The cornerstone of your business existence is the business plan, which can serve as either a roadmap to success or a path to failure. While writing a business plan isn’t a technical requirement, including one in your startup launch can prove incredibly useful.
Outlining your company’s goals, strategies, and financial projections, a well-written business plan can be the key to attracting investors, securing funding, and managing the business effectively.
(Learn more about including a startup lawyer on your team in this post)
How to Write a Business Plan: Can’t-Miss Tips
However, writing a typical business plan can be intimidating, especially for first-time entrepreneurs. To get you on your way, here are some tips for how to write a successful business plan.
The steps we’ll outline include the following:
- Define your business
- Conduct market research
- Set specific, measurable business goals
- Include a financial plan
- Review and revise your business plan
Step #1: Define Your Business
Here’s when you clearly outline the purpose and mission of your company. These statements serve as the foundation of your business plan. They must clearly outline the purpose and mission of your company. It should include a description of your products or services, target market, and unique value proposition.
Mission statement
It should also include a statement of your business’s mission. This component of writing a business plan outlines the reason for your company’s existence and the values it upholds.
It also has a statement of your business’s vision, which summarizes your long-term goals and aspirations for the company. By defining your business in this way, you can provide a clear direction for your company and ensure all decisions align with your mission and vision.
You should make all your business decisions through the lens of your mission and vision.
A company’s mission statement intends to communicate the purpose of the business to people both inside and outside the organization—including potential investors you hope to attract. It must establish who your company is and what it does. What does your company do to set it apart from all other similar businesses and give it a competitive advantage?
Think of your mission statement as your company’s fifteen-second elevator pitch. Try to capture its essence in 50 words or less.
Vision statement
Not to be confused with a mission statement or a company description, the vision statement is the company’s statement of HOW the mission will be accomplished and fulfilled.
Think of your vision statement as your company’s North Star:
- How is your business going to achieve its goals?
- How is it going to complete the mission statement?
- What is the principal motivating force of the founders?
Try to articulate the “Why” of the company
Also, are the founders’ missions and visions aligned? A split among the founders could create uncertainty for those seeking to join you in your business venture. Everyone must be on the same page.
Step #2: Conduct Market Research
Understand your target audience and competitors to set your business for success. Market research helps you identify customer needs and preferences and assess the competitive landscape.
This information helps you position your business for success and be confident your products or services align with your target market’s needs and preferences. It can also help you understand how your business fits in with the larger market and how you can differentiate yourself from competitors.
Step #3: Set Specific, Measurable Goals
Identifying short-term and long-term objectives and outlining a plan is vital for guiding decision-making and measuring progress in your business.
To create goals that help you track your progress and stay on track as your company grows and prospers, focus on including these goals when writing a business plan:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
A company’s objectives should be the driving force behind business plans.
For example:
- Are you interested in going public?
- Are your interests more aligned with merging with another company or selling when the company’s value reaches a certain level?
- What is the marketing strategy your company plans to employ?
You should hash out these decisions so they’re articulated in your solid business plan and aligned with your vision and mission. Doing so helps you focus on your long-term objectives and ensure all decisions align with your values and aspirations.
Step #4: Include a Financial Plan
The financial plan is integral to your business plan because it helps you understand your business’s financial health and sustainability. By projecting your revenue and expenses and creating a budget, you identify potential financial risks and opportunities and make informed decisions about allocating your resources.
Including a financial plan in your business plan also helps secure funding and investment. It clearly shows your financial needs and how you plan to use the funds.
How to write a business plan with financial projections
A financial plan should project your revenue and expenses and outline a budget for your business. Additionally, you should incorporate details about all funding sources (including loans or assets) and clarify how you will utilize them.
These inclusions help you make informed financial decisions and ensure your business is financially viable. By aligning your financial plan with your business mission and vision, you can ensure your financial choices support your business’s long-term success and sustainability.
Step #5: Review and Revise
Be bold and make changes to your business plan as your business grows and evolves. Your business plan should be a living document as your business grows and changes. So be bold and review and revise your plan regularly to know it remains relevant and accurate. This step helps you stay on track and adapt to changes in the market.
By modifying your plan, you’ll know your project accurately reflects the state of your company’s operations and that you remain true to your mission and vision. In addition, you might spot areas for improvement. Then, you can make the required adjustments to stay on track and accomplish your long-term goals by frequently reviewing and amending your business strategy.
Involving necessary parties like your management team, staff, and investors in the review and revision process is also crucial.
By doing so, you can ensure you consider all points of view and that the strategy remains pertinent and aligned with the requirements and goals of all parties involved.
Other Factors of Writing a Business Plan
Along with the essential steps we’ve covered for how to write a business plan, we have even more can’t-miss considerations when writing a business plan.
1. Who is the business’s founder and manager?
The heart of your company is your people. With that in mind, it’s critical to highlight their qualities and contributions.
Consider it like this: People might be interested in the concept of your company, but they’ll place their trust in the team members who will carry it out.
As a result, emphasize each team member’s unique abilities and experiences and any outside resources, such as suppliers, attorneys, and accountants, who are essential to your company’s success. They can assist in differentiating your company from the competition as members of your broader team.
2. What business opportunity are you seeking to exploit?
For others to understand what you are getting into, you must fully explain the company and its operations.
Include product/service details, target market, growth potential, and problem-solving plans in your business plan. Further, consider business economics as well.
By thoroughly comprehending the nature of the business, prospective partners and potential investors can make an informed decision on whether to help the company.
Here’s a helpful post to read next: What is a Founders Agreement and Why Do You Need One?
3. What is the context of the business?
When writing a business plan, you must consider the broader picture and how your business fits. Once it is prepared, this should be a snapshot of the founders’ intentions. It should reflect the company’s present and future opportunities and risks.
To do this, consider external elements that could affect your business.
These external elements include:
- The legal environment
- Interest rates
- Demographic changes
How you will adjust to changes out of your control must also be considered. Finally, consider how all these factors come together and whether the result is a flourishing company or one that will just get by.
By evaluating the business against this backdrop, you can create a precise strategy for navigating your industry and succeeding. Then, as you grow and evolve, this plan should serve as a road map for attaining your goals and keeping your purpose.
4. Risk and reward
Consider all the risks and opportunities the company may face in this business plan section.
Assess potential risks and opportunities and plan how your team can handle them. Create a financial forecast for various economic scenarios, including challenging, stable, and favorable environments. Crunch the numbers to provide a solid profit outlook for each scenario.
By examining these potential risks and opportunities, the company can make sensible decisions about its operations and better plan for the future.
A solid, well-thought-out business plan can be the turnkey to the organization, investment, and management. These tips for the perfect business plan will help drive your success. Pay attention to this process. The effort alone will teach you a lot about your business.
Don’t miss this post next: 6 Business Risks & Mitigation Strategies Every Business Needs to Plan For
What Role Do Lawyers Play When Writing a Business Plan?
It’s also important to consult legal experts when writing a business plan. Business law can be complex, and ensuring you’ve covered all the bases regarding regulations and compliance laws is critical. Attorneys can also assist with setting up any contracts or other documents needed for your business.
Schedule a free consultation with the team at Contiguglia Law in Denver for expert guidance when writing a business plan. We can help every step of the way to ensure compliance and maximize your success.
