If you are an entrepreneur dreaming about starting your own business, you have probably head about the importance of a Business plan. It is very easy to think that we have a great idea for a business, but the best way to find out whether your idea is feasible is to create a business plan.
A solid, well-researched business plan provides a practical overview of your vision. It can be used to ground your ideas into workable actions and to help pitch your idea to financial institutions or potential investors when looking for funding.
Writing a business plan for the first time or from scratch can be perceived as a difficult task but with the right tools and guidance you will find that it is not that hard.
The standard business plan consists of a single document divided into several sections for distinct elements, such as a description of the organization, market research, competitive analysis, sales strategies, capital, labor requirements, and financial data.
Writing a business plan for a startup does not have to be a 50 page task. You will find that there are not few investors who want to see a short, precise and to the point business plan that won’t take too long for them to read and understand.
Some entrepreneurs find business planing challenging and because of it, there are many people who starts writing the plan but soon forget about it.
🙋♀️ Note: An entrepreneur with a business plan is more likely to secure financing and grow their business compared with those who do not have a plan
At faicliq we wanted to create a tool that could support entrepreneurs in this task. With our business guide you will have the sense of progress that sometimes you miss when working on templates. Also, you won’t miss any important part of the plan because we will guide you though the entire process.
Here are the main sections you should take into consideration when building a business plan:
⭐ One-pager: instead of jumping right into a full business plan, it may be better to start with a
. It’s a faster and easier method that can be completed in under an hour and is simple enough to review and revise on a regular basis.
✒️Concept design:
Idea: in this section your will need to answer two main questions.
What problem are your company solving? or why did you choose this idea?
What is the solution you provide to the problem? or what makes your business idea great
Product: in this section you will define the unique value proposition for your startup. Also, you will provide details about your product and service that you are offering. A unique value proposition is a clear and concise statement of what a business does and how it is distinguish from the competition. Explained simply, it should be clear enough to tell customers and potential investors why they should do business with you instead of your competitors. What value can you bring that no one else can? It is crucial for one simple reason: You need to stand out and be unique.
Promotion: this section aims to help you define the ways you can promote your products and services
Distribution: in this block you will describe all the sales and distribution methods you will use.
Partners: this is essentially a stakeholder analysis where you should identify with who you should collaborate to make a business a success.
Management team: in this section you will write about the founders team or any key employee you have in the company.
🕵️♀️Market Research:
Market: it is easy and tempting to think that everyone can use your product, but that would be a mistake. Specially in the beginning, try to understand who will be the ideal customer for your product. Once you got identify your target consumer, market your business effectively to them and get them to love it, so you can expand to other type of consumers. You can identify potential customers in three ways:
Demographics: age, sex, income, education level, marital and parental status, and many other measurable attributes.
Psychographics: people attributes that can not be measured precisely but still important. For example: desires, wants, hopes, emotions, fears, interests, etc
Geolocation: Some business draw clients from local areas and some globally.
Customers: understanding your consumer makes it easier and cheaper to reach them in large volume with targeted marketing. It also makes it easier to create a product that better satisfies their needs. In this section you will analyze and define your buying persona in detail. Determining the market potential of a product is part of a successful marketing process and requires marketing research. You'll need to examine at least three factors that will determine whether the market potential of your product is worth the investment. You need to analyze your potential customer base, analyze your competition and analyze the current environmental conditions that may affect market potential.
Competitors: in this section you will describe your competitors. This part is very important since the competition would determine on the market potential. More would be the number of competitors, less would be the share the new organization would be able to take.
Swot analysis: a good business plan includes a SWOT analysis to determine the strengths, weaknesses, opportunities and threats of a company. It is an effective business tool that is used to strategize for short-term and long-term decisions.
Market potential: is the entire size of the market for a product at a specific time. It represents the upper limits of the market for a product. Market potential is usually measured either by sales value or sales volume. Keep in mind that market potential is just a snapshot in time. It's a fluid number that changes with the economic environment.
Financing: this section will help you listing the financial sources for launching the project. For example: savings, loans, investment, etc
Staff and payroll: very often, you will find that launching a business requires manpower to manage different areas of the organization. In this section you will add and calculate the expenses related with the employees of the company
Revenues stream: in this section you must outline how and when you will generate revenue. To classify revenues at a high level, there are operating revenues and non-operating revenues. Operating revenues describe the amount earned from the company’s core business operations. Sales of goods or services are examples of operating revenues. Non-operating revenues refer to the money earned from a business’s side activities. Examples include interest revenue and dividend revenue. Some of the most common revenue streams are:
Transaction-based revenue: usually one-time customer payments.
Service revenue: generated by providing service to customers and are calculated based on time. For example, the number of hours of consulting services provided.
Project revenue: earned through one-time projects with existing or new customers.
Recurring revenue: it is the model most commonly used by businesses because it is predictable and it assures the company’s source of revenue as ongoing. Possible recurring revenue streams include:
Subscription
Renting, leasing
Licensing content to third parties
Advertising fees.
Direct cost: the direct cost are calculated taking into consideration the revenues stream. It can be a fix amount or a percentage of the income.
Marketing budget: defining how you will reach your potential customer is really important for your business plan, since it will help you to understand how feasible is the plan.
Other cost: in this section you will add any expenses that your business might have during a certain period of time. For example, office rent, legal advise, software, etc.
: the cash-flow projection shows your monthly anticipated cash revenues and disbursements for expenses. To be considered a good credit risk, it is important to demonstrate that you can manage your cash flow.
: the balance sheet is a snapshot summary of the assets, liabilities, and equity of your business at a particular point in time. For a startup, this would be on the day the business opens
How to write a business plan
