Business Plan Writing- What it Is and 13 Reasons You Should Have a Business Plan
Business plan writing is crucial to ensure long-term success and create a detailed written plan of where your company is headed. According to the USA Bureau of Labor Statistics, 20% of small-medium entrepreneurs fail after the first year. The percentage of failure is approximately doubled and quadrupled after 2 and 5 years, respectively. In the end, only 25% of business owners end up crossing the 15-year mark.
According to a study conducted by Francis J. Greene & Hopp, entrepreneurs who have a business plan are more likely to succeed than others with an identical business. In particular, 30% of small businesses fail due to the absence of a business plan. So, it goes without saying that business plan writing is critical for a small business’s success in the long term. Now that you know creating a business plan is a helpful step, let’s answer the question, “What is a business plan?”
What Is a Business Plan?
A business plan is a formal document that entails details of the business, such as the short and long-term goals, the resources the company will use to achieve these goals and the estimated time frame for each of them. The purpose of the business plan is to recognize, explain, and evaluate the business opportunities, outline the growth strategy, examine long-term financial needs, and attract investors.
With an efficient business plan, you will have a formally written vision and mission for the company. While a handful of businesses might survive without this document, it’s a helpful tool that helps entrepreneurs focus on the goals of the company. You can refer to this piece of paper anytime you want, and it helps in setting the overall workload.
How to Write a Business Plan
Creating a business plan is a time-consuming process. This job is best left in the hands of professional writers. However, you must understand how to write a business plan to know what to expect when hiring someone for business plan writing. The following are the 11 sections included in a full-length plan:
I. Executive Summary
Think of your executive summary as a call to action; it is the shortest yet the most critical component of a business plan. The summary should highlight all the essential goals, strategies, and results mentioned in the overall plan. This section is vital as it will be a critical deciding factor for the reader on whether or not they are excited by your “pitch” and want to continue reading. So, the executive summary should be able to grab your potential investors’ and customers’ attention.
II. Legal Description of the Company
This section is pretty straightforward, and it defines the legal status of your company.
III. Services and Products
In the services and products section, you will list down the products or services that you offer or plan to offer to your clients and customers.
IV. Marketing Plan
A marketing plan stands right next to the executive summary in terms of its importance. A good marketing plan includes three elements; competitive analysis, specific marketing actions, and market analysis. In other words, it consists of an examination of what your competitors are doing, what you’ll do differently, and how you will drive the demand for your products and services.
V. Operations Plan
The operations plan will cover all the logistics of the company. How do you plan to operate all the functions of the company laid out in the business plan? You can include details regarding the buying, storage, shipping, hiring process, and other critical information regarding the business’s operations.
VI. Management and Organization
This section will highlight the organizational structure that you will follow. How are your teams aligned, and who will lead which team? These are some of the questions you can answer through the organization and management section of the business plan.
VII. Bios of Key Management
The bios section will convince the readers that you’re a perfect fit for this business idea. Explain how the owner and the key members involved in the business have sufficient experience, technical know-how, and expertise to drive successful results. It will also be a good idea to add your plans to hire other experts to make up for the gaps in your current team.
VIII. Personnel Plan
This section will also discuss the hiring process. However, it will give an in-depth explanation of who you will hire and how you plan to retain employees to manage and run the organization.
IX. Intellectual Property and Other Key Assets
This section will entail details of all the assets your company owns, including ideas legally owned by the organization. Include all the assets and the patent or patent-pending ideas here.
X. Financial Plan
While other sections of the business plan highlight the effectiveness of the business, the financial plan highlights its viability. In this section, you will need to crunch a lot of numbers, explain the reasoning behind these numbers, and briefly describe them. This is the section most business owners dread, but luckily, you can hire our business plan writing services to avoid getting overwhelmed by the financial statements.
The appendix can include all the budgets, tables, charts, and figures that you can reference throughout the business plan.
Why Do You Need a Business Plan?
