Steps to Follow When Crafting a Business Plan

Introduction

A quality business plan could be the difference between boom or bust in your organization. But don’t take my word for it--- a recent study published in the Strategic Entrepreneurship Journal found that companies that planned ahead were almost 20% more likely to enjoy sustained success. This means developing your business plan could be the next step to increased profits and growth.

Keep reading to find out the specific benefits of a business plan and how you can create one for your business!

Benefits of Crafting a Business Plan

A business plan is a strategic plan that details your company’s chief goals and strategies over a period of three to five years or even longer. A comprehensive business plan allows you to set organizational priorities and focus on long-term strategies to grow your business.

No matter the size of your operations, your company could result from a structured business plan that charts your organizational, marketing, and operational strategies moving forward. Let’s take a look at some specific benefits a business plan could bring to your organization:

· Better Understanding of Your Business

First and foremost, a quality business plan offers you a chance to better understand your organization. That’s because creating a business plan requires you to examine your organizational goals and current financial and operational status. When done right, a business plan should give you a better idea of your resources, your potential, and prospective marketing and operational strategies that could grow your business.

· Financing Tool

A business plan can also work as a financing tool. In need of a business loan? Looking to attract investors? A realistic business plan that details your finances and projected growth could be just the right tool to bring in some extra cash to the business.

· Increased Profits

Overall, this means increased profits for your business. With an effective business strategy, you’ll be able to reach your target consumers more easily and deliver on their pain points with greater satisfaction. Better marketing, higher organizational efficiency, and increased cash flow will all stem from your plan to help you take your business to the next level.

Finally- How to Create a Business Plan

Given all this, let’s take a look at some concrete steps you can follow to create an effective business plan. Be sure to keep the following in mind:

· Executive Summary

Your first step in creating a business plan is to write a brief overview, or summary, of your business, including your mission statement, your products/services, any relevant logistical information, and an outline of any plans you may have for your business.

· Company Overview

Following this, you’ll need to write a brief overview of your company. Detail information such as your company’s name and address, number of employees, your business field, names of key members in your organization, etc.

· Business Goals

Next, you’ll want to clearly state your business goals. These could vary depending on the length of your plan. Generally speaking, your plan should map out the next three-to-five years of your business, so be sure to define both your short- and long-term goals. You may include marketing and outreach goals, financial goals, and other milestones you wish for your company to achieve-just remember to be realistic.

· Business Model and Management

Are you a corporation? Partnership? Whatever the case, make sure to state your business model. If your business is not a sole proprietorship, you’ll need to report the amount of ownership-or stake-each owner has. This information isn’t only important for you; it’s also important for any investors or potential partners interested in your business.

· Products/Services

In this section of your business plan, you should expand on what you wrote in the executive summary. Provide a full overview and analysis of any products or services offered by your brand (including potential ones). Consider such factors as your target audience, your pricing model, inventory, and your competition.

· Marketing and Sales Plan

Your next step is to write a comprehensive marketing plan. Evaluate your core consumer base and investigate ways to reach out to them. Here you can consider changes to your branding model that could raise your bottom dollar. Whatever the case, make sure to lay out not only your marketing goals but how you will achieve them.

· Human Resources

Following this, your business plan should contain a detailed HR section that not only identifies the key members of your HR team but also maps out long-term hiring strategies, training tactics, and employee development programs. This section of your business plan will help you stay on top of employee management and hiring and strengthen the capacity of your HR department to deal with the organizational challenges that may arise over the course of your three-to-five-year plan.

· Financial Planning and Projections

Your business plan should also include a comprehensive financial plan for the next three to five years. In order to develop this plan, you need to consider the requirements of all departments in your organization, as well as your business goals. For example, you’ll need to take into account the financial needs of your products/services team, your marketing team, HR, and more, while planning for potential business expansion and investments on R&D and long-term assets, etc.

Because financial planning is by nature complex, you need to chart out your financial plan by month, giving you a more detailed picture of your strategies and resources.

· Appendix

Think of this as the data section of your business plan. In the appendix, you’ll want to provide the in-depth information needed to make your case and satisfy the claims in your plan. This would include more detailed financial and investment planning, marketing and HR data, R&D, etc.

By using the format above, you can craft a business plan that’s thorough and effective, though you’ll need to do the proper research and analysis in order to make sure your plan is realistic and achievable.