How to write a business plan for small businesses

Video: Business Plan for Small Businesses | How to Write a Business Plan

Content

Steps
Part 1 of 3: Preparing to Work on a Business Plan
Part 2 of 3: Developing a Business Plan
Part 3 of 3: Completing the Business Plan
Tips
Additional articles

A business plan is a written document with an expanded description of what your business is, what markets it is going to cover and how it will get there. The business plan presents in a special form the financial goals of the company and the methods of its positioning in the market in order to achieve the set goals in the current market conditions. In addition, having a business plan is a prerequisite for attracting outside capital to your business. This article will walk you step by step on how to prepare a business plan.

Steps

Part 1 of 3: Preparing to Work on a Business Plan

1 Determine the type of business plan you need. Despite the fact that all business plans are similar in the presence of a description of the company's goals, its structure, market analysis and projected cash flows, they come in different types. Below are the main types of business plans.
- A short business plan is a small document (usually up to 10 pages of text) designed to describe the potential attractiveness of your business and serves as the basis for further developing a business idea or for preparing a full-fledged business plan. This is a great starting point for everything else.
- Working business plan. This type of business plan can be considered a complete version of a short plan. Its purpose is to accurately describe the organization and conduct of the business, while the document does not place much emphasis on creating an external gloss. It is to this business plan that the business owner will regularly refer to the gradual approach to the set goals.
- Presentation business plan. A presentation business plan is intended for third parties and not for those who own or operate the business. These persons include potential investors and bankers. In essence, it is the same working business plan, but with a focus on creating a rosy market presentation, using proper business language and appropriate terminology.Although the business plan is initially prepared as a guideline for the business owner, a presentation business plan should be prepared with an understanding of what it will look like in the eyes of investors, bankers and the public.
2 Understand the basic structure of a business plan. Regardless of whether you choose a short or complete business plan for yourself, it is very important to understand the basic structure of the future document.
- The first basic element of a business plan is a description of the business concept. Here it is necessary to describe the business itself, its market, products, organizational structure of the company and its management system.
- Market analysis is the second main element of a business plan. The business plan that you have prepared will be applicable to the specific market in which the company will operate, so it is important to understand the demographics of customers represented on it, their preferences, needs, purchasing behavior, and also take into account possible competition.
- The third main element of a business plan is financial analysis. If you are just starting your business, this includes projected cash flows, capital expenditures, and also provides balance sheet data. It also provides a forecast of when the business will become self-sustaining.
3 Seek professional help in preparing a business plan. If you do not have an economic or financial education, it would be a good idea to seek help in preparing a business plan from a professional accountant or financier in order to draw up the analytical part of the document with his help.
- The aforementioned constituent elements of a business plan are generalized. They are usually divided into seven main sections and a conclusion, the sequential preparation of which will be described in more detail later. The main sections of the business plan are as follows: explanatory note, company description, market analysis, organizational structure and management system, production plan, marketing and sales strategy, and financial plan.

