Whether you are starting your first business or your business is seeking funding, a business plan is essential to charting your path to success.
A well-written and documented business plan can serve as a roadmap that outlines your plan to sell and market your products and services, earn profits, and grow over a three to five year period. Your plan can also help position your business within the industry and set you apart from your competitors.
1. Ask these questions
To put yourself in the right frame of mind and gather the details needed to write an effective business plan, ask yourself the following questions:
- Why do I want to start this business? What is my reasoning or inspiration?
- How does my business stand out from the competition?
- What is my unique value proposition?
- Who are my target customers? How can I reach them?
- Who is already part of my management team? What gaps do I need to fill?
- How can my business generate profits? How long will it take to break even?
Knowing the answers to these questions will help guide the structure and pace of your business plan.
2. Research before writing
Your business plan should be a well-researched, actionable document that you can come back to again and again. To get the information you need, use the following tactics when writing a business plan:
- Do a SWOT analysis. