If you are serious about attracting investors or getting a business loan, then you need a plan. Whoever said you don’t need a formal business plan to start or expand your business was certainly not addressing those who need funds from creditors and investors. That is why i wrote this guide for three set of individuals:
- Entrepreneurs who are just starting out in business and want to write their own business plan
- Established business owners who want to expand their businesses and need a business plan
- Those seeking funds (grants, loans or equity) to finance their business project
Our Most Popular Sample Business Plans & Templates
You don’t just write a business plan anyhow, there are laid down steps to follow so that your business plan will have a professional look and flow. This article will teach how to structure your business plan.
The Beginner’s Guide to Writing a Business Plan to Attract Investors or Get Loans
Table of Content
- 1. Cover Letter
- 2. Title Page
- 3. Executive Summary
- 4. Your Company’s Profile
- 5. Your Industry Analysis
- 6. Marketing Plan
- 7. Operations Plan
- 8: Business Growth Strategy
- 9. Financial Plan and Projections
- 10. Business Exit Strategy
- 11. How to Present a Business Plan with PowerPoint
- 7 Success Keys to Planning a Business That Wins
1. Cover Letter
The cover letter serves the same purpose as it does when you submit one along with a resume as a job candidate; it introduces your business plan to the reader. Because your goal is to market your idea to prospective investors, creditors, partners, employees, and other stakeholders, all the parts of your plan must appeal to the reader. Here are the elements that you need to include in the cover letter:
- Address of recipient
- Your address
- Salutation (you must include a specific name as in, “Dear Mr James.”)
- Body (state clearly that you are submitting a business plan for your business, which you can describe in one sentence; state clearly that you are seeking financial support for your business idea. Tell the reader what to expect in the following pages, and express your eagerness to hear back from them. Don’t forget to add your contact details)
2. Title Page
Remember, you will never get a second chance to make a first impression. So, you certainly don’t want to overdo this aspect. Since nobody will blame you for simplicity, stick with that option; which means you should avoid bright or contrasting colors and unnecessary fancy borders. The following are what to include on your title page:
- Your business logo (if you have one)
- The name of your business
- Founder’s name
- The words “Business Plan”
- A Business plan executive summary is the most important section of a business plan because it is the first thing an investor sees. This chapter will reveal you the basic necessities and data that must make up your business plan executive summary.
- This chapter covers everything you need to know about writing your bio, your business team’s profile, business goals and objectives, core values, mission and vision statement.
- This chapter covers everything you need to know about competition analysis, market size and target audience, market forces and trends, environment analysis and risk assessment.
- This chapter discusses practical steps on how to devise your marketing strategy, identify your customers demography and psychography, draw your advertising and promotional plan, your sales distribution plan, etc.
- This chapter teaches how to prepare an operations plan and also describe your production process. You will also learn how to conduct a manpower analysis.
- In this chapter, you will learn how to devise your short and long term business growth strategy. This is important because investors want to know your long term expansion plans and where your company will be in the next five to ten years.
- In this section, you will learn the basic documents that make up a financial statement. You will also learn how to prepare a financial plan, estimate your sales projections, estimate your expenses and arrange them in a spreadsheet.
- You are not going to die with your business; neither are your investors. This is why you need to prepare an exit plan not just for yourself but also for your investors.
- Most people intertwine a business plan with a feasibility study report, but they are definitely not the same. This chapter will help you understand the difference between the two and their specific role in the business planning process.
- Is a strategic plan the same with a business plan? The answer is YES and NO; depending on the perspective you are looking at it. This chapter will highlight the differences.
Chapter C: The Basic Components of a Business Plan
- In this chapter, you will learn the fundamental factors that make up a business plan. Without these factors, your business plan will not achieve its purpose.
- This chapter teaches you in detail how to get in the right mindset, prepare your business plan cover letter, write your title page and table of content. You will also learn about the various tools you need to write faster and accurately.
