How To Develop A Good Business Plan

Do you want to learn how to develop a good business plan? Then keep reading. Planning is undoubtedly one of the most important aspects of succeeding as an entrepreneur. A business plan enables you to take control of your future and set yourself up for success. Creating a business plan is always the first step in transforming your business from an idea into something tangible.

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Even though the success of a new business is far from guaranteed, great planning can make all the difference. If you want to give your ideas their best chance at succeeding, then you need to do a lot of research and come up with a solid plan.

A business plan is a useful management tool that is used to run and evaluate a business. It gives you a clear direction of what you want to achieve in business and it includes the basic facts and achievements of your business. 

A good business plan gives you the full value of your hard work, which means you need to spend a considerable amount of time developing a business plan and updating it as needed.

Now, let`s take a look at the basic step in creating a business plan and the requirements on your part, starting with the first thing first.

Start with “Summary” in a business plan

A business plan summary should emphasize highlighted goals and objectives of your business. The summary should be short and leave a good impression that encourages further reading. In your summary, include basic information like:

• Company name,
• Address,
• Phone number,
• Company history and other relevant information.

The summary should express the general purpose of the business. For example, why do you need financial assistance or advice from investors or lenders? And most importantly, a summary should be clear and concise, not ambiguous. All these should show that you are a professional and you know what you are doing.

Make sure you describe your business in detail

This section of your business plan should provide the business details such as:

• Business history, industry trends, and the current business situation,
• Why & when the business was founded,
• Your business and product uniqueness,
• The nature of your products, and the services you render,
• Your success stories over the years,
• Where do you see your business in the next 5 years?
• Your business aims, goals, objectives, and much more.

All of these details should be included in your business plan so that your investor or lender has the required information about your business. It is advisable to have the designated business documentation ready, also for future reference.

Product or service needs to be well-described in your business plan

When developing a business plan, make sure you understand your products and services. Keep in mind that you may not make good sales until you understand your product, add value, and solve your customer`s problems. Learn more about your customer and audience base if you need to.

In your business plan, explain how your products are made: do your produce or purchase from other vendors? Also, intensify your effort for your business benefit. What is the reason people should choose your product over others or why your product is better than others?

State the features and benefits of your products and services, the supplies and timing of delivery, and your patent marks such as copyright or trademark. All of these listed points will make a very good business plan.

A good business plan should clearly describe the management structure of the business

When developing your management structure, you need to write about your management team and explain the skills and responsibilities of your employees.

A company management structure is an arrangement of people and levels in the business that shows the organization’s power lines. There is always a hierarchy set up and it determines who is at the top, how they interact, and whose job it is to do what.

You can also describe your training plan and program such as:

• Recruitment criteria,
• Feedback system,
• Enhancement,
• Ratings,
• And pay or performance structure.

Be sure to include a detailed resume for all major employees. If you have members of the board, include their names and places of work.

Define your business operations

The business operation plan includes business facilities and strategic locations that generate numerous sales, basic procedures, and processes for manufacturing your products – a flowchart can be used for your analysis.

Which raw materials and equipment do you use for your production? If applicable, talk also about the warranty, lease, and service contract.

Also indicate the structure of your business. Is it a sole proprietorship, general partnership, or joint venture? It helps signifies your business mode of operation.

Develop your financial needs in the business plan

Finance is an important aspect of the business that can never be overlooked. A business plan that includes budget needs and amounts explains and supports the ability to invest or repay a loan. This also clarifies the basic details of how you invest in your business and can obtain a loan.

Add income statement, balance sheet, and cash flow statement to provide a breakdown analysis to understand the financial impact and implication of your business’s financial growth.

When developing a financial plan for your business, show not only the need for funds but also the potential future feasibility for investment and debt settlement. This is going to impact the consideration for your external business funding.

Your business plan should emphasize your future strategies

The truth is that 90% of your investors are interested in how far you and your business can go. Everyone wants to see and know their investment potential.

Therefore, project 3 to 5 years forecast into your business plan and strategies. This aspect does more than just create business goals and objectives.

This includes where your business wants to compete and survive in the business world for the next 3 to 5 years and so on.

Understand your target market and let it show up in the business plan

This is absolutely important. A target market is a group of potential customers that you identify to sell products or services to. To identify who these groups are, they can be divided into smaller segments. Usually, these groups are broken up and grouped by

• Age,
• Location,
• Income,
• Lifestyle and more.

Before you start your business, it is crucial to know, understand, and identify your target market, selling price, market size, customer needs, and how your product meet and satisfies special needs. They are the main catalyst for large sales and can never be underestimated in your business plan.

A good business plan with the target market should take the market profile into account and should have a good answer to the following questions:

• Habits – What are your customer buying habits?
• Location – Where do your buyers live?
• Interests – Do you know what your customers are interested in?
• Needs – What specific needs do your buyers have?

Include a competitive analysis when developing a good business plan

It is very important to consider your competitors, so you can know the next step of moving to improve your creativity and business innovation.

A competitive analysis plan includes who your competitors are, and whom you are marketing your product to. Make sure you understand their strengths and weaknesses, their position in the market, and their current status:

• Start-up,
• Growth,
• Promotion,
• Or maintenance in the market.

Ensure you know the two types of competitors and ensure they are well reflected in your business plan (direct and indirect).

Direct competitors offer the same products and services to the same market while indirect competitors offer similar products or services to a different market.

Some other considerations in your business plan

Here are a few other factors to consider in your business plan. To make your business plan well organized and professional, a detailed table of content can be included. The table of content should appear after the summary and before the company description.

You can also include other support documents that may be of great interest to your business plan such as:

• Supported employee resumes,
• Personal financial reports,
• Assets, current facility and equipment lease,
• Testimonials and more.

These documents are not required, but they are important enough to support your business plan. So, we advise you do so.

Your key takeaways how to develop a good business plan

You need clear, step-by-step guidance to make the world of entrepreneurship seem less overwhelming and a business plan is just the tool for this task. It can help you design, run, and grow your new business. It’s a roadmap that guides you through the key elements when running a business so that you are certain they are in place.

Throughout this discussion, we talked about different strategies on how to come up with a good business plan and I want to believe you paid good attention to each one of them. 

As a bonus tip, at the end of your business plan, you can explain how you conducted the market research, the source and resources you used, and the type of research you conducted. Also, provide supporting evidence to your claims. Do that and you are set to come up with an impressive result for a great business plan.

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