Writing a business plan can be difficult, but you shouldn’t let the difficulty put you off doing it. A business plan is a detailed road map that can help steer your company to greatness. It can indicate whether or not the financial numbers add up. It can show you where to put your efforts for maximal effect. It can even help you obtain outside funding. Every business needs to know how it is going to get where it wants to go. Not every company needs a 100-page plan, but every company needs some kind of plan. This article will show you how to write a business plan that will take your business where you want it to go.
Part 1: Analysis of the Business Environment
If you are going to understand the risks your business faces and the opportunities it could take advantage of, then you need a good understanding of the environment your business operates in. Your competition must be a major part of this analysis. Start by writing a list of every competitor your business has. This list must include other businesses that sell similar products or services, but it should also include businesses that sell other popular products or services. After all, your potential customers have to decide whether to buy what you offer or some other popular product or service.
Next, do some research on these competitors. Find out how they are run, what their resources are, what their prices are. Write up a description of each of them. The more you understand about the competition, the greater the chance you can learn how to be different enough to stand out from the crowd and outperform it.
Besides your competition, you also need to take a look at your business’ operating environment. You must do the research you need to figure out what factors in your area of operation could affect business performance. Learn how the economy is doing, what consumer confidence is like, where technological development in your industry is going, and anything else that could affect your business. Consider how each factor could positively or negatively affect it.
Part 2: Strategy
Once you know about your business’ operating environment and its competition, it’s time to develop your business strategy.
The first step is to set some objectives you want your business to achieve in the period the business plan covers. Clear objectives make it easier to achieve high performance. These objectives should be specific, measurable, achievable, realistic, and targeted, such as: “By the end of the year we should increase sales of product A by 10%,” or “By the end of the year we will have finished developing product B and gotten it onto the shelves.”
Next, you should outline a strategy for achieving your objectives. This must include a marketing plan and a distribution plan, but it should also include plans for any factors unique to your business or industry.
Part of devising a strategy is allocating the needed resources. These resources could be money, people, manufacturing equipment, vehicles, and whatever else is needed to make the strategy work. Your business plan should include a description of why you believe the resources you are allocating will be adequate to achieve your objectives.
You also need to make some financial projections about what you expect your strategy to deliver. You need to figure out if the period covered by the plan will most likely result in a profit or loss, and how much.
Part 3: Contingencies
Lastly, you need to make plans for various contingencies. If you can make plans for a variety of possibilities before they happen, you will be ready to deal with them if they happen. Ask yourself a series of “What if?” questions such as:
• What if a new competitor appears?
• What if one of our distributors delists one of our products?
• What if there’s a major equipment malfunction?
Once you have figured out some of the likely contingencies, you can develop some ideas for dealing with them.
The Takeaway
A good business plan can guide your company to financial success by giving you a good idea of what you need to do and how you need to do it. Take the time to put some real thought into your plan, and don’t forget to actually use it. It could mean the difference between success and failure for your business.
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