How To Write A Business Plan: The Traditional and Lean Formats
Learning how to write a business plan is what can make or break your business idea. Whether you succeed or not depends heavily on your business plan structure and how well you follow it. According to Investopedia, the business plan definition is a document that contains a company’s goals and how they can make it happen. It is basically a roadmap that a business follows to ensure success. Business plans are so important that both large companies and small businesses utilize them. From marketing plans, financial projections, and operational plans, your business plan will contain all your business needs to operate successfully.
There are many advantages to business plans. In this blog, The Write Direction will show you all the components of a business plan and where you can get a business plan writer to help you get your ideas translated into a real feasible business plan.
Why Writing A Business Plan Is Important
Having a business plan layout is fundamental to any start-up business for many reasons. Building an operating business is no easy feat. Before you can even begin operations, you’re going to have to learn how to create a business plan because it’ll constantly keep you on track while you’re building from the ground up. Granted, some plans never 100% get followed through, but it’s best to be prepared so you can know what to expect, how much to invest, and all the other action plans that will bring your business idea to fruition.
One good reason to write a business plan is it will help you get approved for loans. Whether it’s from banks, venture capitalists, or friends and family, a real viable business plan is what can get you the business’ financial requirements.
While business plans can have similar layouts, no two plans are the same even for the same business. What’s feasible for others might not be feasible for yours. Business plans also prepare you for what might not happen which means you also have to account for possible downfalls so you can plan ahead and make solutions for future potential problems. If you think you can build a successful business without first learning how to write a business plan, you might be left overwhelmed, lost, or worse, might never see a return on your investments. Luckily, The Write Direction can show you the business plan format that can jumpstart your business ideas.
Why You Need A Business Plan
A business plan is essentially your north star. The plan to follow and the guidelines for your success. Your business plan tells you and others what your ideas are and how you plan to execute them. Not only that, it’ll contain how the business plans to keep operating, what it’ll take to keep it afloat, how much it will need to be built, how many people you need to have on your team, and so much more.
If you’re unconvinced about the importance of having a business plan, here are some reasons why you need a business plan to consider.
1. Having a clear vision
Sometimes your ideas are better understood when they’re written down or verbalized. Just like freewriting is a great way to get your ideas going, creating a business plan will not only help others understand your idea but yourself as well. You’ll get to decide on the nitty-gritty important details like who your business’s target market is, you’ll get to learn how competitive the market is, and how you will set yourself apart from the competition.
2. Assessing the feasibility
Knowing how feasible your business idea is will help you tweak and perfect it until the idea becomes doable. If your business plan is well-structured, you can easily assess how you can bring concepts to life. Being real about your business’ feasibility will also prepare you to mitigate potential problems that could arise.
3. Funding and Investments
To create a business, you’re going to need money to make money. You’ll need to decide how you’ll execute your business ideas and whether they’ll be funded by investors, lenders, or just yourself. When you do eventually sign up to get business loans, lenders will require a comprehensive business plan because it’ll be their money on the line and they’ll be less likely to invest in unrealistic
4. Making correct decisions
Having a framework to base all the work you need to do will ensure you make the right decisions business-wise. A business plan will keep you on track and aligned with your goals.
5. Setting goals
If there are specific goals you want your business to achieve, whether it’s establishing influence, creating a physical store, or reaching a specific sales target, they should all be outlined in the business plan. Along the way, it’s inevitable for certain plans to change, but if your business plan is written right, it’ll allow you to envision your goals using SMART (specific, measurable, achievable, relevant, timebound) goals.
6. Attracting the right team
When you create a blueprint for creating your business or company, it’ll be clearer not just to you, but to others as well. That means people aligned with your same goals are more likely to gravitate toward you and help you achieve common goals. Whether it’s business partners or the right employees, your clear business plan will help you attract your perfect team.
7. Researching the market
Going in blind in a business venture without first researching the market is not recommended at all. Now that there are resources that allow you insight into market trends, competitor details, and more, there’s no reason to not do your due diligence and research the industry you want to join. Business plans outline all the data available that will help you build your business.
8. Anticipating obstacles
Writing a business plan will allow you to anticipate potential business challenges or obstacles. There are many risks involved in starting a business but you can make contingency plans and prepare ways to mitigate those risks when you learn how to write a business plan.
9. Communicating needs
A business plan allows you and your team to work as a unit because you’re following a specific plan, making it the best communication tool. Not only that, you can communicate your vision to not just your team but to future partners, investors, or stakeholders. You’ll need to get a lot of people on board to get your ideas off the ground. A good business plan will be able to convince a lot of people to get involved.
