Writing a business plan is very significant for business studies students as well as entrepreneurs. However, in this blog, we are going to cover this topic particularly for business studies students who are wondering how to write a business plan. It is a very common question among management or business studies students because in order to pass the exam and earn the degree they have to produce a well-defined plan for a selected business. So, if you are also looking for tips to write an impressive plan for the selected business, this blog is going to help you. Before proceeding with the tips, it is essential to know the basic concepts of the business plan. Thus, let us begin by introducing the concepts.
What is a business plan?
A business plan is defined as a document that contains all essential information that is needed to set up and run the business effectively and efficiently. It includes core business activities, key goals, and objectives, mission and vision of the business, business and marketing strategies to achieve the determined goals, etc. “A well-defined business plan guides you through different stages of the business ranging from starting to managing the business.”
It plays a very important role in achieving the overall goals and objectives of the business. But developing an effective plan is a tough task. It requires plenty of skills, knowledge, and competencies. So, you need to learn the required skills, knowledge, and competencies so that you can develop the plan. Moreover, you also need to learn the basic elements of a business plan so that you can focus on each element effectively. Now, let us dive into the next section and learn the key elements.
What are the elements of a business plan?
If you are planning to write a well-designed plan for the business, you must focus on its various elements. These elements make the format of the plan. The format determines the effectiveness and reliability of the plan. Here, we can classify the format of a business plan into two such as traditional format and lean start-up plan. The elements of each format differ. So, we will learn the elements of each format one by one.
Note- You may also be looking for types of the business plan. There are two types of a business plans such as traditional and lean start-up. These two have been covered below in detail.
The traditional format of a business plan
People, who are very detail-oriented and want to develop a comprehensive business plan, focus on using traditional format. Apart from this, those who plan to fund their businesses through traditional sources also use traditional format to develop the plan.
One thing, that you need to keep in mind while developing the plan is that you should not stick to the exact format or outline. Rather, you should focus on including only those sections that make sense for your business and fulfill your needs. There are nine key sections in traditional format.
Abstract or Executive Summary
This is the brief of the whole paper or the plan. You need to tell what the plan is all about. Briefly include key findings of the paper as well. A brief detail of the business its products or services should also be included in this section. Mostly, the executive summary is covered on one page.
Description of the company
This section is all about the description of the company. In this section, you need to provide the nature of the business, products, and services. Tell the readers the problem that your business intends to solve. You need to be very specific and highlight the key customers.
Analysis of the market
This is the core of the business plan because it provides crucial information regarding the potential of your business. Market analysis provides an understanding of the target market, potential customers, market trends, potential of the market, and many more key aspects of the business. Market analysis is very significant to develop key business strategies to achieve the predetermined goals and objectives.
Organization and management
In this section, you will tell your reader about the structure of the organization. So, you need to focus on the legal structure of the organization. You can also include an organizational chart to provide a clear picture of the organizational structure. It gives a sense of how your organization is going to be managed.
Product or service
In this section, describes the product or service that your organization is going to offer to customers. It includes a detailed description of the product or service including key features, benefits, and advantages. If the product or service requires a description of how to operate it, you should provide that as well.
Sales and marketing
Approaching the target market in the right way is essential to achieve success in the market. There is no defined way of approaching the target market. You always need to be the focus on the target market and changes taking place within the market to design and develop a marketing strategy. Effective marketing strategies are of utmost importance for the success of the organization.
If you need capital to fund your business, you can request funds in this section. If you are looking to raise funds for your business, add this section to your plan. So, you should describe how your business is feasible and achieve success.
Making a financial projection is very important to analyze the potential of the business to generate profit. It is also needed to convince the investors to fund the business. If you have established a business, you should include the income statement, cash-flow statement, balance sheet of the business, etc. If you do not have an established business and you are going to start a new business, you need to describe how capital will be collected to fund the business, how sales and revenue will be generated and the break-even point will be achieved.
You should use this section to provide supporting documents to support the argument made in the plan.
Lean Start-up format of the business plan
This format is used for a simple business that can be quickly started. Therefore, if your business is simple, you should use learn start-up format. There are only a handful of elements in this format that describe the value proposition of the business, finances, customers, and infrastructure. You can also find a template online to develop a plan. The following are the key components.
You need to include other services or businesses that you will be working with to run your business. It may include manufacturers, suppliers, distributors, contractors, and strategic partners.
It is essential to gain a competitive advantage to run the business successfully in the market. Therefore, you should list out the activities that can help you in gaining a competitive edge over key competitors.
Every organization requires resources to function and achieve success. So, you need to identify key resources that are essential to run the business. You also need to ensure that those resources are available for the operation.
Value proposition determines the performance and success of the business. So, develop a clear as well as compelling statement that describes the unique value of the business. It helps in positioning the business into the mind of potential customers.
Identify the target market and potential customers. You need to be as specific as you can because it affects the business decision and strategies.
Customer relationship is a key to achieve success. So, define how potential customers will communicate with the business. Some key options are in-person and online.
The organization also needs to communicate with potential customers. Therefore, you should list out how your business will interact with potential customers. You need to consider multiple channels to improve the effectiveness of the communication.
Defining cost structure helps in reducing the overall cost of the organization and improve profit margin. You can also define the strategy to manage the cost of the business.
It includes the explanation of how your business is going to generate revenue or make money. You need to list all revenue streams that your business has.
Writing an effective business plan would help you in gaining good grades in assignments or exams. This blog has given you a glimpse of writing a plan. If you still have confusion regarding how to write it and you are looking for a professional to write your plan, feel free to get in touch with MBA Assignment Help.