Knowing how to write a business plan is an essential skill for any entrepreneur. A concise, focused business plan will help focus your mind as well as structure your ideas, giving you a better grasp of your main values and how you plan to grow.
Investors and collaborators will want to know all they can about you, your business and what it has to offer, and so your plan will need to stand up to scrutiny. A business plan is also essential if you hope to do business overseas, as it’s a way of evaluating your product’s potential in a foreign marketplace.
Writing a business plan isn’t a complicated or complex process, but it does take time and determination. Remember that the more thoroughly you think it through, the better your chances of success will be.
To start off, you should describe your background and why you are the person to deliver this business.
- What education, qualifications and previous work experience do you have?
- Why do you want to manage your business?
- What industry knowledge and experience do you have?
- What other personal information or connections do you have that may be relevant to this business? This might include family history in the industry, existing relationships with suppliers and clients or established mentor relationships.
About your company
Here, you should briefly summarise what the business is: how it will work, what product or service will be sold and your vision of the future of the company.
- What are you going to do and how are you going to do it?
- Explain your mission, or the main goal of the business.
- What is the business vision – where will the business be for one, three and five years, including financial projections? Try to make your goals SMART – specific, measurable, achievable, realistic and time-limited.
- What distinguishes this business from your competition?
- How will you staff the business?
- How will the business be financed?
About your products or services
Next, you should outline the specifics of your offering. If you plan to offer more products and services in the future, then you should also outline these.
- Describe how you will make your product or deliver your service. Include the equipment, tools, intellectual property, or other assets necessary to manufacture or deliver it.
- How much does it cost to deliver your product or service?
- How many units will be sold to customers, and what is your pricing strategy?
- Explain your marketing strategy and channels. For example, you might have a store to sell goods, visit customers or take online orders.
- Are there any legal requirements to start this business?
- What is the growth potential for this product or service? Is it becoming more popular?
About the retail space
Describe your customers, their requirements and how you will reach them.
- Who is your typical customer, and where are they based? Are they individuals, businesses, or both? Describe the profile and your understanding of the expected customers.
- How many of these customers will offer your product to their own customers? Determine the size of your market and the potential market share you could reach.
- Have you already made any sales? If you have, describe these sales and be prepared to show proof of them. If customers have already expressed interest, include this too.
- Why will customers choose you instead of your competitors?
Strengths, weaknesses, opportunities and threats
In business jargon, this is called a SWOT analysis. It’s crucial to think about the pros and cons of your business idea and the environment you will be working in.
- What are the strengths of your business, and what gives your business an advantage over competitors?
- What are the weaknesses of your business, putting you at a disadvantage compared to a competitor?
- Describe the main opportunities available to your business – that is, which people, items, assets or connections can you use to your advantage?
- Explain the main threats to your business – what elements of your environment or competition can cause problems for your business?
Lastly, you need to understand who and what your competitors are, the area in which they are located, and how their offering compares to your own. Especially important are competitors who are geographically close, as they are aiming for the same people as you.
There are two types of competitors:
- Direct competitors, or those who sell the same or similar products or services. For example, if your business is a hair salon, your direct competitor is another hair salon.
- Indirect competitors, or those who sell adjacent products or services. Indirect competitors to a hair salon would be other places selling beauty services in a relaxing space, such as a brow bar, nail salon or spa.