Writing a business plan significantly increases the chances that your business venture will succeed. If you want to become a successful entrepreneur you should be able to describe what your business does, the industry you operate in and the potential market for your company.

Business Plan Definition

Before explaining how to write a business plan, here is a simple definition:

A business plan (sometimes known as a business proposal) is a written document that describes your core business objectives and how you plan to achieve them over a set period of time.

It is designed to help you, and others, understand how you plan to generate money and make your business sustainable. A business plan often includes information about your goals, strategies, marketing and sales plans and financial forecasts. Read on below for more information about the key sections of a business plan.

The Importance of Writing a Business Plan

Without a business plan, there is no structured way of organizing your thoughts and clarifying your idea. A business plan gives you the chance to document your goals, think through your strategy and identify any potential issues that may arise when trying to accomplish your business goals.

Your business plan will also allow you to measure your progress and plan for the future. With that being said, let us discuss the most effective business plan format that can be used when pitching to investors, securing a business loan or getting a partner on board.

What Should Be In A Business Plan?

This is completely up to you – your business plan should include whatever you think is important, but most investors and potential business partners would also like to see a set of key items in your business plan and here are the proven steps to making sure your business plan effectively demonstrates your understanding of the market and how you plan to succeed:

Step 1 – Describe Your Business and Key Objectives

Include a brief description of your business including its products and services and your short-term and long-term business goals. You should be realistic, explaining how you plan to accomplish these goals given the money, resources and time you have.

Step 2 – Market Research

In your business plan, you should demonstrate a strong understanding of your customers, your market and your competitors. You should also describe how you will position yourself within the market.

Step 3 – Marketing and Promotional Activities

Explain how you plan to get new customers, where you will distribute your products, your brand identity, and how you will spread the word about your products or services such as using social media or google search.

Step 4 – Operations

This includes the number of staff needed to operate effectively, your trading location if applicable and any industry, tax or legal regulations relevant to your business. It is also important to highlight any risks you will face in your business and how you plan to overcome them. You might also want to consider if you are going to have to outsource any work to other people. A common trend with new companies is to outsource your IT needs to managed it services who provide ongoing support to manage your IT needs.

Step 5 – Your Skills and Qualifications

Highlight any relevant skills or qualifications that will help your business succeed. Even if you are starting a business in an industry that is completely new to you, highlight any transferable skills or life experiences that have prepared you for this new role.

Step 6 – Financials

The financial section of your business plan should highlight how you plan to fund things like marketing activities and operations. You should also highlight the major elements of your income statement and cash flow forecast.

Writing Your Business Plan

When writing a business plan, show a good understanding of your target market and customer, use hard facts to back up any statements you make and be as clear and as concise as possible. As we mentioned above, writing a business plan will significantly increase your chance of success.

For an in-depth look into the format and examples of business plans, and to learn more about how to become a successful entrepreneur, join our entrepreneur community.