How To Write A Business Plan: 9 Steps To Turn Your Idea Into A Profitable Reality
Summary:
Every company starts with a strong vision that needs to materialize into an organized business plan. From short-term and long-term goals to budgets, your plan must cover all the aspects you need to get started. Keep reading to discover what a business plan needs to include.
What Is A Business Plan?
Many people confuse business plans with strategic marketing plans, although they are two separate things. A business plan focuses on a company's overall goals and objectives and the strategies it will enforce to achieve them. It is basically a roadmap for your company's success, indicating its growth and development potential. To write a business plan, you need to start by finding a template that provides all the necessary information to create your company's blueprint. Companies organize their ideas, evaluate how achievable they are, identify potential challenges and hurdles, and set alternate plans in case things go wrong. But that's not all a well-crafted business plan does. It also attracts investors and proves to them why your company is meant to take off. SaaS startups and industry newcomers must establish a deep understanding of the market, their strategy to generate revenue, and their risk management approach to secure funding.
On the other hand, already established companies should create a business plan to evaluate their past methods, set new milestones, and ensure they are on track to grow. Here is our step-by-step guide to creating an efficient plan.
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The 4 Types Of Business Plans
1. Lean Startup Plan
Starting a business is difficult, and it usually involves one entrepreneur with a big idea and zero funding. A business plan template for startups is shorter and includes only the most important information, such as the startup's target market, products/services, SaaS growth strategies, and its financial needs. The goal is to convince investors to fund the project. Established companies can also create lean business plans when they onboard new hires or when they must modify their plans to enter a new market or approach a different target audience.
2. Traditional Plan
Whatever your industry, you must write a traditional strategic business plan when you start a new business. These are typically longer than startup plans and take more time to complete. They can be dozens of pages long, including details regarding your target audience, your competitors, your marketing tactics, and your metrics to measure success. Traditional strategic business plans are usually enforced by companies to offer direction to their management and stakeholders and typically cover a period of three to five years.
3. Nonprofit Plan
Usually, nonprofit business plans follow the traditional format but feature an extra section describing the impact the company wants to make and its future plans. It's necessary for investors and donors to read this document so they are convinced to give you their money and believe in your mission. Also, you need this blueprint so everyone in your team knows how you run operations and you can manage stakeholder expectations.
4. Growth Plan
After you've mastered your current industry and target audience, you're probably looking to expand your operations and accelerate business growth. A growth business plan is needed to highlight new market opportunities, updated ideal buyers, and revenue predictions. In addition, you must include your employees' responsibilities and a comprehensive marketing plan with various lead generation techniques and tactics. Businesses should evaluate their plans at the end of every quarter to measure their performance and make improvements.
How Can You Write A Simple Business Plan Proposal?
Do investors, lenders, and partners really need to read your entire business plan before deciding to work with you? Not really. This is where a business proposal comes into play. It is an outline of your detailed plan that looks like a sales pitch aiming to convince others that your company is a future gold mine. Basically, a typical business proposal example highlights what your company does and what it can offer to investors and collaborators of all sorts. Of course, it will differ depending on your company's size and client needs. The usual components of a business plan proposal are an introduction to your company, the struggles your customers face, your tactics and solutions, your team's skills, your timeline, and the projected expenses and sales plan.
Now, let's talk a little bit about design. What should your small business plan proposal look like? The first step is to double-check your document for spelling mistakes. Also, your writing should be clear, without long sentences and complicated wording. Segment your sentences to make them easily readable. Everything should be focused on the way you can help your target buyers and how you compare to your competition. That's why you should know their needs and pain points. Once you write your business plan proposal, you should create a business plan PDF that investors can download easily. Don't forget to add engaging visuals like photos and explainer videos.
A Typical Example Of A Simple Business Plan Proposal
So, how do you write and put together a business plan proposal? It's quite simple once you've filled out your detailed business plan template. The first page is the cover of your proposal, including your company's name and the names of those who worked to create it. Next, you can add a table of contents so people can easily navigate the document. The next two pages are a synopsis of the main points your comprehensive organizational plan contains. Specifically, it includes the executive summary, approach and methodology, statement of problem, qualifications, benchmarks, cost, and benefits of your solution. Under qualifications, it's your opportunity to gloat about why you are not just a good solution but the best option for your customers. Mention your proud achievements and accomplishments in the field and how successful your B2B lead generation strategies have been so far.
