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Six Steps for Making a Business Plan

Congratulations to you who are now reading this article. This means you already have a dream, an idea, and a goal to establish a successful business. Having a good business plan is one of the most important factor in helping you make your business ideas work.

A business plan is a document that details out your business and ways to make it successful. Writing down a good business plan will never be a waste of time. In fact, you will gain many benefits by writing a business plan.

Developing a business plan can be tiring, but in this article you may find some tips on how to write it down in a simpler way. You are then expected to continue writing and developing it according to your specific needs.

What are the advantages of having a business plan?

  • It will help you work systematically in making detailed your business idea when you are in your concept planning stage. A business plan will be an advantage for those who are just starting up as well as those who would like to expand the business they have now.
  • It serves as a tool to sharpen your business goals and how to achieve them. Besides that, a business plan will also serve as a basic indicator to evaluate your business progress.
  • You can anticipate challenges and minimalize risks of failure that you may face when running your business in the future.
  • You can save time and make investments more efficiently to achieve success.
  • It serves as a resume when you seek external financial assistance. Banks and investors need reliable evidence-based data to help them make sound decisions. A written business plan is needed not only for the interest of your investor, but also for your own purpose to minimalize any risks of investment failures.
  • As a management tool for your company. Running a business involves team work. You and your team can easily lose focus and put more attention on minor matters that do not contribute to reaching the goals you have set forth.
    • A sound business plan can remind you and your team to stay focused to you goals and what you need to do to reach that goal.
    • A good business plan will give a basic well-directed structure for you to run your daily operations with your team. Not only will it give you better direction, it will also operate harmoniously to achieve your targets and to face the dynamic situation of your business environment and market.

Six stages in writing your business plan

Writing your business plan document means more than just sitting down and writing. There are several stages you have to go through, namely:

1. Preparatory Stage

This is the stage where you begin to evaluate yourself and your business ideas. In this stage you should start to think about all possibilities that will make your business successful or not. To run a business means you need several expertise, such as managerial skills, market knowledge, specific technical competencies according to your business, financial skills, and a long-term vision on how to make your business grow and achieve success.

This preparatory stage is when you start to improve your business knowledge. Some questions you need to ask yourself regarding your business are:

  • Can I achieve my goals?
  • Is there a demand for the product or services I offer to society?
  • Which companies or persons are already working in this field? Does the market allow you to let your business grow?
  • What products or services are you offering?
  • What expertise is needed to make your ideas work?
  • What is unique about your business that you will give to the market?
  • How big is your financial capacity to start this business?
  • How will you protect your own ideas?

Some more questions related to your own self-analysis:

  • Why do you want to run this business?
  • What are your business goals and how are they related to your own personal goals?
  • What is your expertise? How do you relate your expertise with your business
  • How much is the amount of income you expect to gain from this business?
  • What are the advantages and disadvantages of running your own business?

2. Writing Stage

After completing the first stage, you will have the basics of your business idea and are ready to express them through writing in the form of a business plan.

When you write your business plan, do put attention on the following matters:

  • Make your writing concise so that the reader can easily understand what model you are offering. It is important to show since the beginning how your business will be beneficial and can gain profit. Use simple language.
  • Write down specific matters.  Your document detailing your business plans should be able to demonstrate clearly and in details how you want to run the business to achieve the goals you want to reach.
  • Show your basic understanding of the market: who is your target market, how will you communicate with them, what other companies are selling similar products or services, and who are your potential business partners.
  • It is important that you demonstrate your understanding of financial management. Demonstrate clearly how you will earn money and gain profit. The profits you gain will allow you to maintain the quality of your products or services and it will enable your enterprise to stay healthy business-wise and be beneficial to people.
  • Do not forget to show a professionally-designed business plan, especially if you are expecting to receive external funding. Make a design that reflects the characteristics of your business. Make it look appealing, easy to read, with clear targets and goals.
  • The business plan format may vary according to needs. The most common for a business plan should have the following:
    1. Cover page
    2. Executive Summary
    3. Company/Organizational Profile
    4. Market research
    5. Products of services
    6. Marketing and Sales
    7. Financial projection
    8. Appendix

3. Research Stage

In this stage you need to do spend time to do further research on what you have planned and written. A business plan is a continuous activity which needs to be adjusted to changes and business growth, while also considering the market situation of the field you are involved in. Continuous research will help you minimalize mistakes and it can serve as a compass for you to respond to this dynamic business world.

4. Dissemination stage

Your business plan document is a blueprint on how your business will operate to which direction will it move in the future. You should therefore treat your business plan as your own intellectual property. To maintain a fair business competition, we need to understand the importance of being selective when showing our business plan. It is sometimes worthwhile not to show your business plan to your competitors. Related to this stage, here are a few things that you need to take into account:

  • What are the benefits of distributing your business plan to other parties?
  • Make a written statement (in the document as well as in your email correspondence) that this document may not be distributed to another party without your consent.
  • The circulated document should never contain detailed information about your business, unless you are already have a mutually agreed partnership contract.
  • If your business is an innovative one, you may go a step further by registering your business so you officially own the intellectual property rights.

5. Technical Assistance Stage

Having a business idea and developing a business plan is the first step to make your business run. However besides having a strong intention to do it, you also need sufficient knowledge about the industry market. You need other expertise to make the business run well, including skills to develop the business plan.

Reference materials on how to write a business plan is now readily available by surfing through the internet. After browsing through several web pages, it is also advised that you attend seminars or workshops, or request consulting services from qualified business mentors and advisers.

You may request assistance for consulting firms that has expertise in developing business plans. They may provide a consulting team who will listen to you, ask questions, and turn your ideas into a business plan document. If this is the way you want to take, then it is your role to review the plan so that you clearly understand and are convinced that the plan is in accordance to your goals. Then you should be ready to make your plans happen with confidence.

6. Writing a Business Plan by using a Template

There are several business plan templates available which you can access through the internet. Here are some tips for you in searching for the most appropriate template suitable for you:

  • Do some research and select the template which suits your situation.
  • Determine whom you are writing this document for.
  • You do not have to follow the order of writing as written in the template. You can start writing wherever you want to start and whichever you think is relevant to your business.
  • Ask for other people’s opinion. You may also wish to ask another person to edit your writing if you feel you are not yet satisfied with the business plan document.
  • Make sure that you have clearly written all your estimates or actual figures.
  • Make a summary after you have written everything.
  • Make a cover page with a professional look.
  • Do editing several times.

I hope this article will be useful for you and give you encouragement to make your dream happen.

References

  1. https://www.sba.gov/ (Small Business Administration)
  2. https://business.gov.au/planning/business-plans/how-to-develop-your-business-plan
  3. https://www.princes-trust.org.uk/help-for-young-people/tools-resources/business-tools/business-plans
  4. Business Model Generation, written by Alexander Osterwalder & Yves Pigneur (A good book for reviewing your business model and its strategy)

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