Learn about 9 Ultimate Guide to writing a business plan in 2022 and all you need to know about a business plan. Read along with me.

Before you start a company, a good business plan can help you clarify your strategy, identify potential bottlenecks, determine what resources you will need, and assess the sustainability of your idea or expansion ambitions. 

Although not every successful firm starts with a formal business plan, many entrepreneurs find it beneficial to take a step back and examine their idea and the market they want to become a member of, as well as to comprehend the scope and strategy of their ways. This is also when a business plan comes in handy.

Read on and also employ how to write a business proposal for investment as a startup.

9 Ultimate Guide To Writing A Business Plan

9 Ultimate Guide to writing a business plan 

Let us explore the 9 ultimate guide to writing a business plan. A blank page is one of the scariest things you can face. The ideal initial step you can take is to start your business plan with a structured overview and key aspects of what you will cover in each area. 

We have put together a high-level overview you can copy into your blank document to get you started because an outline is such a vital step in ‌producing a business plan (and avoid the terror of facing a blank page). 

It’s time to fill in your business plan outline now that you’ve created it. We’ve divided it down into sections to make it easier for you to put your plan together step by step.

The 9 ultimate steps to creating a business plan

  1. write a concise executive summary
  2. Describe your business
  3. Conduct market research
  4. Create a management and organization plan
  5. Make a list of your goods and services
  6. Create customer segments
  7. Create a marketing strategy
  8. Lay out a logistics and operations strategy 
  9. Create a financial strategy

1. Write a concise executive summary 

The executive summary, which you should write last, is one of the most crucial components of your strategy.

The executive summary’s goal is to condense everything that follows and provide a high-level overview of your firm to time-crunched reviewers (such as possible investors and lenders). 

Because this is a summary, emphasize the most important points you discovered when drafting your plan. You can omit the summary if you’re writing for your own planning needs, but ‌give it a try just for practice.

An executive summary should not exceed one page‌. The space constraint can make cramming all the important details in a small space stressful—but it’s not impossible. 

The executive summary of your business plan should include‌: 

  1. One is the business concept; What is the nature of your business? 
  2. Business objectives and vision; What is the goal of your company? 
  3. Description and uniqueness of the product: what do you sell and how does it differ from others?
  4. Targeted audience; To whom do you sell? 
  5. How do you aim to communicate with your customers according to your marketing strategy?
  6. The financial situation at the moment: How much money do you now make? 
  7. The projected financial situation of the company: What kind of revenue do you think you will be able to generate? 
  8. The request: How much do you want to ask for? 
  9. The committee: Who is involved in the company?

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2. Describe your business 

Describing your business is one of the 9 ultimate guide to writing a business plan. This section of your business plan should address two key questions: who you are and what you want to do. Answering these questions will summarize why you’re in the company, what makes you unique, what you have going for you, and why you’re a smart investment pick. 

Even if you’re the only one who will see this information, it’s still a good idea to clarify them. It’s a chance to write ‌about some of the more intangible aspects of your company, such as your values, ideals, and cultural beliefs. 

Some ‌elements you should include in your company overview are‌: 

  1. Is your company a sole proprietorship, a general partnership, a limited partnership, or an incorporated entity? 
  2. Your company’s business model 
  3. Your line of work 
  4. The vision, goal, and value proposition of your company 
  5. Information about your company’s history or background 
  6. Short-term and long-term business aims 
  7. Your team, as well as key personnel and their compensation scales

Some of these aspects are self-evident, but others, particularly with your company’s vision, goal, and values, will cause a little more consideration. 

This is where you ‌get to the heart of why your company exists, what you aspire to achieve, and what you believe in.

Read- How to Get a Loan for Small Businesses in Nigeria.

3. Conduct market research. 

Conducting market research is one of the 9 ultimate guide to writing a business plan. It’s no exaggeration to suggest that your market may make or ruin your business, no matter what type of business you establish. 

Choose the correct market for your products, one that has many clients who understand and require what you’re selling and you will be well on your way to success. You may battle for each sale if you chose the wrong market or the correct market at the wrong time.

Therefore, whether or not you intend for anybody else to see your business plan, market research and analysis are essential sections. It should include an assessment of how big you think the market for your products is, as well as an analysis of your company’s position in the market and a competitive landscape review. 

It’s critical to conduct extensive research to back up your conclusions, both to persuade investors and to validate your own beliefs as you go through your strategy.

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What is the size of your prospective market? 

The potential market is an estimate of the number of individuals who would benefit from your product. 

While it’s great to envisage sky-high sales figures, you will want to evaluate your estimated potential market with as much relevant independent data as possible. 

Because this can be a difficult task, here are some broad pointers to get you started: 

  1. Recognize the characteristics of your ideal consumer. 
  2. Examine the industry’s current and future tendencies. 
  3. Create educated guesses

Government statistics departments, business associations, academic studies, and renowned news publications covering your industry are all good places to look for market data.

