Business Plan Template: A Step-by-Step Guide To Writing Your Business Plan

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Introduction

A business plan is a formal document that entrepreneurs use to enlist details about all aspects of the business. It is a very long document and usually needs a lot of hard work and effort. Many people may find it difficult to write a business plan. That’s where a business plan template comes into play.

The business plan template helps entrepreneurs write down a business plan in detail and faster. It contains a layout for a particular type of business and entrepreneurs can modify the template to suit the business and insert information about the business.

Benefits of Using a Business Plan Template

The business plan template provides many benefits to entrepreneurs. The following are some of them:

  • Puts down a basic layout for the entrepreneur to build the business plan on
  • Contains the different section heading
  • Contains instructions on what to write for each section
  • It is easier to write a business plan using a template rather than writing from scratch
  • Helps to finish the business plan to be completed quicker
  • Explains what has to be written under each section so that the entrepreneur does not need to worry about what to write in it
  • Saves time in researching for details to write in it

What Does A Business Plan Template Include?

The aim of the business plan template is to help the entrepreneur write the business plan easier and faster. The business plan template begins with a table of contents that enlists all the main headings and subheadings that need to be written in the business plan.

The following is an example of a table of contents found in the business plan template

  • Executive Summary
    • Opportunity
    • Expectations
  • Opportunity
    • Problem and Solution
    • Target Market
  • Competition
    • Execution
  • Marketing and Sales
    • Operations
    • Milestones and Metrics
  • Company
    • Overview
    • Team
  • Financial Plan
    • Forecast
    • Financing
    • Statements
  • Appendix
    • Profit and Loss Statement
    • Balance Sheet
    • Cash Flow Statement

Followed by the table of contents, the business plan template moves on to talk about each of the headings in detail. The template contains instructions on what to write under each heading. Some templates also contain questions to ask yourself in order to find the answer that has to be written under each heading.

Essential Components of a Business Plan Template

The business plan template enlists all the key components that need to be contained in a proper business plan. The following are some of the key components of the business:

Executive Summary

The executive summary is often the most important part of a business plan. It is the first section of the business plan and gives a summary of the contents of the entire business plan. Most investors and busy people who do not have a lot of time to read the entire business plan focus on only reading the executive summary.

Hence the executive summary has to be written concisely showcasing all the necessary details precisely in order to attract investors. A poorly written executive summary may lead to the rejection of the business plan even if the business idea may be great

Industry Overview

The Industry Overview section of the business plan deals with detailing the current scenarios of the industry to which the business belongs. This helps the readers and investors know about the trends in the market, the places where the business may have a demand and if the business will be profitable.

The key statistic provided in this section must be backed up by real data-based evidence that will help investors to make the right decision on investing in the business.

Market Analysis

Performing market analysis is one of the most important functions that a business must do. Conducting market analysis helps the business analyze the target market area, define the target audience, create customer personas and find any problems that the business can solve.

This helps the business create marketing campaigns, products and services that will attract the market audience and increase sales and profit for the business.

Competitive Analysis

All businesses face competition in the industry to which they belong. Performing competitive analysis helps the business analyze the kind of competitors they have in the market, what strategies they use, who their target audience is, etc.

Performing competitive analysis helps the business find its competitive edge over the other businesses that provide similar products and services. The business can also learn from strategies that worked or didn’t work for the competitor and create a strategy for itself based on the study.

S.W.O.T Analysis

Performing a SWOT analysis is one of the most important tasks that a business should do. Conducting a SWOT analysis helps the business analyse its strengths and weaknesses as well as identify any opportunities and threats in the market.

This data will help the business in making use of its strength and the opportunities in the market in order to overcome the weaknesses in the business and the threats in the industry. Without a proper SWOT analysis, a business will suffer greatly and have to navigate through risks without a calculated plan of action.

Management and Organization

People are the main pillars of a business. The people who work and do their job are the ones who help the business achieve its goals and objectives. They also help in fulfilling the vision and mission of the business. Hence management is one of the valuable resources of the business and also one of the most expensive.

Hence the business plan must be careful while enlisting the number of personnel required to do a job, the level of skill or expertise required, their salary, who will be responsible for what job, who will they be accountable to, etc. All this information will help manage the business team and organisation in an effective manner.

Products and Services

The products and services provided by the business are the main elements that are responsible for the success of the business. The products and services selected must be able to solve a specific problem that the target audience faces in the market and also that is unique from other similar businesses.

The business plan must enlist how your product or service is different from other similar products and what benefits the target audience get by choosing your product over the competitors.

Marketing & Sales Strategy

After the product and services of the business, the marketing and sales strategies of a business are very important. These are the strategies that will help the business sell the products and services to the target audience and help the business earn sales and revenue.

