How to Write a Business Plan? Step-by-Step Guide

You want to start a business and you've been advised to start with a business plan. That's great. The only problem is you have no idea where to begin. Don't worry, you've come to the right place. Hello world, Mike Ploeger here again with VisMe to help you conquer the universe or to help you grow your business through design and marketing expertise. Either way, today we're going to help you devise an effective business plan. While a lot of people simply talk about their great ideas, you're different. You're ready to take the next step to sharing your idea with the world and turn it into a true business. The first thing you're going to need is a business plan. What is this exactly? Why is it necessary? What should you include in your business plan? All great questions that I'll answer for you here shortly. And for those of you who are looking for a shortcut, I'll even share some templates you can use that'll make your life a whole lot easier. Shall we? Now, before we hop into our eight steps, I do want to take a quick moment just to highlight what a business plan is for those of you who are unfamiliar. In the simplest of terms, it's putting a business idea on paper and looking at it from a bird's eye view. So if you have an idea for a unique coffee shop, I don't just mean writing out coffee shop. You need to dig into your goals, objectives, your audience, your products, characteristics, and so much more. Sure, you can start with your business name, but this will end up being a multi-page document that should make any reader not only believe in your idea, but in you. And please, whatever you do, don't make it consist of only words and facts. A business plan should consist of images, infographics, colors, shapes, and more, as we see here with our first VisMe template. There's four reasons why a well-thought-out and well-written business plan is important. You may think all of this is a waste of time and you can just run with your idea, but I don't encourage you take that route. For starters, a business plan can help set realistic goals and milestones. By putting these on paper, it's easier to understand what needs to be done in order to accomplish them. Sure, you want $100,000 in sales your first year, but what steps are you going to take to reach that? Writing out one big goal without the small steps to reach it can often make that goal feel unobtainable. Another reason is a business plan helps you stay organized, in turn growing your business faster. A study published by the Journal of Business Venturing found that companies or individuals with a business plan grew 30% faster than those that winged it. A business plan will also help you reduce risk. By writing a roadmap, you'll be able to see potential obstacles more clearly. And lastly, if you're not sold yet, perhaps the biggest reason a business plan is important is because it can be the difference in an investor giving you funds or not. If you're looking for help, whether from a friend, family member, or one of those people on Shark Tank, a business plan will go a long way. Even if it's not read immediately, it'll make you appear more professional and serious about your ideas. And while we're here to discuss and share business plan ideas, there's Pitch Tech templates on visme.com as well. Just like our business plans, they're fully customizable to fit your needs and make any investor want to put their money on you. Now getting into our eight steps for writing a business plan, the first is to consider your executive summary. This is essentially the CliffsNotes version of your plan as a whole. It's meant to give readers a quick understanding of your business and what's to come in the following pages. So rather than write this right off the bat, I actually recommend writing the rest of your plan first, then revisiting this at the end so you can sum up what's to follow. To help, an executive summary should consist of your objectives, market research, competitor information, your products and services, a financial plan, a value proposition, and of course, how you're going to get started. Here's a template that Visme provides for this purpose. It states who they are, what they do, who their target audience is, what value they bring, how they differentiate themselves, and it's all in two short paragraphs with a sleek design. The following section of your business plan is your company description. Here you can provide a company history if you have one, or just an overview if you are a younger company. Also, be sure to include a mission statement and any objectives you have, both short and long term. With the mission statement, simply answer the question why you started the company. Again, this doesn't need to be long-winded. It could be a single sentence, a paragraph, or even a personal quote, like we have in our example, to create the event of your dreams. Intriguing. Your objectives are your goals. What are you setting out to achieve in a month? How about in a year or even five years for that matter? And your overview, it speaks for itself. Quickly describe who your company is and what it does. Understanding how your business will fit into its target market is key in being able to predict if it can succeed or not. That's why it's our third step in another component of a business plan. You'll want to spend lots of time conducting research to show readers you have something great on the horizon. What are some things to consider? How about the market size and if it's grown or shrunk in the past couple years? What segment of the market do you plan on marketing to? Is there a specific demographic that you want to target? What's the demand for your product or service? And how do you have an advantage over the competitors? And what's the cost of those competitors' products or services, assuming you don't have a groundbreaking idea? Write these down over one or two pages