Read- How to Get a Loan for Small Businesses in Nigeria.

4. Create a management and organization plan. 

Readers should learn who runs your company in the management and organization portion of your business plan. 

Describe your company’s legal structure. Decide if you’ll form an S corporation, a limited partnership, or a sole proprietorship for your company. 

Use an organizational chart to depict your company’s internal structure, including roles, duties, and interactions between employees, if you have a management team. Make it clear how each worker will contribute to the startup’s success.

Read- Grants For Small Businesses in Nigeria.

5. Make a list of your goods and services. 

Although your products or services will be featured in most sections of your business plan, it’s critical to have a part that provides vital facts for interested readers. 

If you sell a lot of things, you can give more general information about each of your product lines; if you just sell a few, you can give more specific information about each. 

A boutique, for example, sells a wide range of different ‌shoes, as well as household items and other accessories. The shoes would be listed in the company’s business strategy, along with details about each.

Describe any new items you plan to release soon, as well as any intellectual property you own. Explain how they intend to boost profitability.

It’s also vital to consider where things sourced from handmade crafts, for example, are sourced differently than popular products for a dropshipping firm.

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6. Create customer segments. 

The core of any marketing plan, if not your entire business plan, is your ideal consumer, often known as your target market. 

You will want to keep this individual in mind when you make strategic decisions, which is why knowing who they are and including them in your plan is critical. 

Describe several general and particular demographic traits to give a holistic overview of your potential customer. 

The following items are frequently included in customer segmentation: 

  1. Their age range and where they live 
  2. Their educational attainment 
  3. Some typical tendencies of behaviour 
  4. What they do with their spare time 
  5. What technology do they use and where do they work 
  6. How much money do they make 
  7. Where they’re most typically used 
  8. Their views, values, or viewpoints.

This information will vary depending on what you’re offering, but you should be precise enough that it’s clear who you’re attempting to reach and, more crucially, why you made the decisions you did based on who your consumers are and what they value.

7. Create a marketing strategy. 

Creating a market strategy is one of the 9 ultimate guide to writing a business plan. Your target buyer directly influenced your marketing efforts. Your marketing strategy should describe your present decisions and your plans, with an emphasis on how your ideas are a good fit for that target customer. 

Most marketing plans include information on four major topics. The amount of information you include on each will be determined by your business and the target audience for your strategy. 

  1. Price: What are the prices of your products, and why did you make that decision? 
  2. Product: What are you selling, and how do you set yourself apart from the competition? 
  3. Promotion: How are you going to get your products in front of your target market? 
  4. Place: Where are you going to sell your wares?

Although promotion may make up most of your strategy because it’s easier to get into tactical details, the other three categories should be discussed at least briefly because they’re all key strategic levers in your marketing mix. 

8. Lay out a logistics and operations strategy. 

The workflows you’ll use to bring your ideas to life are known as logistics and operations. Even if you’re not seeking investment and are developing a business plan for your personal planning needs, this is a crucial area to consider. 

Include everything in your operations strategy, including:

  1. Suppliers: Where do you receive your raw materials for manufacture, or where do your products get made? 
  2. Production: Will your products be made, manufactured, wholesaled, or drop-shipped? How long does it take to manufacture your goods and have them delivered to you? How will you deal with a busy season or a sudden surge in demand? 
  3. Facilities: Where will you and any other members of your teamwork? Do you intend to open a physical store? If so, where are you going? 
  4. Equipment: What tools and technology do you need to get started? Everything from computers to lightbulbs and everything in between falls under this category. 
  5. Shipping and fulfillment are two different things. Will you handle all fulfillment tasks in-house or outsource them to a third-party fulfillment company?
  6. Inventory: How much will your stockpile be, and where will it be kept? How will you send it to partners? And how will you handle inventory management? 
  7. This part should show the reader that you have a thorough understanding of your supply chain and sound contingency plans in place to deal with any unexpected events. 

If you’re the reader, it should provide you with enough information to make other critical decisions, such as how to price your products to meet your expected expenditures and when you plan to break even on your original investment. 

9. Create a financial strategy.

A business’s financial health determines whether it lives or dies, regardless of how wonderful your idea is or how much effort, time, and money you put into it. At the end of the day, individuals want to work for a company that they believe will be around for a long time. 

Your financial plan’s level of detail may vary depending on your audience and objectives, but you will usually want to include three primary financial views: 

  1. An income statement
  2. A balance sheet, and
  3. A cash-flow statement. It may also be necessary to include financial information and projections.

Income statement 

Your income statement is intended to show readers how your revenue sources and expenses have changed‌. They can see the all-important bottom line, or profit or loss, your business experienced during that time using those two pieces of information. 

If you haven’t yet started your company, you can forecast future milestones based on the same data. 

