Writing a business plan can be difficult if you don't know what you're doing. Read on and learn how to write a business plan outline here.
In the US, around 20 percent of businesses fail in their first year. By the fifth year, this rate goes up to around 50 percent. With so many pressures and competition in the market, how do you make sure your business does not become one of these statistics?
One way is to create an excellent business plan. Read on as we give our must-know hints and tips for your business plan outline.
1. Write the Executive Summary Last
The executive summary is the key to your business plan. It provides an overview of the whole plan, picking out key points. It needs to be perfect, as it is the part where people are most likely to make snap judgments about your business.
You want to keep everything here as brief as possible. The forthcoming sections will give a chance for you to extrapolate. In this section, you are just picking out the key takeaways from the plan.
Because of this, it helps to write the executive summary after you're written the rest of the document. It should include financial forecasts and target markets, so needs the research from the other sections to complete first. Above all else, it will need a mission statement and a description of the products and services you offer.
If you are seeking funding, this section becomes even more important. Lenders will often look over hundreds of these. In a market where loans for businesses are getting tighter and more competitive, you need to make sure it counts.
2. Know Who You Are Writing For
Before getting right into your business plan, it helps to know who you are writing for. This stops you from writing large sections and investing in research that is not needed. In contrast, it lets you know which areas will need extra care and attention.
Generally, a plan is written for you and helps keep you on track. After this, it may be written for investors, lenders, or board members. You may also find yourself writing for a combination of these.
If the plan is a roadmap for you, then you probably don't need to go in-depth with areas such as competition and market analysis. However, this is something investors and board members will need, so be thorough.
Try to pre-empt the types of questions these groups may have. For example, lenders may want to know how you will pay the money back and over what period of time. By including these in the plan, they will limit the questions they have afterward and the reasons they may have for turning you down.
3. Back Your Market Analysis up With Data
Your section on market analysis is the chance to back your claims up with evidence. In this, you need to know your target market and show that there is a need for your product. You should aim to spend more time on this than writing the business plan itself.
Market analysis should include current risks, growth potential, and the size of the industry. You don't need to go into marketing or financials in depth here, as that will be done later. Instead, look at it as a past, present, and future of your business.
Crucially, you are finding your target market. With so many data tools available to use online, setting this up should not be a problem. You may even create various buyer personas, each with its own income, gender, and purchasing style.
4. Don't Avoid Competitive Analysis
As well as market analysis getting easier, so has spying on your competition. Companies are now much more transparent about how they operate and overt in their marketing tactics. This makes it much simpler to spy on them, see what they are doing right or wrong, and turn it to your advantage.
At this point, many people will tend to back away from an in-depth competitive analysis. It makes sense, as you don't want to tell people you have lots of competitors. However, the people reading your plan will go and find out about it themselves, so this is your time to address the issues.
The first step is to see who your competitors actually are. These may be large, established companies or other small businesses just starting out. Look for places providing the same products or services as you.
Select roughly three of the main competitors. Look at their strengths and write down how you can emulate them. After this, check out their weaknesses and write down what you plan to do so that you can overcome them.
5. Consider Third-Party Marketing
Without marketing, no one will know that your business exists. It becomes even more important if you have numerous competitors, as you have to distinguish yourself from them. For these reasons, your marketing plan should be researched just as intensively as your financials.
Start with the image and brand messaging you are going to put out. Explain how this appears to your demographic, or even better, show it. From here you can discuss marketing assets and a timeline for implementation.
You can really outline your business's unique selling proposition in this section. You may also decide to use a SWOT analysis here.
When you start this section, you may realize that marketing is a business unto its own. It takes a lot of time and research. If you add a comprehensive social media strategy into the mix (which you should) then it becomes a full-time job.
If you don't have the chance to do it yourself, you will need an employee to do it for you. Make sure you factor them into the cost of the business.
You could also consider getting a professional company to do your marketing. It will pay dividends. This shows you understand your strengths and weaknesses and that you actually have trained professionals addressing the important issue.
6. Use a Table of Contents as a Checklist
The table of contents will be your best friend and can be used as a checklist to see you have everything in place. List out all of your sections before you begin, then wait until after and note down the page numbers. If you can assimilate any areas into larger sections to save space, then do so.
7. Sell Your Team
Every business plan has a section on organization and management. This is where you lay out the legal structure of the company and who is actually involved in its creation. This can be extremely important.
If you have prior experience, then make sure you sell it. If someone has run a successful company before, it shows they have experience. You should also address any areas that people have experience in that may be useful.
8. Create an Appendix
Including any official documents will help your business plan move through official channels more smoothly. If things such as planning permission, licenses, registries, and patents are dealt with in advance, it adds more gravitas to your document.
Putting them in the body of the plan can bloat it and slow down the flow. Instead, you should create an appendix at the end to include official documents.
9. Get It Checked by Other Business Owners
It helps to get your plan checked over by others who have to tread the same ground. You may find they spot things you have neglected, or can give you better ideas from the point of view of others.
In some instances, they may even let you look through the business plan examples they have done. Check the table of contents and see if you have the same parts or other ones that are relevant. See how they have organized the plan and if it is something that would work for you.
If you can't find anyone to help out, then check online. There are numerous business plan templates for you to use, often with helpful advice. You do not need to put anything new or different, but take cues from what has worked for others in the past.
10. Finishing the Plan
Once your plan is complete, there are a number of things you can do to enhance its professional appeal. The first is to double-check everything. Start by looking over typos and grammar errors, then do the whole thing again.
Keep in mind that with a business plan, the briefer the better. If you can edit it down, it has more chance of being looked over. No plan should be less than 10 pages or exceed 20.
After this, recheck your financials. It is very easy to get a calculation wrong or misplace something. This prevents you from being put on the spot when discussing the plan.
Finally, spend a little money on professional printing. Get bookbinding done, and have someone lay it out professionally.
Business Plan Outline
Now you know the tips for creating a great business plan outline, get working. Remember that a business plan is also a fluid entity and not set in stone. If something needs to change, it can, but it should be included in your plans.
For help growing and scaling your business, then Strategy X should be your first stop. We visualize your whole plan onto one page, making it easier to access and navigate. Click here to contact us and book a demo to see what we can do for you.