How to Create a Business Plan for Npower NEXIT

 

How to Create a Business Plan

Starting a business is an exciting, yet often overwhelming undertaking. 

After the initial exuberance of having that brilliant business idea pop into your head, your next question is likely to be: Now what? 

Developing a business plan is the best next step. Business plans give your company direction and enable you to apply for loans and approach investors. 

Getting a business off the ground is a challenge, but learning how to create a business plan isn’t. 

Here, we give you the scoop on what a business plan is, why you need it, and how to create one.

What is a Business Plan?

A business plan is an overview of the business idea, as well as a strategy for building and running it. It’s a formal, written document that answers important questions about your company. 

A business plan includes your business’s:

• Overview and objectives
• Company description
• Products and services 
• Employment opportunities
• Marketing plan
• Competitive analysis
• Funding needs
• Operational guidelines 
• Structure 
• Appendices

Why Do You Need a Business Plan?

A business plan serves both internal and external stakeholders, and is crucial to developing your budding company in multiple ways. 

A business plan can help with:

• Guidance: A business plan can act as a roadmap, helping you and your team stay focused on your goals.
• Loans: Most banks need to review your business plan before they can approve a small business loan. Your business plan shows the loan officer you’re serious about your new venture and that you’ve considered the challenges and risks involved.
• Lease: Similarly, a landlord may ask to see your business plan before confirming a rental agreement. Commercial leases are typically for three to five years, and landlords want tenants they believe will be in business for at least that long.
• Investors: If you want to bring investors into your venture, you’ll need to prove the viability of your company. A well-developed business plan shows that you’ve done research on the market, your competition, and how to succeed.
• Partners: Looking for a co-founder? In the same way a good business plan will help you draw in investors, it can also help to attract potential partners.

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Generating a business plan involves putting your ideas and research into writing. 

Here’s how to create a business plan in three simple steps:

1. Come up With a Business Idea

In order to write a business plan, you need a winning business idea. If you’re an aspiring entrepreneur still looking for an idea, start paying attention to common problems you and the people around you encounter. 

For example, you might notice your newlywed friends complaining about how hard it is to find a photographer who doesn’t take cheesy engagement photos. This problem could inspire you to start your own photography business. 

Or, if your friends want to buy a home, but hate the idea of maintaining a yard, perhaps you could launch a landscaping service. 

While you’re brainstorming, remember — successful businesses solve problems. 

2. Do Your Research: The Elements of a Business Plan

Once you have a business idea you’re excited about, start conducting research to flesh out your business plan. Use your business plan to answer the questions others will have about your business and how it will be successful. 

Then, organize your research into the following categories: 

Executive Summary

This section serves as a quick preview of what will follow, much like the opening paragraph of an essay. 

Use the executive summary to quickly explain:

• What is your company’s mission?
• What are your products or services?
• What is your company’s story? 
• What are your plans for growth?

Here’s an example of an executive summary for a photography business:

Beautiful Memories’ mission is to immortalize our clients’ wedding days by offering photography services for engagements, rehearsal dinners, wedding days, and other nuptial events. Kendra Smith started Beautiful Memories after struggling to find full service wedding photographers in the Louisville area. We plan on growing the business by expanding to new markets and adding photographers to the team.

While the executive summary appears at the beginning of a business plan, it’s easier to write it last. 

Company Overview

Think of the company overview as an elevator pitch. 

This is another opportunity to succinctly answer key questions that will be elaborated on later, such as: 

• What will the business do? 
• What problems will it solve?
• Who is your ideal customer?
• How are you different from the competition?

Products and Services 

Use this section to expand on your business model, answering questions such as:

• What will the company sell? 
• How will the company make money off of those products or services? 
• What is your pricing model? Be specific.
• How does your pricing compare to what your competitors charge?

Market Opportunity

Those reading your business plan need to know why your business will be successful. Do the necessary market research to identify your company’s viability here. 

Answer questions such as:

• What is the size of your target market? 
• Who is your ideal customer? 
• What’s your potential for revenue? 
• Who is your competition? 
• How will you set yourself apart? 

Marketing Plan 

Here is where you need to explain how you’ll reach your customers. Don’t forget to include digital marketing tools like a website, a social media presence, and an email marketing strategy.

Answer questions such as:

• How will you sell your products or services?
  • Will you sell directly to consumers or to business?
  • Will your products be sold individually or wholesale?
  • If you choose a third party reseller, what kinds of retail outlets will you target?
• What kind of advertising efforts will you focus on?

Operational Plan

Parse out company logistics in this section. Detail as much as you can about how you intend to run your business. 

Answer questions such as:

• How will products be manufactured? 
• Where will your offices/retail locations be? 
• What kind of a staff do you need? 
• How do you plan to expand the business over time?

Finances

Investors and loan officers will be particularly interested in the financial section of your business plan. Be thorough in your research and planning.

Answer questions such as:

• What investments do you already have?
• How much more funding do you need? 
• What are your current account balances? 
• What is your sales forecast?

Once you’ve thoroughly answered the most important questions about your proposed business, you’ve essentially created a business plan. All that’s left is to polish it.

3. Apply the Finishing Touches to Your Business Plan

After you’ve written your business plan, go over it with a fine toothed comb. Typos and grammatical errors will make you and your potential business seem unprofessional. It’s a good idea to give it to a friend who can look at it with fresh eyes.

You should also eliminate any extraneous or redundant content. Investors and lenders don’t want to read a book about your business. Be respectful of their time and present them with a business plan that is concise and clear.

Developing a business plan is the first step on the exciting road to entrepreneurship. When you learn how to create a business plan, you unlock the power to secure investments, loans, and leases for your company. You also build an internal roadmap to success for your business.