A financial statement 

Your balance sheet shows the amount of equity you have in your company. You list all of your business assets (what you possess) on one side and all of your obligations on the other (what you owe). 

This gives you a quick look at your company’s shareholder equity, which is computed as: 

Equity = Assets – Liabilities

Statement of Cash Flow 

Your cash flow statement is like your income statement, with the exception that it considers when revenues are received and when expenses are paid. 

Your cash flow is positive when the amount of money coming in exceeds the amount going out. If the contrary is true, your cash flow will be negative. 

Ideally, your cash flow statement will show you when cash is low, when you may have a surplus, and when you may need to have a contingency plan in place to gain finance to keep your firm afloat.

What is a Business Plan 

A business plan is a document that proves an excellent starting point for people looking for a structured way to lay out their thoughts and ideas. A Business plan serves as a document where they can share those ideas with people who can have a big impact on your success. 

6 Purposes of a Business Plan? 

Investors use business plans to assess a company’s viability before funding it, which is why business plans are frequently related to getting a loan. Even if you don’t need funding, there are several compelling reasons to write a business plan. The 6 purposes of a business plan include:

  1. Planning for the future
  2. Evaluating concepts
  3. Research
  4. Recruiting
  5. Partnerships and 
  6. Competitions.

1. Planning for the future 

Writing out your strategy is a great way to clarify your thoughts and determine the scale of your business, as well as the ‌time, money, and resources you’ll need to get started.

2. Evaluating concepts 

If you have several ideas, creating a preliminary business plan for each one will help you focus your time and energy on the ones that have the best chance of succeeding. 

3. Research 

You will need to investigate your target consumer and competition to build a business plan information that will help you make more smart decisions. 

4. Recruiting 

Your business plan is one of the simplest methods to express your vision to potential new hires, and it can help them gain trust in the company, especially if you’re still in the early phases of development.

5. Partnerships 

If you intend to approach other businesses for collaboration, having a clear understanding of your vision, target audience, and business strategy will make it much easier for them to determine whether your company is a good fit for theirs—especially if they are further along in their growth trajectory than you are. 

6. Competitions 

Many business plan competitions offer prizes, such as mentorships, grants, or capital investment. Try Googling “business plan competition + [your location]” and “business plan competition + [your industry]” to find relevant competitions in your industry and area.

Business Plan Template

3 Formats for business plans 

Business plans might be one page long or several pages long, with elaborate graphs and reports. When it comes to drafting a business plan, there is no one-size-fits-all solution. 

The goal is to provide readers with the most important information about your company. 

The following are some of the most common types of business plans we see:

1. Traditional

The following are the most common types of business plans. We’ll go over the basic elements of a business plan and go over each section in detail below.

Traditional business plans can be dozens of pages long and take a long time to write. This plan is requested by venture capital firms and lenders. 

2. Lean

A lean business plan is a condensed version of a standard business plan. It follows the same format as the previous one but just includes the most important information.

Businesses use this strategy to onboard new employees or changes existing strategies for a specific target market.

3. Nonprofit

A nonprofit business plan is required for every organization that works for the public or social benefit. It includes everything you’d find in a standard business plan, plus a section outlining the company’s intended impact. 

For example, a speaker and headphone company dedicated to assisting those with hearing impairments. Donors frequently requested this plan.

Small Business Planning Advice 

  1. Understand who your target market is. 
  2. Make time for research and have a specific aim in mind. 
  3. Maintain brevity and focus. 
  4. Maintain a constant tone, voice, and style. 
  5. Make use of a software program to help you write your company strategy.

Conclusion

With developing a business plan, there are a few common blunders to avoid. 

  1. Awful business strategy 
  2. There is no plan B. 
  3. Unstable teams 
  4. Financial estimates that aren’t accurate. 
  5. Errors in spelling and grammar

Key Takeaways

  • A business plan is an excellent starting point if you’re looking for a structured way to lay out your thoughts and ideas and share those ideas with people who can have a big impact on your success.

The 9 ultimate steps to creating a business plan

  • write a concise executive summary
  • Describe your business
  • Conduct market research
  • Create a management and organization plan
  • Make a list of your goods and services
  • Create customer segments
  • Create a marketing strategy
  • Lay out a logistics and operations strategy 
  • Create a financial strategy
Author

Hi, I am Chidimma, the Chief Editor of StartupSpot. I hold a bachelor's degree in Business Education (with a major in Accounting) from the Nnamdi Azikiwe University Awka, Anambra State, Nigeria and online certifications in Digital Marketing by SEMRUSH Academy. Startupspot was therefore born (in 2021) out of my passion to reach startups, small businesses and a greater audience to educate them about startups, the challenges facing startups and how to manage their finances. I also wish to educate people (especially women) to attain financial independence. I hope you find the contents useful, and should you need further help, I hope you ‌reach me.