10. Monitoring progress
Your business plan can also serve as a checklist as you build your business. You’ll be able to track how much progress you’ve made by seeing all the steps you’ve done and the steps you’ve yet to take. Once the business is running, you can refer to your business plan to compare how the business performs to your projected goals. Seeing how close or far you are to the goals outlined in your business plan tells you where and how you’ll need to adjust or make improvements.
How To Write A Business Plan
The U.S. Small Business Association or SBA, business plans can help you run your business smoother. Business plans serve as a “roadmap” on not just building the business but running it, structuring it, and growing the business. It also helps you get funding and get investors on board your budding business idea.
One thing to note is there’s no right or wrong way to make a business plan because no two businesses are alike. You might follow a startup business plan template but produce different results because ultimately, a business plan is tailored to your business’s specific target, goals, and projections.
There are two most common business plan categories which are the traditional business plan and the lean startup business. The traditional business plan is the most common type. Also known as a standard business plan structure, can require a lot of work and can be worth dozens of pages in length. Even lean startup business plans also use a standard structure but can be condensed into just one page.
To know which format to use best, read more to know whether you should follow a traditional business plan format or a lean startup format and you’ll learn how to write a business plan step by step. Better than providing business plan examples, The Write Direction will show you all important subfactors in learning how to write a business plan.
The Format To A Traditional Business Plan
To ensure that you’ve researched enough to really push through with your business plan, here are all the facets you’ll need to have a traditional business plan.
An executive summary gives the reader, who could be your potential investors, an overview of what the company is and why you think it’ll succeed. It’ll also contain your company’s mission and vision statements and what product or service you’ll aim to provide. Some basic information like the company’s leadership team, its employees, location, and especially financial information should be included. If there are any growth plans that are projected that need financing, you should also include them in your executive summary. This part should have your “pitch” and ultimate selling point if you’re using your business plan to get funding or help in financing.
Your company description should be as detailed as possible. Include more of your pitch here and specify how your business can solve problems or how it’ll affect the lives of its customers. You should describe in detail who your target customers are, whether they’re individuals or other organizations and businesses. The description should also highlight what will make the business a success and how it’ll navigate the existing competitors in the market. Essentially, the company description should be the place to highlight all the business’s strengths.
Market analysis gives insight into your business’ industry and how it performs in the marketplace. In order to penetrate the market and compete against already existing businesses, you’ll need to research your competitors, their strengths and weaknesses, how you plan to conduct your business better, and more.
Organization & Management
In learning how to make a business plan, you need to basically outline how the company or business’ hierarchy will be set up. This subpart of the business plan shows how the business will be structured and who will be responsible for specific facets of the company. There has to be an organizational chart that can clearly show who management is along with all the members of the company. All business employee’s CVs and resumes, including their roles in the company, should be added here.
This section should also tell the legal structure of the business. Whether it’s an LLC, an S or C corporation, a limited or general partnership, or if it’s a sole proprietorship.
Service or Product Line
A very important part of how to write a business plan is telling readers what you will offer consumers, whether it’s a service or a product. If your business is selling a product, you’ll need to detail the product’s life cycle (how it’s produced, where it’s from, how it’ll benefit customers, etc). This section will also contain your plans for licensing intellectual property, copyright, and patent filings. If the product is fairly new to the market and you’ve done extensive research and development for it, that should also be specified in this section.
Marketing & Sales
Marketing strategies vary for every business, company, product, or service. You’ll need a flexible marketing plan to adjust to industry needs, customer preferences, and other unforeseeable factors.
To write your marketing and sales plan along with your business plan, describe how you aim to attract customers and more importantly, keep them repurchasing your product or service. You should also go into detail about how a sale can push through or happen. Describing your marketing and sales plan in great detail makes it easier when you’re making financial projections and need to estimate how much you’ll be investing to market your product or service.
Most businesses have backers, investors, stakeholders, and shareholders in order to be built. It takes money to make money, so funding is a huge part of how to start a business. This is where you’ll list all your requirements investments-wise, and explain what your goal is and how much it will cost.
There are many different terms and conditions that you can offer your potential investors. Every expense should be listed down and where the funds will be allocated. You can tell whoever’s helping fund the business whether you want debt or equity. You should also make sure that your future plans are strategic and that you have backup plans for paying off the debt or selling your business.