9 Steps To Create A Typical Business Plan
1. Executive Summary
Think of your executive summary as a one- or two-sentence sales pitch where you must grab people's attention. It's where you summarize your entire business plan in a few sentences. Gather the basic information, including your company's name, its products or services, and its target market. Why do you believe your team is going to successfully implement your plans and reach your goals? How are you going to generate new leads, and what financial goals have you set? While all this information may sound like much, you must find a way to be concise and straightforward in your descriptions.
2. Company Description
Are you offering HR software, LMS systems, or project management software? Whatever your expertise, you should indicate it under the company description when you write a business plan. You can start with the basics, such as company name, address, and key employees. Also, detail the structure of your business, whether it is an LLC, a sole proprietorship, or a corporation, and how much stake each owner/investor has. Additionally, explain in detail who your ideal B2B SaaS customer is and what competitive advantages you have compared to your biggest challengers. Don't forget to mention the company's achievements so far and the expertise of your thought leaders and founders.
How about your vision statement? You can either include it under the company description or make a separate section. It's where you explain the idea that birthed your startup business. How will the world be impacted once you achieve your goals? Remember that a vision statement isn't the same as a mission statement. You want it to be concise and clear. Investors don't wish to hear too much fluff but focus on practical solutions.
3. Market Analysis
When you start up a business, an in-depth market analysis is pivotal not just for you and your team but also for your investors. First, you should identify your buyer personas and underline their needs, challenges, demographics, job roles, and online behaviors. Next, you must analyze your industry and locate your top competitors. Once you have a clear understanding of your target market and its complexities, you can craft compelling B2B SaaS marketing strategies to appeal to your buyers.
The next step is to conduct a SWOT analysis to pinpoint your strengths, weaknesses, opportunities, and threats. You should ask yourself questions and answer as honestly as possible. For example, "How do I start my own business and stand out from the competition?" and "What are the best things to sell online with a unique approach?" These questions help you understand the full spectrum of your industry and competency to beat other players in the field.
4. Products And Services
There is no business plan template without a section about products and services. It's where you detail the items or software you sell, their pricing points and tiers, and their unique features. If you are in an industry where quantity plays a massive role, you can include more general information regarding the categories of products you sell. Additionally, you need to explain how your services fit in the market or how they revolutionize the industry by offering something entirely new. Therefore, mention any trademarks, patents, or intellectual property you own. If you have any visuals that will help with the presentation, feel free to include them and make your content interactive.
5. Marketing Plans
Another element of a business plan is highlighting your sales and startup marketing tactics that will help you achieve your goals. How are you going to attract your target buyers, establish thought leadership, and push clients to the conversion stage? You need to find a marketing plan template and add your techniques and tactics. For example, you may want to focus heavily on content marketing by creating articles, webinars, eBooks, and podcasts. Or you may choose to incorporate paid ads, including PPC directory listing ads, to capture the interest of niche audiences.
Other marketing options you have are email marketing featured placements and link building. You can collaborate with established content marketing agencies so they can feature your ad or products in their emails. Such an approach ensures targeted promotions and visibility by high-intent, niche clients. Link building, on the other hand, belongs to your overall SEO efforts to boost your brand organically and is not easy to do on your own as it requires expertise. That's why you may collaborate with a digital marketer and leverage their link building prowess.
6. Customer Segmentation
User personas should be your focal point when you write a business plan template, as these people and companies will generate revenue for you and keep you up and running. Every decision you make should be based on their needs and challenges and provide actionable tips and solutions. To conduct customer segmentation, you need to know a few key elements, including ages, locations, education levels, online behavior patterns, job titles, extracurricular interests, earnings, and general opinions. The more specific your segmentation is while planning a business, the more targeted your marketing efforts will be. As a result, you will know where your target buyers are, which channels they use, and what types of content they consume.
7. Organization And Management
When you start a business or have already created your corporate structure, you must have clear organizational functions. Everyone should have specific roles and responsibilities. You should detail each team member's role in your company and mention the managers and leaders of your business, as investors should know who is running the show and who is responsible for what. To make the picture clear, create an organizational chart where you also explain how each department and professional will contribute to the end goal.
8. Action Plan
How is an action plan different from a marketing and sales plan? Your business plans entail more than your marketing tactics and customer acquisition strategy. An action plan details how you operate and run your company. How do you hire and manage employees? How do you ensure production is always on time without delays? What are your criteria for picking a vendor, and how do you communicate with them? You must also mention how long it takes you to fulfill orders and how you deal with industry changes and disruptions. If you have a plan B for unexpected circumstances, you should also mention it. All this information convinces investors and collaborators that every move you make is informed and tailored to reach your objectives.