7 Success Keys to Planning a Business That Wins
Many people only dream of building a business empire; others dare the consequences and take the leap into the business world. Statistics reveals that 90% of all businesses started fail in their first five years. Of these failed businesses, 80% were failures right from day one. They fail even before launching because the business was poorly planned. This reminds me of a quote from my mentor:
“A successful business is created before there is a business.” – Rich Dad
For your business to be successful, it has to be strategically planned correctly from the very scratch. It’s just like building a house; you must first plan the structural design before ever embarking on laying the foundation. The same is applicable to starting a business. Below are seven steps to planning a business that wins:
I. Plan a business that can grow with or without you
The first step to planning a business that wins is to make sure the business is modeled to grow with or without you. This is actually where most new entrepreneurs miss it; they build a business around themselves. They start a business to run it themselves; they cherish the idea of being your own boss and doing things their own way.
But building a business with you as the sole proprietor is a poorly planned business and it will not stand the test of time. The point i am trying to emphasize is this; you must design a business that will not lean solely on your shoulders.
II. Create a business that will be driven by your vision
The next step is to plan a business that will be driven by your visions and aspirations. Today, i see businesses without future plans and visions. In the process of designing your business, you must set target milestones to achieve. You must set five year and ten year goals for your business.
But formulating a vision for your business is not as important as making sure that this business of yours is driven by the vision. Your employees, team and the entire system of your business must share in the pursuit of your visions.
III. Create a business that will be bounded by your core values
The third step is to design a business that will be bounded by your core values. Your core belief and values must be instilled on your business. I will drive home my point with the following examples; Sam Walton believed in taking care of his employees and he made it his company’s core value. That’s why Wal-Mart implements a profit sharing plan with its employees.
Debbi Fields, during her early start up years was reputed to dispose over $500 worth of cookies because of its poor quality. Debbi has a reputation for insistence on quality even if it means a reduction in profit margin. Quality was her core value and that’s why her company’s motto goes: “Good enough never is.”
Now that’s for Debbi Fields and Sam Walton, what about you? Is your company bounded by your core belief and values? If yes, then make sure it is included in your business plan.
IV. Plan a business that will constantly increase its customer’s value
Customers are insatiable and their wants are endless. So it’s up to you to design your business in such a way that it will always on increase its customer’s value. Your business must continuously strive to give the customers the best of service. Take a look at Apple Computers; they have grown an army of loyal customers because of their ability to satisfy their customers by constantly offering them technological innovation.
V. Create a business that will be led by a strong team
Another important key to business success is to plan your business to be powered by a strong team. One entrepreneurial rule of thumb is this; you must hire people smarter than you. If you are the smartest on your team, your business is doomed.
Just take a look at how Microsoft Corporation has been driven forward by their management and team of computer wizards. If you take the pain to build a formidable business team, then your business will undergo positive leaps.
VI. Plan a business that will be a good corporate citizen
Most entrepreneurs don’t put into consideration their corporate social responsibility when designing their business. But every good and successful entrepreneur put into consideration his society when designing his or her business. As an entrepreneur, you must factor in your community in your business plan and also figure out how your business will positively impact on the surrounding environment.
For instance; if you intend starting a mining business or any business that occasionally results to environmental degradation, then you must plan that business to also give back to the environment as a mark of being a good corporate citizen.
VII. Create a business that will help you achieve your primary aim
Be you an employee, entrepreneur, student or unemployed; we all have personal aspirations and goals. Just as our goals are different; so also are our paths to achieving them different. As an entrepreneur, you have to design your business to fall in line with your primary aim. You must factor in a way to use your business as a leverage to achieve some or all of your primary aim.
No matter what your primary aim is; you must find a way to leverage your business in pursuing that aim of yours. So when designing a business, make sure your personal aims and objectives are also considered.
In conclusion, i believe i have been able to pass an entrepreneurial lesson across. Always bear in mind that properly designing a business before starting it will reduce the likelihood of failure. As a final note, i leave you with this quote:
“A successful business is created before there is a business.“ – Rich Dad