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Last Updated on: December 28, 2023 by Joseph Muriithi

After the initial exuberance of making that genius business idea pop into your brain, the next step is turning your idea to a business plan. Business plans provide guidance for your business, allowing you to apply for loans and approach investors. It’s difficult to get a company off the ground, but learning how to write a business plan isn’t. We explain what a business plan is, why you need one, and how to write one in this article.

What is the concept of a business plan?

A business plan is a document that includes an outline of the business concept as well as a strategy for launching and operating it. It’s a structured, written document that responds to key questions about your company or Business.

A typical business plan includes:

  • Business plan objectives- Executive summary
  • Description of the company
  • Services and products
  • Opportunities for jobs
  • Marketing strategy
  • Analyze the competition
  • Required funding
  • Operational procedures
  • Start-up requirements
  • Financial projections

What Is the Purpose of a Business Plan?

A business plan benefits both internal and external stakeholders, and it’s important for growing your startup in a variety of ways. In simple terms, it is turning your idea to a business plan. A business plan should assist with the following:

  • Investors: (This is usually one of the main purposes of a business plan) If you want to attract investors to your company, you’ll need to demonstrate its viability. A well-crafted business plan demonstrates that you’ve done your homework on the industry, your competitors, and how to be successful.
  • Loans: Before approving a small business loan, most banks will review your business plan. Your business plan demonstrates to the loan officer that you’re serious about starting a new business and that you’ve thought about the obstacles and risks involved.
  • A landlord can also request a copy of your business plan before confirming a rental agreement. Commercial leases are usually three to five years long, and landlords prefer tenants that are confident in their ability to stay in business for that long.
  • Guidance: A business plan will serve as a road map, guiding you and your team toward your objectives.
  • If you’re looking for a co-founder, you’ve come to the right place. A successful business strategy will help you attract potential partners in the same way as it can help you attract investors.

Writing a business plan entails getting your thoughts and analysis down on paper. Two steps to writing your own business plan have been explained below to help in turning your idea to a Business Plan

STEP 1: Create a business concept

You’ll need a winning business idea to write a business plan. Start paying attention to common problems you and those around you face. As an ambitious entrepreneur you will end up with an issue or idea that motivates you to start your own company or business based on the problems, need or gap you have identified.

STEP 2: Turning your idea to a Business Plan

With your prepared business concept and idea, you proceed to turning your idea to a Business Plan. Start doing research to flesh out your business strategy until you have a business concept that matches your idea. With the researched concepts, sort your findings into the following groups:

Summary of the Report/ Executive summary

This segment, like the first paragraph of an essay, serves as a short overview of what’s to come. The executive summary can be used to easily explain:

  1. What is the purpose of your company?
  2. What goods or services do you offer?
  3. What is the backstory of your business?
  4. What are the expansion plans?

Despite the fact that the executive summary occurs at the start of a business plan, it is better to write it last because, it acts as a summary of the entire business plan. One that you could use to pitch your idea without the reader requiring to read through the entire document.

Overview of the Company

Consider the business summary to be a one-minute elevator pitch. This is another chance to quickly respond to main questions that will be discussed further later, such as:

  1. What would the company do?
  2. What issues can it address?
  3. What kind of customer do you want to attract?
  4. What sets you apart from the competition?

Services and Products

This segment acts as an outright description of what you will be selling/ or offering to customers to generate revenues. Use this segment to elaborate on your business model by responding to questions like:

  1. What will the business offer for sale?
  2. How can the customers/ clients benefit from these goods or services?
  3. What’s your pricing strategy? Be as descriptive as possible.
  4. How do your prices compare to those of your competitors?

Market Potential

Those who read the business plan should understand why your company would succeed. Perform the requisite market research to determine the viability of your brand. In this section, you should consider descriptively showing the readers that market potential using the following tips;

  1. What is your target market’s size?
  2. What kind of customer do you want to attract?
  3. What is your sales potential?
  4. Who is your main rival?
  5. What would you do to distinguish yourself?

Marketing Strategy

This is where you’ll have to clarify how you’ll get in touch with your clients. Remember to include digital marketing resources such as a website, a social media presence, and an email marketing strategy in your plan. It is crucial to explain about any other marketing channels that you may choose to utilize and why they are best suited for your business/ company. In this section, respond to questions such as:

  1. How are you going to market your goods or services?
  2. Will you sell to customers or businesses directly?
  3. Will you sell your goods individually or in bulk?
  4. What types of retail outlets would you target if you hire a third-party reseller?
  5. What kind of marketing strategies would you employ?

Operational Strategy

In this part, you’ll figure out how your company’s logistics work. Provide as much information as possible about how you plan to run your business, the day-to-day operations of the business and other technical details that are relevant. In this section respond to questions such as:

  • What methods will be used to make products?
  • What will the positions of the offices and retail stores be?
  • What kind of personnel do you require?
  • How do you want to develop the company over time?

Budgeting

The financial portion of your business plan will pique the attention of investors and loan officers. Make sure you do your homework and prepare ahead of time. Let the readers know that you understand the business, it is feasible and that it has a future financially. In this section, respond to questions such as:

  1. What are your current investments?
  2. How much more money do you require?
  3. What are the latest balances in your accounts?
  4. What are the revenue projections?
  5. What are the actual start-up requirements?

At this point, you will have effectively developed a business plan that thoroughly addresses the most critical questions about your proposed business. The only thing left to do is polish it. Alternatively, you can use our business planning services to hep turn your idea to a plan that will capture the attention of investors and suit the needs of your business.

 


 

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