What Is Business Plan and How To Write It? [Template]

What Is a Business Plan?

A business plan is like a map for starting or growing your company. It lays out the essential details of your business and how you plan to succeed.

Simply put, a business plan is a written copy of the business idea, what financial model it will adopt, the product or service, who will be the target audience, their marketing strategies, etc. It is conducive in the initial stages of establishing your enterprise. 

The business plan is essential for the investment process. A detailed plan is crucial to attract stakeholders, venture capitalists, and investors or angel investors to pitch your business idea. In such a case, your business plan becomes your way of convincing them to invest their resources in your plan because it is worth it. 

The core of a good plan tells the story of your business idea – what problem you’re solving and for whom. Are you hoping to start a bakery downtown? Create a new software tool? The plan explains who your potential customers are and why they’ll love what you offer.

It also includes specifics like who’s on your team, what you’re selling or the service you provide, and how you’ll spread the word (marketing). You’ll want to estimate sales projections and costs so folks understand how you’ll make money. This shows profits down the road.

A big part is differentiating from the competition. What makes your approach unique? Why pick you over similar options? The plan convinces potential backers or partners that you’ve thought it through and have a clear path to profits.

Overall, taking time to craft a solid plan is super helpful in the long term. It guides you through launch and growth. Review it yearly to check if your assumptions are still tracked, or if changes are needed. A plan keeps momentum on your side.

Who Is in Charge of Writing a Business Plan?

Starting or developing a business plan isn’t a science or learned through a degree. Some companies develop through trial and error, while others are drafted from head to toe. 

Hence, the answer is No if we are talking about a particular person responsible for writing a business plan. Similarly, there is no need for an extended, lengthy business plan to be written with each plan elaborated. 

Irrespective of all this, there are still some conditions in which a business increases its chances of becoming successful by drafting a business plan. Such conditions are as follows: 

• For tech startups, a business plan can be a medium to gain long-term funding, especially with no trading history.

• When the market is new, untested, or volatile, a business plan can come in handy and serve as a document to fall back upon, mainly to tackle uncertainties and unclarity.

• If you have an excellent business idea and haven’t given it much thought or put it on paper, drafting a business plan can be a good option. Writing a business plan can help you carefully structure and evaluate your thoughts from different angles to spot risks.

How To Write a Business Plan? 

First and foremost, when writing a business plan, you need to identify the problem your business will aim to solve and the purpose your business serves. 

Once that is sorted, you need to consider who you are trying to attract with it, what kind of customers, and why. Following are some additional key points to consider while drafting your business plan: 

• Note how you plan to secure your funding through private investors, bank loans, etc.

• Write about your business history, the concept, and what products or services you are trying to sell.

• Ensure you are transparent with your investors and do not keep any information from them. Do not exaggerate or bluff about your experience and skills. Gaining trust is crucial.

• Explain the details about your product or service in layperson’s terms. Avoid jargon as much as possible to avoid confusing the reader.

• Focus on the business’s strengths, the problem it aims to solve, and the evidence you have to prove the same.

• Understanding the market you are penetrating is crucial, as is conducting competitor analysis, knowing who your competitors are, learning about your competitive advantage, and finding your unique selling proposition (USP).

• Last but not least, ensure your business plan is brief. Instead, keep it as short and precise as possible. Your aim through the business plan is to deliver crucial information so the reader can decide.

It’s quite easier to write a business plan if you consider the given points. However, it’s still not a walk in the park. If you still have trouble drafting your plan, consider hiring a writer—an affordable business plan writer who can help you put the first version of your plan on paper.

What Are the Advantages and Disadvantages of Writing a Business Plan?

If you are still trying to decide whether or not you should dedicate your time to making a business plan, here are a few advantages and disadvantages of a business plan to help you make this decision. 

Advantages of a Business Plan

• A business plan can be your golden document to secure funding for your business. Initially, funding is crucial, especially for tech and SaaS startups.

• The strategic focus of your business is preserved after the first stage. You can read about scope creep and understand how a company occasionally diverges from its goal, which could lead to stagnancy. In such a case, it is essential to understand the success factors in a business and plan exactly to serve the purpose.

• Having a business plan on paper invites other passionate people on board. When you have a trading history, it is easier to get people on board. However, if you have a plan, it convinces potential investors that you are sure about what you are doing. 

Disadvantages of a Business Plan

• A business plan can hamper you from looking forward. This means you may depend too much on your plan without considering other external factors such as market conditions, trends, etc. Such a dependency can lead you to make mistakes and miss potential golden opportunities just because they were not in the plan.

• Analyzing performance can become time-consuming. A business plan can make you dwell on your past mistakes by focusing on the goals and objectives you could not achieve. Analyzing past performance could save time and resources by focusing on moving forward with strength.

• Constant change makes a business plan outdated as soon as it’s written. We know that the world is changing quickly, so your business plan will likely lose its relevance by the time you are ready to launch. A great alternative to the business plan is a strategic project roadmap. This is because a business plan has a lot of essential details, such as the mission statement, which are less likely to change either way. Moreover, a roadmap can help pave the most adaptable and actionable path.

What Is the Skeleton of a Business Plan? 

Since you are still reading, I am sure you’ll want to know what the skeleton of a business plan looks like. 

Remember that it can be frustrating because critical thinking is involved, and there is no hard-fast rule for a business plan. However, the best approach is to look at other business plan templates and write yours in a way that makes sense to any layman. 

Here is what a Business plan constitutes of: 

• Overview: In this section, you summarize your business concept and its execution.

• Detailed Description: In this section, you will describe the kind of product or service you are offering, what the unique selling point is, and how valuable your business is.

• Target audience: In this section, you will explain your market segmentation, the target market, their essential traits, etc., backed up by user research.

• Marketing strategy: Once you know your target audience well, you must document how you will reach them through a marketing strategy. A marketing strategy is often defined within the marketing plan, where primary establishment and engagement strategies are explained in detail. However, as a subsection in a business plan, it need not be as detailed as a market plan.

• Core team: This section will discuss your people and the team behind the development process. If you don’t have a team yet, you must discuss how team members will be selected, what candidates suit you, and the timeline. This section is critical to procure external investments such as passion and enthusiasm.

• Financial Predictions: Remember that investors are mainly concerned about finances because no one wants to invest in a loss-making company. Hence, your financial sedition is going to be scrutinized a lot more than anything else. Therefore, it is crucial to be thorough with the same. Make sure you talk about how much money you need to get started and how you plan to keep the money rolling in. Ensure that your cash flow forecast is realistic and achievable, which will help keep your business floating for the first few years.