If you’re a business owner, founder of a start-up, or CEO of a company, a business plan is crucial to ensuring the success of your enterprise. A business plan can help you run your business operations smoothly, keeping a vision for the future in mind. Even when it comes to external affairs like bringing on a new partner on board or seeking out financial aid, a business plan doubles up as a solid pitch. Although a business plan is vital to the greater effort, many entrepreneurs do not know how to effectively write one. To help you gain a better understanding, here is how to write a business plan step by step.
How to write a business plan step by step?
● Step 1: Executive summary
This is the introduction to your plan and must hook readers instantly. To drive home the point of why readers should believe in your business, sell and explain your ideas. Supplement them with a summary of your plan and operating model. You can dedicate around 1-2 pages to this section. Key elements of this section usually include:
- Business name
- Essential employees
- Address
- Background
- Goods and services offered
● Step 2: Business description
Use this section to provide details about your business to the fullest. Inform readers about the opportunity that your business will be capitalising on, the market targeted, what makes your business stand out from competitors, and so on.
● Step 3: Market and competitive analysis
Good businesses conduct comprehensive analyses of the market. Your readers will also want to see evidence that you have done the same. You can use this section to describe the market and industry your business operates in and showcase the opportunities your business will build on. If your market research has revealed any unique trends, you can show these results here too.
You can also display the competitive landscape by highlighting the competition’s strengths and weaknesses. You can then mention blind spots in the industry that your company will address. Talk about how you have factored in competitor reactions and how you plan on building a customer base.
● Step 4: Structure of operations
With this section, you get into the tangible details of your enterprise. Talk about how your business will operate on a daily basis with a detailed plan. Also, mention your company’s legal structure and whether or not it is a sole proprietorship. If there are various stakeholders, provide an organisational chart to highlight what everyone brings to the table.
● Step 5: Product description
This section allows you to discuss what you will be selling or offering and, therefore, will be a bit longer. Use this section to describe your product and mention its differentiation factor. Bring up the price point and how it fares when compared to competitors. Make sure to also lay down marketing and promotion plans, and the target market and awareness-building ideas.
● Step 6: Capital raising
If you aim to attract an investor or lender, you should include a section pertaining to your funding request. Clearly mention how much capital you are looking to raise and why, especially if you’re looking at a Working Capital, or Business Loan. You cannot expect to ask for funding for a large amount without a plan for how the money would be used. Also, remember to mention the projected Return on Investment (ROI).
● Step 7: Financial analysis and projections
You should use this section to show how your business has performed in the past and how it will grow in the future. You can use charts and graphs for easier understanding. If your business has been in operation for a few years, highlight financial stability. However, if your business is relatively new and not yet profitable, provide realistic projections.
Look up industry norms and also comparable businesses’ performances. To supplement your claims, include income statements, balance sheets, cash flow statements, etc., for several years. Also, while showing your financial outlook, offer a five-year projection with clear logic.
● Step 8: Appendix
To provide additional information about licenses, patents, charts, etc., that would otherwise clutter the plan, you can use an appendix. However, make sure that the information placed here relates to your plan.
Now that you know how to write a business model, get started, and make your entrepreneurial dreams come true.
To learn more about the various products and services at HDFC Bank that can benefit your enterprise, you can check out the MyBusiness page here.
Read more about business structure’s here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.