Before you learn how to write a business plan, it’s essential to know why you need to make the business plan before starting the business, right?
If you might have seen or heard about the ancient stories of the greatest warriors, they were winning the battle even with a small army.
Do you know why?
Because they did have a proper strategy about every step that they were going to take before and during the battle.
Why were we making strategies? Was it making any sense?
Yes, war is a very sensitive matter and its results decide the destiny and future of thousands of people.
Similarly, business is a very sensitive matter in our life, and execution of business without planning and strategy can move us in the direction of a huge loss as well.
That is why it’s too mandatory to have advance planning of the entire business before we start it, and for that, I have prepared this article to educate you about how to write a business plan step by step.
Why Do You Need a Business Plan to Execute?
You might have one question: why do you need to have a business plan before you start, right?
Yes, and your question is truly valid because if you don’t think in this way, you will not become a successful businessman.
Because the future orientation is the first sign of a business mind. A person willing to be a businessman thinks about the outcomes of steps to be taken in the future now.
Anyway, the question is why do you need to write your business plan, and what is the weightage of it?
It is a long-term process and it also decides your future, the resource of survival for you and your family is the money, and money depends on the business.
If your business will not run in a proper way, the flow of money will get disturbed, and you and your family will face very critical financial issues, and financial issues create many other personal, social, and family issues.
So, the root is your business, and it must be run in a proper way with a certain income flow. And to sustain it smoothly, you must have a pre-planned strategy.
Like, how much investment you will require, which kind of licenses will be needed, will you able to do it alone or you will need a team of workers, how will you marketing, where will you market your products, who will your targeted audience, and many aspects are serious to decide prior to starting the business.
So, I hope, you might have come to know exactly why you need to make business strategies before getting it initiated, right?
How to Write a Business Plan For a Stable Business?
The best of the best businessman commits a big loss if he does not have the proper business strategy or business plan.
There are many sensitive points that you must have knowledge about, like, if you fail in plan A, what would be plan B, and how will you execute it.
What are the legal requirements, and what is the impact of them, which kind of problems you may face during the business journey, etc… These are very sensitive aspects for which you must have prior preparation.
In short, if you have a plan, strategy, and navigation, you can win anywhere in the world, any business you start, there are less than 1% chances of failing in it.
A very critical reason for failing in business is that people are not serious about managing the revenue. They generate good revenue, but don’t note down anywhere, and do not manage it, and at the end of the month, they found nothing on their hands.
Apart from this, there are many points that you must take care of, and in this article, we are going to explore everything and let you know how you can make a perfect business plan to build a successful business model.
1. Concept, Goal, and Mindset
The first crucial step is the concept. All the concepts must be clear to you. How much revenue do you want to generate in the decided time (generally in a month)?
Note down this number somewhere your sight goes frequently, and see it multiple times in a day.
The figures and numbers must be clear in your mind. You must be clear with your goal, and willing to do anything to achieve it.
You might be thinking, yes, it’s simple, I will do this, and I will do that, and achieve ABC amount, but you also need to track in which direction you and your business are moving.
Strategically, you need to give direction to your energy and focus on your thoughts, your potentials, and your willingness.
2. Account Management
For any business, account management is a very mandatory part, if you don’t keep your account maintained, you will not be able to track your business graph.
How much are you investing per month, how much is a recurring cost, how much is a one-time cost, how much is a marketing cost, how much is a misc cost, and how much do you generate the total revenue per month?
Now, the net profit of your business is obtained by minusing the total expenses from the total revenue.
Here, if you don’t have any maintained data about the aspects mentioned above, how would you judge that you are earning or losing the money if earning then how much earning, and if losing then how much losing.
So, Before you start a business, you should manage the accountancy first, and make the preparation for it.
3. Make The Budget For Expense Every Month
If you have tried to know the working strategies of the huge multinational companies, then you would have noticed that they fix the budget for every module of their business.
E.g for marketing they fix some amount like one lakh or five lakh etc… then for the infrastructure, for freelancing work, for salary, for electricity work, and for all modules, they fix the budget.
