbers to look good, it's much better to underestimate your projections and exceed expectations than to overestimate them and fall short.
Last but not least, it's a good idea to have an overflow section to organize any tables, definitions or other notes you can't fit elsewhere. Having this section can also make the other sections more readable and keep them shorter, leaving the more technical details to those who want to find them.
When you're first starting out with your product or business, you likely won't have too large of a customer base to get information from. But as your business grows and you find yourself needing to update your business plan, customer feedback management platforms like UserVitals can be incredibly helpful.
UserVitals helps you gather information from users all over the Internet, from custom feedback portals to social media to many other platforms, and keeps it all together in one place for you to read, analyze and learn from. This data can help you figure out what your top-selling points are, why customers chose your product over others, and what gives you an advantage in your industry—all good things to know if you want to convince others to join your journey.
Learn more about UserVitals today.
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