How To Write A Detailed Business Plan
Every successful business starts out with an inspired idea. Once that idea is transformed into written words, it essentially becomes the seed for a detailed business plan. Sometimes, it’s just a quick note on the back of a napkin, or a quickly typed memo on a phone or computer. A well-executed, detailed business plan, inspired by those notes, becomes the map that helps this newly formed business to navigate the road ahead. It also keeps the business on track towards accomplishing long-term growth goals.
Business Plan Types
That very first scribbled note that you took when the idea for your new business venture struck you, is a great starting point. The next step is to create a more detailed plan, and there are a few options to consider when it comes to the right type of plan for your business::
- Feasibility Business Plan – The basic concept of this plan is to help you work out whether the rewards of a certain business outweigh the risks. First, it will determine whether there is a market for your products or services. Secondly, it looks at the potential for profit over a set period and looks at things like market data and financial projections.
- Start-Up Business Plan – If you’re just starting out, the name says it all – this type of business plan is for a brand new business. It describes your business, the key players, and the intended audience or target market. It also describes your products and services and their potential benefit to the market. Finally, it includes detailed financial projections, market share predictions and more. This type of business plan can also be used to attract investors, secure business loans and other funding.
- Strategic Business Plan – This is basically a foundational plan for your business. It details your goals, and the specific steps that will be taken to achieve them. It includes the business vision, a mission statement, strategies for success, and a schedule for the implementation of each step of the process. It is an excellent companion to your start-up plan.
Detailed Business Plan Format
A textbook version of a business plan includes nine key sections, all of which are needed if you’re using the plan to ask for financial backing. Both traditional lenders and venture capitalists want to see details about every aspect of your business, from the initial set-up to how it will evolve in three, five, or ten years. While all nine sections are typically used, feel free to change their order, and use only the sections that make the most sense to you and your business model.
Your business plan is an important document, so make it look professional, especially if you’re presenting it to an influential decision maker. Place your plan inside a binder and attach a concise, properly formatted cover page to the front so it is clear what the document within is about. Include the following types of information on your cover page:
- Business Name
- Document Title, e.g. ‘Business Plan <year/s>’
- Current Date
- Company Contact Information.
While this is the first section of a detailed business plan, it is best to write this last, as it summarises everything contained within the plan. This is an introduction and overview of your business. Its objective is to entice the reader not only to read the rest of the plan, but also to take interest in the business idea. Ideally, it is two pages or less, concise and well-written. Be sure to include:
- Mission Statement
- Proposed Products/Services
- Leadership Information
- Employee Information (if any)
- Office/Facility Location
- Financial Data (Current & Projected)
- Market Evaluation
- Long-Term Growth Goals.
This section will tell the reader about the vision and direction of your business. Lenders, potential business partners, and other shareholders can then get a more accurate idea of who you are, and where you’re going. It’s also where you talk about what you’ve already accomplished. Provide details about your business such as:
- Legal Business Structure (Sole Trader, Partnership, Company, or Trust)
- Problems that your products or services will solve for the market.
- Describe the consumers, organisations, or other businesses that are your target market.
- Explain your unique competitive advantage that will ensure success. What makes you different from your competitors and why should your potential customers care?
- If you have any company history, tell your story here as well.
You must have a good understanding of your chosen industry from a marketers’ perspective. Is the industry in a growth phase, steady, or in decline? You also need to know as much about your competition as possible so that you can develop your point of difference to them. Competitor research and detailed market research will help you set attainable goals. Here are a few questions to get you started, but you may have several more to add to this list.
- Who is my target customer?
- How big is the market?
- How competitive is it?
- Who are your competitors?
- How are they doing things?
- What is working for them?
- Can you do it better?
- What market share do you predict?
Organisation and Management
Describe how your business will be legally structured, and who will be in charge of running it. This is also where you introduce your organisational chart, detailing everyone who is involved in the business. List any individual team members you have and provide the following information:
- Give each person’s name, qualifications and job title.
- Describe their role and job description.
- Attach each individuals resume/CV for maximum impact.
- Describe how each person’s personal, and professional, experiences will contribute to the success of your business.
Service or Product Description
In this section of your business plan, you want to describe your product, or service, in as much detail as possible. You’re not trying to sell the reader on the product, but rather on the idea that producing the product is a good idea. This isn’t a sales pitch, but it needs to be a bit more than a simple spec sheet full of boring numbers. Tell your product’s story:
- Describe your products/Services.
- How does it compare to competitive products?
- How is it unique?
- Detail the benefits for customers.
- Explain the product lifecycle.
- Describe your ideal pricing model.
- What will costs will be incurred?
- Are you doing ongoing research and development? Explain it in detail.
Marketing and Sales
Even if you have the best idea in the world for a product or service, without marketing it won’t sell. There are many ways to market a business, whether it’s via traditional channels like radio, television and print, or online with Google Ads, Facebook advertising or organic social media. The best marketing strategies begin with research, which you’ve already completed in the previous sections. From there, you can determine where to focus your marketing efforts to get the most return on your advertising dollar investments.
- What are your sales goals and expected annual revenue?
- Who are you targeting and where do they consume advertising materials?
- Describe your ideal marketing channels.
- What forms of marketing materials will you create?
- Will you focus on traditional or digital marketing, or a mix of both?
- How will marketing campaigns be created and managed, in-house or outsourced?
- What is the marketing budget?
- How will you measure results?
- How will you scale your marketing efforts over time?
This might sound like a daunting task, but you’re going to need to come up with a financial plan for the first five years of your business. You’ll use current, and historic industry data, combined with your product pricing, market share predictions and other factors to determine what your revenues and expenses will look like. You may want to include graphs and charts that tell the future of your business from a financial standpoint. Include the following forecasts:
- Income Statements
- Balance Sheets
- Cash Flow Statements
- Operating Budget
- Be realistic about your goals and potential. Don’t estimate too low, or too high.
- For the first year, you might want to break it down into monthly, or quarterly statements as well.
Unless you have an extremely large bank account, and endless lines of credit, you’ll likely need to find capital in one form or another. That means convincing a lending institution, venture capitalist, friends, or relatives to invest in your company. Remember that in the first few years of your business, you’ll need a significant amount of capital. Again, be realistic and understand that there will be times your capital needs increase, while other times they’ll ease off. Include the following in this section:
- Clearly indicate the amount of funding you will need initially to get started.
- Define your financial needs through the next three to five years.
- Explain, in detail, what the funds will be used for such as buying equipment, paying salaries, superannuation, providing working capital, etc.
- Lay out your plan to repay loans within a set time period.
- Describe to an investor how, and when they will get their investment back.
- Refer back to the financial details section of your business plan.
The appendix section of your business plan is where you provide any additional materials and documents that support your overall business plan. In some cases, these are things that will be specifically requested by an investor, or required by a financial institution to consider funding. However, there are a few common items that you should include here.
- Credit histories for financially responsible individuals.
- Resumes and CVs for management and other important players.
- Letters of reference for the business, and individuals.
- Licenses, permits, or patents currently held.
- Contracts and other legal documents.
Don’t let the process of creating a detailed business plan put you off, it’s an achievable, step-by-step process. It all begins with researching your idea to make sure there is a viable market for it, then it’s all about grinding out the small details of how you’ll accomplish your goals. We understand that being a new business owner can be overwhelming, especially if you’re thinking about taking on employees. Salaries, benefits, superannuation obligations and requirements, it’s a lot to take in. If you have any questions at all about super and how to best go about paying this to employees, please contact us.