Part 2 of 3: Developing a Business Plan

1 Use the correct format for your document. Number the names of the parts of the business plan with Roman numerals: I, II, III, and so on.
- Although the “Explanatory Note” part of the business plan (which gives a brief formal overview of your business) is in the first place in the document, it is usually prepared last, since it requires all the information contained in the rest of the document.
2 First, prepare your company description (II). To do this, describe your business and indicate the markets that it needs to sell goods or services. Briefly describe your target customers and ways to achieve success.
- For example, if your business is a small coffee shop, the description of the company might look like this: "Aromat Coffee House is a small food service establishment in the downtown area, offering visitors premium natural coffee and fresh pastries that can be enjoyed in a relaxing atmosphere and a modern environment. The coffee shop is located adjacent to the local university and aims to provide an opportunity for students, teachers and business center employees to learn, socialize and simply relax between classes and business meetings in a comfortable atmosphere with a cup of coffee or other drink. disposing to the main consumers of services, using premium quality products and organizing excellent service, the Aromat cafe will stand out from its competitors. "
3 Conduct market analysis (III). The purpose of this section is to study the data and demonstrate your knowledge of the market in which the company will operate.
- Include a description of your target market in this section. In this case, it is necessary to answer a number of questions.Who is your target customer? What are his needs and preferences? What is its age and location?
- Be sure to also include competitive analysis, which is the collection and research of information about direct competitors. List your competitors' main strengths and weaknesses, and their potential impact on your business. This section is extremely important as it demonstrates how your business will gain market share by focusing on the weaknesses of competing companies.
4 Describe the organizational structure of the company and its management system (IV). This section of the business plan describes the key personnel of the company. It also provides detailed information about the owners of the company and hired management personnel.
- Describe your staff's experience and processes for making important business decisions here. If the owners and managers of the company have a wealth of experience in the industry in question or an impressive portfolio of successful projects, emphasize that.
- If you have a diagram of the structure of the organization, include it in this section.
5 Describe the production plan for your products or services (V). What exactly are you selling? What is special about your product or service? What is the consumer benefit? How are your products or services better than your competitors?
- Raise any questions you might have regarding the life cycle of your product. Do you currently have a prototype of the planned product or are you still developing it? Are you going to file a patent or copyright? Check all the actions you are planning here.
- For example, if you're preparing a business plan for a coffee shop, you might include a detailed menu listing all the products you offer. Just before the menu, you will need to give a brief description of why this particular menu allows you to stand out from the competition. For example, you could write something like this: “Our coffee shop will offer customers five different categories of drinks, including coffee, tea, smoothies, sodas and hot chocolate. The wide variety in each of these categories will be a key competitive advantage as our main competitors in there is currently no such variety. "
6 Describe your marketing and sales strategy (VI). In this section, it is necessary to indicate how you are going to penetrate the market, how you will ensure the growth of your market share, find customers and supply them with your products or services.
- Be clear about your marketing strategy. Will you have sales reps, billboards, product order catalogs, social media marketing, or all of the above?
7 Make a financial plan (vii). If you are preparing a business plan to secure funding for yourself, include a section on the required capital expenditures. Describe how much money you will need to raise your small business. Provide a detailed description of what exactly the start-up capital will be spent on. Provide a schedule for borrowing and financial payments.
- Prepare financial statements that prove your solvency as a borrower. To properly execute this part of the business plan, you may need to hire an accountant, lawyer, or additionally resort to the services of other professionals.
- The reporting will need to include all historical (if the business has been in business for some time) or projected financial data, including forecast statements, balance sheets, cash flow statements, income statements and expense budgets. Subsequently, all this will need to be supplemented with annual reporting. All these documents will be included in the annexes to the business plan.
- Make a cash flow forecast for at least six years ahead or until a steady pace of business expansion is expected. Whenever possible, use discounted cash flows in your calculations.
8 Write an explanatory note to the business plan (I). The explanatory note will serve as an introduction to your business plan. It should include a description of the company's mission and provide the reader with a summary description of its products and services, target market, and aspirations and goals. Remember that this section of the business plan should be located at the very beginning of the document.
- An already operating business must provide a brief history of the company. When did the concept of this business come about? What are the notable successes of its growth in recent years?
- For a newly created company, it is necessary to focus on industry analysis and defining its goals. Mention the structural organization of the company, its need to raise funds, as well as your willingness to offer investors a stake in its authorized capital.
- For both the current and the newly created company, it is necessary to highlight any major achievements, contracts, indicate current or potential customers, and summarize plans for the future.

Part 3 of 3: Completing the Business Plan

1 Complete the business plan with the final part (VIII). This very last part of the business plan should provide additional information. It may be helpful for potential investors to familiarize themselves with it before making a final decision. Documents that support the statements you made in other parts of the business plan should be attached here.
- This will need to include accounting records, a credit report, existing licenses and permits to do business, legal documents and contracts (to demonstrate to investors that revenue forecasts are supported by specific business relationships of the company), as well as these summaries of key company officials.
- Provide an analysis of the risk factors. In the same part, it is imperative to include a subsection that clearly reflects the risk factors that can affect the activities of your company, and your plans to counter these risks. This will demonstrate to the reader how well prepared you are for the unexpected.
2 Review and edit the business plan. Check your business plan for spelling and grammatical errors. Check several times before considering the latest version as final.
- If necessary, rework or completely rewrite the text content of the document so that in the eyes of the reader it confirms the effectiveness of the business plan. This is especially important when creating a presentation business plan.
- Reread the document out loud. This will allow you to see any sentences that don't relate very well to each other, and previously unnoticed grammatical errors.
- Print out a copy of the business plan and let a trusted person or colleague read the document so that he can identify other possible errors and give feedback on the result of your work. You can also pre-sign a non-disclosure agreement with this person to protect your business idea.
3 Prepare a cover page. The title page allows you to immediately identify the document, gives it an aesthetically designed and professional look. It also helps make the document stand out.
- The title page should include: the words "BUSINESS PLAN" centered in bold, the name of the company, its logo and contact details. Simplicity plays a key role in the design of the title page.

Tips

In addition to the information in this article, it will be helpful to read the Forbes Business Plan Guidelines.
In order to support small businesses, local authorities periodically organize special events in the regions designed to familiarize people with the specifics of organizing and running their business. In order not to miss important events, try to follow the news feed of the administration of your locality or region.