A marketing and sales strategy is based on research and backed up by data. Hence the business plan must contain the perfect marketing and sales strategy that will perform multiple marketing activities like creating brand awareness, increasing sales, etc while achieving its marketing goals.

Financial Analysis

The financial analysis section contains instructions on what important information on the business’s finances must be included in the business plan. Some of the important things to be added include financial forecasts. the financial structure of the business projected profit and loss statements, etc

The financial forecast must include key assumptions on financial matters such as projected revenue, how much profit and sales are expected, etc. Other financial statements must include projected monthly revenue, monthly expense,  net profit and loss that the business will face each year.

The financing part of the business plan deals with money matters of the business. How much money is needed to run the business, where the money is going to be sourced from, how the money is going to be used, the type of funding needed, etc?

Projected profit and loss statements, projected balance sheets and projected cash flow statements should also be added to complement the financial details in the business plan.

Limitations of a Business Plan Template

Even though a business plan template helps an entrepreneur in many different ways it has its limitations of its own. The following are some of the limitations that an entrepreneur may face when using a business plan template to write a business plan:

  • Business plan templates are rigid. They may not allow much room for being creative and suitable for the business.
  • Some business plan templates serve as a one size fits all format. In reality, a single business plan template is not suitable for all types of business
  • The focus of a business plan template may be limited. A business plan template is usually created as a vague outline and may not be created with a broader focus in mind.
  • The quality of a business plan created using a business plan template may suffer if the template used is not of good quality

Tips To Write A Business Plan

Now that we have discussed the components of a business plan template and its limitations of it, let us look into some of the tips to write a business plan effectively:

The Entrepreneur Must Know The Purpose Of The Business Plan Before Writing It

A business plan may be created for many purposes. Some of them include attracting investors, acting as a guideline for future goals, educating the employees, etc. Each of these is written in a different way. Hence it is important to know for what purpose the business plan is going to be used even before starting to write the business plan.

Use An Appropriate Language In The Business Plan

A  Business plan is a formal document. Hence the language of the document must be appropriate and format to suit the needs of the business plan. The language must be clear and concise. Jargon and lengthy words must be avoided.

The Business Plan Must Not Include Complex Words

It might be tempting to use complex words that are specific to the industry to which the business belongs. Readers who are experts in the industry may be able to understand the words but an investor or any other reader the business plan is intended for, may not know what the words mean and making the business plan hard to read.

The Business Plan Must Not Be Too Lengthy

The longer the business plan is the less likely it will be effective. Investors and stakeholders usually skim over lengthy business plans and then look into the details of the business. A shorter business plan that just points out precise details is more likely to be read and remembered than a longer one.

The Business Plan Must Be Supported By Appropriate Documents

The appendices consist of a list of documents that support the data and information provided inside the business plan. These documents add more value to the business plan. Some of the documents that can be added include the curriculum vitae of the team members, market research data, customer personas, product demo, financial forecast, sales forecast, etc.

The Business Plan Must Contain Reference Data

The business plan must contain reference data that can help make it better. This includes information on the target market, the competitors in the industry, and the target audience.

The Business Plan Must Be Based On Research

Creating a business plan that is based on guesswork and assumptions is not a good foundation on which to build a business. Most of the information used in such a case is arbitrary and biased. The more research that has been done to write a business plan, the more realistic and reliable the business plan will be

The Research Done For The Business Plan Must Be Objective

It is easy to become biased and unrealistic when conducting research for a business plan. In order to make the business seem attractive and profitable, some entrepreneurs may only consider the positive attributes in the research and discard the negatives or may manipulate the data to suit their needs.

Even though it might seem as though it is helping the business seem unique, such research will only make it look biased to investors and experts who read the document. It will only make the business plan look bad and then make anything good out of it.

The Business Plan Must Highlight The Uniqueness Of The Business

One of the key purposes of a business plan is to attract investors. In order to create a  business plan for such a purpose, the entrepreneur must highlight the business as being unique and different from other businesses in the industry.

The entrepreneur must include points in the business plan showcasing that the business provides products and services that are different from others wherever possible.

The Business Plan Must Be Changed According To The Growth Of The Business

A business is constantly changing and growing in all aspects. Its products, services, goals and even mission may change in the long run. Having a static business plan will not serve the business for the purpose it was created for. Hence the business plan must be constantly reviewed and revised according to the changes in the business.

Bottom Line

A business plan template helps entrepreneurs get the job of writing a proper business plan easier and faster. Though it is quite useful it does have its own drawbacks and limitations. Entrepreneurs must look into all such aspects and select the best business plan template that suits the needs of their business in order to create the best business plan that will present the business as realistic as possible.

This post is also available in: English

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