This is a step-by-step guide on how to write a business plan that is tailored to your target market. This is the first document you have to put together when starting a business as a solid business plan is the first step to achieving your goals.
Rules for writing a business plan
Make it a shorty.
Business plans should be short and to the point. This is because: 1) you want your business plan to be digestible (no want wants to read a 100-page tome), and 2) your business plan should be easy to update, you are going to continue using and refining it through your business lifecycle.
Tailor it to your audience.
Your plan should be written in a way that the layman can understand it. For example, if you plan to start a custom software company, you must understand that your investors are not all tech-savvy and using jargon can just throw them off. Keep product explanations basic and jargon-free. You can always use an appendix of your business pitch for those who want specifics.
Don’t be intimidated.
Most of the business people don’t have college degrees in business or management, they learn from experience. While writing a business plan for small businesses may seem daunting, it can actually help you gauge your strengths and weaknesses so you can identify what you need to research more on.
Overview of the chapters in a business plan
Now that you have the rules of writing a business plan, let’s dive into the details of actually creating one. This section will deal with what you need to include, what you can skip, the essentials of the super-important financial projections and some additional resources that are useful in giving your business plan some momentum.
- Executive summary
This is the first document and the primary outline of what you want your business to be like. It is about 1-2 pages in length and covers the key highlights of your business pitch for your investors.
- Company overview
Along with the legal structure, mission statement and location which are both important components of a business plan for startups.
If it is a new business you can keep it really short with just the bare details. For an existing company, you could provide a brief history of the company to provide some background.
- Products and services
This is an important chapter as it addresses the reason for your business to exist. What gap are filling or what problem are you solving for your customers? This section could also include potential customer interviews where you have done some field work to support your business side.
- Target market
This section will contain details to who you are specifically selling to. How big is this slice of the pie? If you have more than one market segment (people you are selling to), explain each of these segments in detail for a wholesome sales projection.
Remember that your target market can’t be “everyone”. While technically you may have a product that everyone uses, but realistically you will need to target a specialized segment and work within it to keep yourself focused.
- Marketing and sales plan
This will define your strategies to reach out to your target market. What are the sales and marketing tactics you will be using to get ahead of the competition?
- Milestones and metrics
Investors are interested in seeing how you plan to get your business to grow. This is where they will understand the value proposition of what you are offering. If you have already got some sales or accomplished a key milestone, display it here.
- Management team
Investors also look for value in the team that works behind a business. This chapter will have a summary of your think tank and also who you need to hire for the perfect business plan execution.
- Financial plan
Your business plan will need a financial forecast, especially if you are defining your funding needs to investors. Components that need to feature here are your sales projection, expenses, and profitability.
If you think you need to flesh out details of your products or provide a thorough explanation, the appendix is the place to do so.