A financial projection is supplemental to your funding request with the goal in mind of convincing your potential investors that your business is worth investing in. Not only that, but that you have concrete plans to keep it running.
Business plans are not just new up-and-coming businesses. If you have an already established business looking to pivot, expand, or revamp, you would also benefit greatly from making one. If you’re looking to get investors to fund your growing business, your financial projections should include income statements, balance sheets, and all cash flow statements from past and current years.
You should prepare a financial outlook that goes as far as at least five years. It would be beneficial to be very specific, especially for the first-year projections by breaking it down into quarterly or monthly projections. If you have graphs and charts showing these projections, they would be best added here.
There might be other supporting documentation needed like credit histories, product photos, resumes, reference letters, permits, licenses, legal documents, patents, and other contracts that you can add to the appendix if they are specifically requested. They might not always be required, but it’s best to have them on hand in case it is required from you.
Lean Startup Format
With the keyword here being “lean”, this format of a business plan is a lot less extensive than the traditional version that it can even be condensed into one page. This business plan format is best if you need to explain your business idea quickly and simply or if you plan to keep revising it as your business grows.
If there are other businesses and services that you work with to keep your business running like suppliers, manufacturers, or subcontractors, you’ll need to write them down in your key partnerships.
The key activities you need to write down pertains to the business activities that keep your business at a competitive advantage. Whether it’s your business’ strength in direct selling to consumers, or technological advances used, you can highlight that in this section of your lean business plan.
What are your company’s key resources that are worthy of highlighting and the resources that you can leverage that create value for your customers? Maybe your key assets are your staff or intellectual property so be sure to add that in this section.
Your value proposition is a compelling statement that showcases the value your company brings to its customers and the market.
What does your company’s relationship with its customers look like? It might be conducted through automation or it might be personal, either online or in-person. Whatever it looks like for customers to interact with your business from start to finish, make sure you highlight that here.
Your customer segment tells the reader who your exact target market is. Your business, product, and service won’t necessarily benefit everyone. It’s important for your business to have a clear sense of who it is and who it plans to serve.
Tell the reader of your business plan the channels you’ll need to reach and communicate with your customers as a company. Usually, businesses use a mix of channels which are constantly being optimized.
Your business’ cost structure is an aggregation of a variety of business costs. Essentially, it will contain all the business expenses. Having a cost structure is helpful in deciding how your business sets pricing and also identifies where expenses can be reduced to maximize value.
What are your company’s revenue streams or rather how exactly does your business plan to be profitable? Examples of revenue streams are direct sales, rental or advertising spaces, membership fees, subscription fees, licensing, and more. Whether you have one or more revenue streams, list them all down here.
Where To Get Business Plan Templates
With The Write Direction, not only will you have a business plan template, you can actually get your own custom-written business plan.
The Write Direction not only understands business and technical writing, but because we mainly serve other businesses, we know what it takes to make a killer business plan that is destined to succeed. Each business plan purchased from The Write Direction will have elements of the traditional business plan format but you can also request specifics and collaborate with our writers to create a foolproof plan to business success!
Why The Write Direction?
You can save yourself the time, hassle, and inconvenience of doing all the industry, market, and financial research that creating an extensive business plan entails. At The Write Direction, business writing is what we do best. We’ve had plenty of experience helping businesses work seamlessly and we can do it for you too!
1. Each business plan is tailor-made and customized to the customer’s business goals.
2. Your business plan will be written by business experts and planners who are guided by owners that have successfully built multiple businesses.
3. Quick turnaround times for business plans made efficiently without its quality being compromised.
4. The Write Direction provides superior customer service and conducts business in the most professional manner.
5. The Write Direction complies with all Canadian Business Standards.
What’s Included in a business plan written by The Write Direction?
1. Executive Summary
2. Business Opportunity
3. Industry and Market Analysis
4. Marketing and Sales Strategies
5. Management and Operations
6. Financial Projections
7. Supporting Documentations
Beyond the basic subsections of a good business plan, The Write Direction also offers additional services that you can also avail including:
- Competitive Analyses
- Master Budgets
- SWOT Analysis
- Grant Application Letters
- PESTEL Analysis
- Pitch Decks
- Value Chain Analysis
Thinking of starting a business from the ground up will require a lot of your resources. One worth investing in is a company like The Write Direction, which understands the market, how businesses work, and most of all how proper technical and business writing can elevate and bring to life intangible ideas. You can even refer to some of the work we’ve done for other businesses.
No longer will you need to learn how to write a business plan on your own, let the professionals handle it for you!