How to make a business plan

Writing a business plan is essential to . But with so many business aspects to consider, you may be wondering how to properly present crucial information.

Here’s how to make a business plan and the different types of business plans you can use.

What is a business plan and what is its objective?

A business plan is a document that explains a company’s goals and how to achieve them. It contains a detailed planning of the financial, operational and marketing aspects of a company or a company.

That said, it is essential to understand the purpose of writing a business plan. Here are the reasons why you should have one:

• Establish a business focus. Having detailed goals and steps in a business plan helps you focus on the actions that get you there.
• secure financing. Outside investors will look at your business plan to see your goals and how you plan to develop a business. A viable company must have a financial projection and action plans aligned.
• Attract executive talent. As your business grows, you may want to run the company even better. They will likely review your business plan to determine if they are a good fit for the company.

Although a business plan is often helpful for a new or small business, an established company can also benefit from having one. A business can review its plan to see what goals have been met and set new ones for future development or prepare to take the business in a new direction.

Four types of business plans

Each business plan has a different purpose. Some guide the company to attract investors, while others focus on short-term profits. Therefore, you must create a business plan that corresponds to your vision.

Here we present four types of business plans and break down each of them.

Standard business plan

A standard business plan covers all areas of the company. It targets both internal and external parties such as employees, potential investors and suppliers. It is the most versatile model of all.

Later we will discuss the elements of a standard business plan in more detail. In general, it should contain the following

• Executive Summary: covers an outline of the essential characteristics of the company. The summary can also serve as a template for the business plan.
• Company description: Provides information about the purpose and objectives of the company. The company description usually follows the executive summary.
• Market study: analyzes the profiles of target customers, market potential and competitors.
• Organization and management team: Introduces team members and individual competencies and responsibilities in the company.
• Products and services: Describes the products and services offered and how they can compete in the market.
• operations plan: Provides information about daily activities and how products and services are going to be delivered to customers.
• Marketing plan: Specify the marketing strategies that you will use to promote the products and services to customers.
• Financial plan: Displays financial projections and assumptions for ideal business performance.
• Appendix: contains additional information that supports the main idea of ​​the business plan.

Lean Startup Business Plan

The lean business plan uses a simpler format to capture your business plan. It is shorter than the standard business plan, highlighting only essential strategies, milestones and figures.

This type of business plan is useful for tracking the growth of a small business. You can track your company’s performance numbers and milestones, then compare them to projections in a financial report.

It has four essential elements:

• guiding principles: A brief description of the target market, company identity, and business goals for tracking purposes.
• execution strategy– Lists operational strategies, such as promotion plans, social media campaigns, and production planning.
• Measurement of results: defines the parameters to be used and the expected figures. This information can be provided through KPIs and OKRs.
• important numbers– Specifies the basic financial plan, such as sales projections, budget allocations, and expected cash flow.

There are several business plan templates that will help you create one for your company. One of the most popular templates is the , which maps out your business on a single page with nine components.

Summary business plan

This business plan consists of a single page. Condenses all the essential information from a standard business plan into one informative summary.

Despite their similarity to a one-page lean business plan, the two models have a distinct difference.

First, a summary business plan uses structured and written summaries to explain the business. A lean business plan skips that and uses lists, tables, or bullet points.

Second, a summary business plan is primarily used to present a business to external parties, such as investors, banks, or potential partners. Instead, a lean business plan is used primarily to track internal growth.

Complete business plan

A complete business plan is usually aimed at obtaining financing. Hence, it places a lot of emphasis on the financial aspect of the company, without neglecting other elements such as the executive summary, the market opportunity and the explanation of the product.

The financial details that a complete business plan should contain are:

• Current financial data: describe the company’s recent financial results. They must be fully transparent, as investors and creditors want to have a complete picture of the company.
• Projected Financial Statements: Estimates future sales, expenses, and cash flow. This detail is vital especially for a new company that does not yet have income to show.
• loan requirements: A detailed description of the current financing needed and future loan requirements. You have to explain why you need a certain amount of capital based on your financial projections.
• spending plans: an explanation of how you will spend the funds. Investors and lenders will evaluate if you have a good spending plan that can generate profitability and a high probability of repayment.
• Loan Payment Plans: Describe your payment plans for current and future loans.

9 steps to develop a standard business plan

Each company may take a different approach to the structure of the standard business plan, but the following points must be adhered to.

1. Make an executive summary

It is the first thing that appears after the cover and should contain all the essential information of the business plan in one or two pages.

Writing a good executive summary is essential, as it is often the part that can define the success or failure of an opportunity. Investors and executives review the executive summary to decide whether to delve into the business plan or simply leave it aside.

An executive summary should include the following information.

Company Overview

The first topic of interest is the product or service that your company is going to offer. Explain your products concisely and if you are going to manufacture them or subcontract suppliers.

If you are going to offer services, describe how they can improve people’s quality of life and what the size of the market is.

Market opportunity and competition

In this section, summarize the market analysis for your business.

Write who your target market is: be specific. For example, if you sell bread, explain in which area or to which economic group you are going to sell it, as this will influence your prices and promotion costs.

It is also advisable to cover the volume of the market, in depth, as it will outline the potential for sales volume.

After explaining your target market, identify the problems that exist in that segment and how your products and services can solve them.

Look for competition in the market. If other companies target the same segment as yours, explain the key differences that make you stand out from the rest.

Financial projections

With financial projections, it’s all about briefly explaining your sources of income and your pricing structure. Plus, it displays forecasted sales, expense, and revenue figures to give you an overview of your projected financial performance.

You can also mention the capital needed and how you are going to finance the business. If you’re looking for outside funding, this is the time to explain how much funding you need and how you plan to pay it back in the future, whether in the form of company stock or money.

Milestones and growth projections

The last element of an executive summary is your vision for the future once the company grows. If the business plan is for an ongoing business, show the milestones that the business has already achieved.

The projection of future growth includes the opening of new branches, the acquisition of a certain number of new clients, etc. A small business owner can use this to track the growth of their business.

2. Create a company description

The purpose of the company can be defined by the vision and mission statement. A vision statement should contain your ambition for the company: what you want the company to be. On the other hand, the mission reflects the actions that will be carried out to achieve that goal.

These statements are useful for all members of the company to act in accordance with the same purpose. They also play a critical role in strategic planning as they will shape the strategy to achieve the purpose of the company.

The next step is to build the objectives of the company. It is a set of achievements that you want to achieve in a certain period of time. You can set goals for the company as a whole or break them down into departments, such as marketing, finance, or operations goals.

When developing a business objective, use the framework SMART to help you record your progress:

• Specific: Refine each goal to make planning more precise.
• measurable: Define the metrics that will determine your progress and achievements.
• Reachable: The objective must be achievable, based on facts and figures.
• Relevant: Each objective must be aligned with the vision and mission of the company.
• Temporary: indicates the period of time in which you want to achieve the objective.

For example, a consulting firm that is just starting out might set a goal of acquire 50 customers in the first quarter of operation. The aspects…