What is the impact of this step?
The impact is that they create elasticity, and it is the law of nature that every life form is used to be elastic and adjust it in any adjustable form.
If you make the budget before starting a month that I want to spend this amount on this module, then you will be working in that direction and it will save the cost as well.
You will have to be prepared for two things while doing business, and preparation must be written down on paper before jumping into the business.
- Challenges that can come
- Plan for facing them
Why do we tell that we must have enough knowledge about the business which we are going to start?
Because every business has certain challenges that you might have to face, and only knowing about the challenges is not enough, you must also have a plan for how you will manage them.
For example, if you start a digital marketing business, and suddenly all ad networks increase their rates, what will you do?
So, before you start the business of digital marketing, you should have the planning for this event that you will offer the combo plans to your clients which give them low-cost marketing.
5. Marketing and Advertising Planning
Until you market your business, none of the audience will come to know about your products, and that is why marketing is too important.
But….. Remember one thing!
You can sell the bad thing by the best marketing strategies, but you can not sell the best product by doing bad marketing.
While doing marketing, you have two options:
- Online Marketing (Digital Marketing)
- Offline Marketing (Traditional Marketing methods)
You might be thinking of doing digital marketing first, right?
But here you are wrong, first, you need to focus on offline marketing first. Anyway, it’s beyond anything.
For the marketing module, you must have a fixed budget, and it should be spent in a proper way.
While running the campaign, you should have knowledge priorly who are your customers, and whom you will be targeting.
Place, people, and budget must be predefined, otherwise, you will keep spending money, and will not get any result.
Moreover, you need to first analyze where your audience is, and then analyze whether it is the right place to go ahead or not.
If I explain this by an example, then let’s take the example of the Lamborghini car, have you ever seen the advertisement of the Lamborghini car on television or Facebook?
Because the owner of the Lamborghini car knows that he will not find his audience on television or social media, a person willing to buy the Lamborghini does not have time to either watch television or scroll the Facebook page.
6. Executive Summary
While making the business model plan, you should write the executive summary in which you need to mention how powerful your product and service are and how will your business become successful in the future.
You might be thinking about what you write in the executive summary, right? Well, you need to mention just six things in it.
- Mission Statement
- General Company Information
- Product and Services
- Financial Information
- Future Plan
7. Investment Details
Investment is the most important aspect of any business. You must have a clear plan for investment.
- How much investment you need
- From where you will be arranging the investment
- From where you will be purchasing the equipment
- How much backup you have
These four aspects are too mandatory while writing a business plan. Before writing an investment plan, you must have an idea about the type of business.
If the total investment amount of business is Rs 10,00,000/- then you must have at least Rs 18,00,000/- in your hand.
Moreover, you must be cleared with where you will be arranging the investment if you don’t have it right now.
There are many ways, like government loans, venture capitals, or you can make a partnership with someone, or you can borrow a business loan.
8. Licensing and Registration
Many people avoid this step to write and execute while doing business as well, but let me tell you that these two documentation processes are very crucial for your business, and they can create problems in the future for your business.
So, it is very important to have the perfect knowledge about the required license and registration process and need to note it down in your business plan.
9. Determination of Profit
Profit is the end term of any business, and without profit, none of the businesses can survive for more time.
So, before you start a business of anything, it is mandatory to derive the approx profit per month or year.
It will give you the exact idea about investing in different modules of your business.
There is a certain business that contains a very minimal profit per product, like the namkeen manufacturing business, biscuit manufacturing business, etc…
In these kinds of businesses, you need to consider the overall profit margin instead of the per piece profit margin.
Conclusion on How to Write a Business Plan
However, starting a business is not a big deal, but if you start without planning and strategies, it will drive you in the direction of the loss.
So, it is very recommended that you take enough time to comprehend your business idea, conduct deep research on the same, and write the perfect business plan on a notepad.
Once you have a perfect business plan in your mind and on paper, you will be unstoppable and failure-proof.