A 7 Step Guide to Developing a Business Plan

How to Develop a Business Plan

A business plan is a comprehensive document that sets forth a company's goals and the strategies they plan to use to achieve them. It is crucial that business owners create a plan before opening their doors and running machines. Having a business plan will ensure executives are focused on growth and survival in the long run. It will also help highlight a company's financial and labor needs. Additionally, a well-defined business plan will attract investors and lenders.

Essentially, business plans are roadmaps to success and profits. When creating this outline, business owners should take their time and be careful. Generally, the business plan structure is dependent on the type of venture the entrepreneur is targeting. However, there are key components that most plans will include.

• Executive Summary - This is oftentimes referred to as the company's elevator pitch. This page can highlight the firm's purpose, financial standing, and competitive edge. Executive summaries can also include a table of contents and background information.

• Business Description and Structure - This part of the business plan outlines what services or products the company is selling. It can go into detail about raw materials, manufacturing processes, inventory practices, fulfillment methods, and their value. Entrepreneurs can also explain administrative structures, property, and legality in this section too.

• Market Research and Strategy - Any statistics, data analysis, testimonials, or market research should be written out here. It is also important to include strategies for departments, as well as projects, forecasts, and deadlines.

• Workforce Structure - The business plan should have a section that describes all executives and managerial employees, and how their skills and experience can help enhance goal attainment.

• Financial Information - This section will have projections of profit and loss statements, cash flow, and balance sheets. Data insights should be based on predictions for the following years, not current outputs.

Business leaders can include more information in their plans to make them more extensive. Not only will a thoroughly illustrated business plan clarify operations to stakeholders, but it will also guide owners to goal achievement. To ensure companies are equipped with effective business plans, entrepreneurs can follow these steps.

1. Identify Objectives

An important puzzle piece to a business plan is creating operational goals. Identifying key objectives will ensure the entire business plan and strategies align with the targets the company wants to meet. Some common goals include increased revenue, purchase orders, and customer retention.

Important -:
The Small Business Association recommends that a business plan entails an executive summary, budget or funding information, and marketing strategies.

2. Set a Budget

Creating a budget will allow managers to make sure their bottom line is always protected. This step involves assessing gross revenue, subtracting fixed costs, and preserving a set amount for unanticipated emergencies. Any capital leftover can then be used for business development and growth projects.

3. Determine Target Consumers and Their Needs

Next, company leaders need to research and identify who their ideal customer base is and what their preferences are. Defining buyer personas through data will also highlight important attributes of consumers. Doing so will guide marketing and development efforts, ensuring they effectively capture customers' attention.

4. Select Purchasing and Marketing Channels

Purchasing channels refer to mediums in which customers can purchase goods and services. This can be through a website, a brick-and-mortar store, or a mobile app. On the other hand, marketing channels are platforms where companies can raise brand awareness and engage with shoppers. Similar to purchasing, these channels can be a website, social media ad, or mobile apps. Selecting these channels for the business plan will enable intricate strategies.

5. Establish Key Performance Indicators (KPIs)

Key performance indicators are measurable values that business teams can use to monitor performance. These metrics include Return on Investment (ROI), profit generation, sales, and customer retention rates. The business plan should define KPIs that the company is tracking and why it matters.

6. Create a Sales Process

A sales process is a series of repeatable steps that representatives employ to convert prospects into closed sales. This may differ for sales teams across different companies due to the items they sell or their target audience. The core steps that most processes will have include the following.

• Prospecting - The practice of looking for potential customers online or in-store.

• Approaching - A sales representative engages and connects with the prospect via phone or in-person.

• Researching - The sales representative then gathers information about the prospect and their needs and helps highlight their pain points.

• Presenting - At this stage, the sales representative will present the company's service or products as a solution to the customer's pain points. This can entail performing product demonstrations and giving pitches.

• Closing - The final step of the sales process is when the sales representative finalizes the deal and drafts a contract.
  

Important -: Statistics show that planning a business can help a company grow 30% faster.

7. Execute the Business Plan and Review

At this stage, the business plan is ready to go into action. Executives should share this document with key stakeholders and employees to ensure everyone is on the same page. After a specified time period, they should review the plan and make any necessary changes to reflect new markets or fluctuations.

Key Takeaways to Developing a Business Plan

• Business plans are documents that outline a company's goal, strategy, and mission.
  
• Having a business plan will guide executives and ensure they are focused on their objectives.
  
• Key components to a business plan include an executive summary, business description, and market research.
  
• Steps to creating a successful business plan include identifying goals, establishing KPIs, and making a sales process.