We’ve already given a brief description of the business plan and provided a business plan template for your understanding. Now, it’s time to discuss why you should have an efficient business plan in place. It is pertinent to mention here that it is good to write a business plan 6 to 12 months after you decide to start a business. The following are the reasons you should hire professionals for business plan writing:
1. Establishing Milestones
The business plan will help you determine which milestones should be your key focus and how and approximately when you will achieve them. Milestones are long-term missions and goals that will help your company and its operations stay on the path to success. For example, if you plan to reach $1 million in revenue in 5 years or want to introduce a new line of products or services after 5 years of success, a business plan will help you reach such goals in a time-efficient manner.
2. Competitor Analysis
Many small-medium entrepreneurs jump into their businesses without first evaluating their competitors. Analyzing the competition will be your key to success. What is your competition doing that’s working, what is not working for them, how are customers reacting to their strategies? Competitor analysis is a classic example of learning from others’ mistakes [and successes].
3. Understanding Customers
Understanding customer behavior and customer buying patterns and attitudes will help you plan your strategies accordingly. What is the key demographic, how much buying power do they have, and why do they buy or don’t buy certain products or services? These questions will give you an in-depth understanding of your target audience.
4. Determining Success Ratio
An efficient and effective business plan will help you determine the key success factors as it involves researching the competition, target audience, and the opportunities and barriers you will face. You will be better prepared to meet the challenges and present well-prepared solutions promptly.
5. Creating a Revenue Model
Creating an expected revenue stream will help you plan strategies and actions accordingly, but more importantly, it will make a great impression on your investors. You will know how your business will make money and what you will have to do to ensure a steady inflow of revenues and face economic challenges.
6. Attracting Customers and Investors
With a professionally written business plan, you will know which key points you can use to target your customers and investors. Your investors and clients will know precisely why investing in or buying your products and services, respectively, will benefit them.
7. Market Research and Evaluation
Understanding the overall growth, challenges, trends, and size of the industry is critical to ensure business growth. If you don’t have a business plan, you will need to rely on gut feeling to make essential decisions, and while that may work sometimes, it will lead your business to fail in the long run.
8. Brand Positioning
Your customers and investors will know what to expect from your brand through a business plan from the get-go. The tone and contents of your plan will set the perception and image of the brand in their minds. Implementing brand positioning strategies from the early stages will help you stand out amongst competitors and help customers and investors identify your brand. A good business plan presents all the brand positioning strategies, including segmentation, comparative analysis, and differentiation.
9. Setting a Growth Strategy
With all the components of the business plan, especially the financial plan, marketing plan, executive summary, and critical management bios, you will be able to make better use of your resources. The efficient utilization of company resources will ensure an excellent growth strategy in the long run.
10. Minimize Risk and Financial Challenges
Just like you will understand the opportunities of the industry and the market, you will also know the challenges and barriers presented. You will be aware of challenges such as staffing needs, cash flow changes, and general trends or economic downfalls. A business plan will help you develop solutions before you even face these circumstances, thus eliminating hurdles.
11. Repositioning the Business
Repositioning your business to overcome drawbacks of the industry or economic conditions can be extremely hard if you have to start from scratch. However, if you already have a business plan, this process will be relatively more straightforward. You can pinpoint the parts of the business plan that need to change according to the current situations and devise new strategies accordingly.
12. Discovering Opportunities
Creating a business plan will help you understand your business from a variety of different aspects. You may also develop better strategies and marketing plans after writing this formal document. A reader might also suggest ways to improve your plan and create better opportunities for a higher success rate. So, it’s always better to have a formally written plan instead of having to explain it in your own words and risking not getting your ideas across appropriately.
13. Make SMART Decisions
With specific, measurable, attainable, achievable, relevant, and time-based [SMART] goals, you will be able to prioritize important aspects of the business and strategies. Additionally, it will also help buyers understand the business model, growth potential, and target market if you plan to sell your company in the future. The business model will help you achieve a higher valuation of your company.
Do You Need a Professionally Written Business Plan?
Now that you know what a business plan is, what it includes, and why it is crucial for your business’s success, the final decision is up to you. Needless to say, having a business plan will help you create, implement, and evaluate all your strategies for future success.
If you’re on the lookout for efficient and reliable business plan writing services, we can help you. Content Development Pros has years of experience serving hundreds of satisfied customers. Whether you’re a new or an existing business owner, we can write any business plan you need. Contact us now for further information and queries.