once you've put in the time and research. Then throw it into a template like this one. A few short paragraphs followed by bulleted facts and statistics emphasizing your research. Alright, hopefully you're not tired of the research just yet because step four is when you want to dive into your competition with a competitive analysis. Start by compiling profiles on your direct competitors. These could be those with products or services most similar to yours or maybe it's those that are closest in proximity to you. Write down their strengths. What are they doing well that you admire and want to emulate? Then write down their weaknesses. What could they be doing better that leaves open an opportunity? Then consider what marketing tactics that they're using. Are they using social media? Are they using mostly print-based marketing like newspapers, magazines, and billboards? Maybe they're advertising through radio. Note these things. Next, you'll want to identify any potential future competitors if your company could take on different products or services in the future. Once you have all of that information compiled and organized, it's time to put it into a document for your business plan. It could be one to two pages and may look something like this. It should break down your competitive advantage and emphasize how you plan on breaking into the market. Your fifth step should be outlining the products or services that you plan to offer. This can be a quick list as we have in our latest example here or you can dive into it a little bit deeper. Just use language that all will understand. There may be big words that only your industry understands so try to dumb it down if you will so any reader will comprehend what you're selling. Perhaps the most daunting section of putting together a business plan is your financial plan. This is going to take some time and it should. This is the section that potential investors or co-founders will consider very heavily. Every financial plan should consist of these five things. The first, a sales forecast. How much do you predict your company will sell in the next year or two? Don't just write down a number, break it down explaining each product or service you offer and how you've arrived at that number. The second is a balance sheet. This is a statement of your company's current financial position. Note existing assets, liabilities and equity to give an overview on your current positioning. Third is an income statement or a profit and loss statement. This will examine whether your company will be profitable or not by covering all profits and expenses. Fourth is your operating budget. How does your income stack up against your expenses? How much money is your company making versus spending? And lastly, you'll want to include any cash flow statements. This will track how much cash your company has at any given point, regardless of whether or not customers have paid their bills. Now with all that said, I can't emphasize enough the importance of using data visualizations for some of these figures. Writing all of this down into a Word document is overwhelming and confusing for a reader. Data visualizations can simplify your numbers and allow readers to understand them with ease. So you've sold the fact that you have a great idea and it makes sense for potential investors and there's money to be made here. Now it's time to actually sell your business. Decide which channels you want to primarily market your company through. Considering the channels that your competition markets to is a good place to start, but don't stop there. Think of the demographics you're hoping to reach. Create a profile of what a typical customer looks like and how they're most often reached or influenced. Then simply create a bulleted list. It can be shorter with details or longer, covering a wider range of marketing avenues. Just be prepared to speak on each item's behalf. Don't throw in social media, blogs, emails, postcards, newsletters, billboards, handouts, videos, digital ads, just because there's enough room for it on one page. Keep it short and necessary. Your last step is to show off your team. You're leading the charge, but who do you have behind you that's going to drive this company forward? This will again help any investors feel better about riding with you. And it's also another opportunity to create an infographic. I know I get a little bit excited when there's a chance to do so, and that's because I know how simple and fun it is to do in Visme. You might see an infographic like this and think, yeah, there's no chance I can ever do that by myself. But that's just incorrect. Visme allows you to start with pre-made templates just like this and then edit it with your colors, images, fonts, and more. You can download them straight to your computer in a high resolution image, and you are done in minutes. And want to know a little secret? We don't have templates for just individual graphics and pages. We have templates for entire business plans. If you're in real estate, we have a business plan for you. Maybe you're in consulting and you have a big presentation coming up. We have a business plan for you. Are you a generic startup looking for those investors to get your company going? Visme has the templates for that too. We have an entire collection of business plan templates that were specifically designed with different industries in mind. Forget the Word documents. It's time to blow your readers away with a business plan built for today. So without further ado, it is time for you to get started. But before you do, I do ask that you so kindly hit that like button for this video. And hey, if you haven't already, try subscribing to our channel. We love to produce helpful workplace videos just like this one. And who knows? Maybe our next video could help you too. Thank you so much for watching. With Visme, I'm Mike Ploeger, helping you make information beautiful.