What is the best way to write a business plan in 2021?
The entrepreneur is admitted to the investment process after submitting a business plan. Many investor groups will not even give you an interview unless you have a plan in place. And if the plan is to attract investment funds, it must be exceptional.
A business plan is more than just a piece of paper. It’s a manual that will assist you in defining and achieving your objectives. It’s also a management tool that lets you analyze data, make strategic decisions and demonstrate how your company will run and grow.
Why we write a business plan?
You should have a plan in order to get yourself organized and to ensure you have some type of viable commercial potential. You have focus and hopefully aren’t going to run out of money or starve before you get going. If that’s all you need, and you don’t plan to raise money, apply for loans, and don’t intend on bringing in partners, then you certainly don’t need a 25lb manuscript. Keep it simple. In fact, Brian Chesky (founder of Airbnb) is famous for his one-page business plan for global domination.
If you are planning to go to a local bank for a business loan, or are approaching your sphere of influence for backing who you know is accustomed to seeing legit business plans, then you know you probably need to create something that they understand in a format they are comfortable with.
If your purpose is to raise funding, and your startup isn’t going to go anywhere without it, then make sure anything you take time out to create is going to relate to today’s fundraising environment.
Key elements of business plan
Whether you’re writing a business plan to raise funds or expand your company, or simply to see if your idea will work, every business plan should include six key sections.
It is an overview of your business. It comes first in your business plan and it contains almost 1 to 2 pages.
The opportunity segment addresses the following questions: What exactly are you selling, and how are you addressing an issue (or “need”) in your market? What is your target market and who are your competitors?
In this section of your business plan, you’ll discuss the question of how you’ll turn your opportunity into a business. This section will go over your marketing and sales strategy, as well as your performance milestones and metrics.
Without a financial forecast, your business strategy is incomplete. We’ll go into what to include in your financial plan, but you can start with a revenue estimate, cash flow statement, income statement (also known as profit and loss), and balance sheet.
Use the appendix if you need more room for product images or additional details.
Tips to write a great business plan
1. Know the audience
Use language that your audience will understand when writing your plan.
Handle your investors by keeping your product explanations simple and straightforward, using terms that everyone can understand. If necessary, you can always provide the full specifications in the appendix of your plan.
2. Keep it Short and accurate
Business proposals should be brief and to-the-point. Reasons are given below:
First and foremost, you want your business plan read. A 100-page or even a 40-page business plan would be ignored. Sure, you’ll need supporting documentation for some pages, but you can place it in your Appendix.
Secondly, your business plan should serve as a tool for running and growing your company.
3. Determine your objectives and goals
You should have a clear idea of what you want to get out of your company from the start. Before you started, you might not have thought of every goal or even concrete steps to achieve your objectives. But that’s the beauty of going through the business plan step by step. It will assist you in identifying performance measures, fleshing out your priorities, and further improving elements of your business to achieve clear goals.
4. Test out your business idea.
Going through your business plan, beginning with a one-page pitch, will help you test the feasibility of your business concept long before you launch it. The best thing you can do when you work on everything from your branding and mission statement to your opportunity and execution is to get feedback and test various aspects of your company.
The next steps in writing your business plan
Business planning is a continual process that will assist you in validating your premise, setting priorities, managing, and pitching your business successfully. Viewing some completed business plans as you go through the planning process can be very beneficial if you’re not sure where to start.
Download our free business plan template to get an outline of the content we covered in this article and get started writing your own. I recommend that you look through our sample business plan library if you need specific industry examples.
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