Did you know that over 140,000 female-led businesses were incorporated in 2021, with this number growing, year on year? Starting a business can be an exciting journey, full of potential and possibilities. You want your business to be the vehicle that allows you to work in the way you want to. To be the thing that enables you to show your true strengths, ideas and perspectives to the world. But we want to start out on that journey with confidence. We want to be reassured that any investments we need to make, will pay off. We want to make our businesses work. And to do that, and to give ourselves those reassurances, we need to know how to write a business plan.
Why? Because success often begins with a well-crafted business plan. Your plan not only acts as a roadmap for your business and where it is going, but also helps you secure funding, set clear goals, and navigate potential challenges. In this guide, I’ll take you through the essential steps needed when it comes to how to write a business plan that will take you where you want to go.
How to write a business plan: 9 steps to success
Every business plan is different. Just like every business, and its owner, is different. Uses of business plans can also be very different, and you can read more about those here. That said, the approach to how to write a business plan comprises 9 key steps:
Step 1: Define Your Business Concept
The first step is to define exactly what your business ‘is’, who it’s for, why you want to develop it, and why your idea is (or is going to be) special. So ask yourself:
- Why do you want to run your business?
- What problem does your business solve?
- What products or services will you offer?
- Who is your target audience?
- What makes your business unique?
By answering these questions, you’ll lay the foundation for your business plan and gain a clear understanding of your vision.
Step 2: Market Research and Analysis
Business success is rooted in your customers and what they want and need from you. Therefore, the second crucial step in how to write a business plan is to really understand your market thoroughly. There are lots of ways to achieve this, but regardless of the approach you choose, conduct extensive research to:
- Identify your competitors and their strengths and weaknesses.
- Analyse market trends and demand for your products or services.
- Define your target market and their preferences.
- Determine the size and growth potential of your market.
This information will help you make informed decisions and develop strategies that set you apart.
Step 3: Create a Comprehensive Business Description
Step 3 is all about pinning down exactly what your business is and what it’s all about. You should aim to provide a detailed overview of your business, including:
- explaining your mission and vision.
- describing your business’s legal structure (e.g., sole trader; limited company)
- sharing your business’s history, if applicable.
- outlining your short-term and long-term (up to 5 years) goals.
The objective here is to paint a clear picture of what your business stands for and where you want it to go.
Step 4: Develop a Solid Marketing Plan
Your marketing plan is essential for attracting customers and growing your business. Outline your strategies for:
- Building a brand identity.
- Promoting your products or services.
- Reaching your target audience, and identifying what they want to hear from you, and how you will communicate with them.
- Pricing your products or services competitively.
This part of how to write a business plan is all about looking outside to your potential customers. As such, a well-thought-out marketing plan will also help you reach your goals effectively.
Step 5: Financial Projections
This is the part where many aspiring entrepreneurs start to feel a little uncomfortable! But you need to trust me when I say that this step is an absolutely fundamental part of how to write a business plan. Because if you don’t have control of your numbers, how will you possibly know how likely your business is to succeed? Investors and lenders will also want to see your financial projections to assess your business’s potential profitability. Some things to include are:
- A personal survival budget – if you do start your business, how will you make sure your bills are still paid?
- Income statements.
- Cash flow projections.
- Balance sheets.
- Break-even analysis.
Be realistic and conservative in your financial projections to build trust, but make sure you throw in a good (but justified) dose of ambition too!
Step 6: Operations and Management Plan
This is where you detail how your business will operate on a day-to-day basis, including taking time to think about how it will work around your life as a whole:
- Describe your/your team’s qualifications and roles.
- Explain your supply chain and distribution methods if appropriate.
- Outline your production processes, if applicable.
- Identify your location and any necessary facilities or equipment that you might need.
- Think about how and when you will work, and how this will fit around any other commitments that you have.
This section helps demonstrate that you have a clear plan for running your business efficiently.
Step 7: Funding and Financing
This step is about how you are going to fund your business, both in terms of start-up costs and in the longer term. If you need external funding, this step is also the place to explain how much you need and how you plan to use it. Potential options include:
- Personal savings.
- Loans
- Angel investors or venture capital.
- Crowdfunding.
Make sure you clearly articulate how you’ll allocate funds to different aspects of your business, so that you know what budget you have for different things.
Step 8: Appendices
This stage can be as short or as long as you like, but it’s the place to store any documents, data or information that is unique to your business. Examples include:
- CVs of key team members.
- Market research data.
- Legal documents (licences, insurance, permits, contracts).
- Product/service photos or prototypes.
These documents can be referenced in your plan as appropriate and serve as evidence of your preparedness to external audiences.
Step 9: Review, Revise and Revisit
Step 9 of how to write a business plan is one that’s often forgotten. This is the one that causes business plans to be written, but left on the shelf to gather dust, never to be looked at again! Once you’ve drafted your business plan, it’s so important take time to review and revise it. Seek feedback from mentors, advisors, or fellow entrepreneurs. Ensure it is error-free, concise, and well-organised.
Then revisit it. And do so regularly. Your business plan is your map to where you want to be, and without one, you might as well put on a blindfold and hope for the best!
Conclusion
It may not seem it, but writing a business plan is a crucial step in turning your entrepreneurial dreams into reality. It’s the document which, alongside your personal strengths and determination, can set you on a path to success. Following these steps to create a comprehensive business plan will not only guide your own journey and your own decision-making, but it will also inspire confidence in potential stakeholders, investors and partners. Remember too, that your business plan is not static. It should evolve as your business grows and changes, so keep it at the forefront of everything you do. Your business will thank you for it!