9. Financial Plans
When you finish writing your business plan, you must calculate your monthly and annual expenses. There are many operational costs you need to take into consideration. If you have a physical store, you should account for your rent. On the other hand, if you are operating strictly in the digital world, you need to know the cost of the software that keeps you up and running. Additionally, you have sales and marketing costs for your online promotional campaigns and ads.
To give interested parties an idea of your financial situation, you can create income statements, balance sheets, and cash flow statements. The former compares your expenses with your revenue and shows whether you have profit or loss. Balance sheets underline your business equity. You can find this number by deducting assets from liabilities. Lastly, cash flow statements are similar to income statements. The difference is that they also include the dates you receive your revenue and take care of your expenses.
How Can You Create A Lean Startup Format?
Partnerships
When you start your own business, chances are you are not working fully independently. You probably work with various vendors, subcontractors, strategic partners, and external collaborators. Mention the names of these people and companies and explain in which areas they will provide their assistance and how they will help you achieve your goals.
Activities
How do you plan to target your audience and boost your sales? You may utilize various promotional channels, including email marketing, content marketing, popup banners, cold calling, and social media marketing. Underline each channel and include specific techniques you plan on implementing. For example, you may create an email drip campaign to nurture your clients and continuously provide them with informative content. On top of that, you must mention what technology you'll be using to bring your plans to fruition.
Resources
Another key feature of your lean startup business plan template is your resources. Under this category, businesses typically add their employee names and expertise, company capital, and any intellectual property. The more experienced and established your workforce is, the more trust it will instill in clients and investors.
Competition
Before you can pinpoint your competitors, you must know your target market and your customers' needs and preferences. Then, you can understand which are the top dogs in the field and why they are at that point. What do they offer, and how can your services surpass them? A comprehensive market analysis will help you underline your drawbacks and fix them.
Value Proposition
Business plans must include a detailed value proposition, also known as a unique selling point (USP). Highlight what makes your business unique and why your target customers should pick you over your competitors. This step is pivotal so you can stand out in a congested market with myriad solutions.
Milestones
Any business plan template has a specified section about milestones and KPIs. You need to explain to investors how you plan to execute your plan and measure its performance. Therefore, you must set SaaS metrics that will track each activity and provide you with measurable results. Just ensure these KPIs align with your overall business goals.
Revenue Streams
When you own a business, you probably worry about the money you earn and whether it is enough to cover your expenses. That's why you should create a revenue stream that guarantees sufficient income. For example, an HR software company makes money by selling subscriptions to its employee engagement and employee onboarding tools. Your company may also be doing direct sales or offering advertising opportunities for other businesses.
Problems You Solve
When you have a startup business or you want to kickstart your market penetration strategy, you must showcase which industry problems your service solves. Start by mentioning your target customers' pain points and daily challenges. Establish the foundation before adding how your solution will help them overcome their struggles and succeed. You can mention your product's unique features and why they set your business apart from the competition.
Cost Structure
Your idea may be one of the best investors in your industry have ever heard. But how much will your endeavors cost? You should include both fixed and variable costs. This way, you can make informed decisions and be transparent with your investors and collaborators. They must know how healthy your company is before deciding to offer you financial help.
Key Takeaway
If you didn't know how to write a business plan and fill out a template, now you have a pretty good idea of how to perform this crucial step. Whether you need to build an eLearning startup, traditional, nonprofit, or growth plan, the strategy is pretty much the same. In a traditional business plan, you must include an executive summary encapsulating the gist. Your company description and products show investors what your business does and what types of services it offers. A market analysis and customer segmentation are crucial to understanding who your competition is and what your customer profiles look like. Don't forget to highlight your marketing techniques that will help you boost sales and increase conversions.
So, how does a SaaS business plan differ while helping you avoid common startup mistakes? While you should still include the same elements, you also need to add your partnerships, resources, marketing and sales activities, USP, competitors, costs, and revenue streams. Underline the problems your service wishes to tackle and how it will help clients overcome their pain points. Don't forget to add milestones and link them to measurable metrics that help you track your marketing efforts and optimize them if needed. Once your business plan is complete, you can create a proposal to summarize the main points. In some cases, investors don't need to read the pages-long plan but a shorter version.
Originally published at eLearning Industry.com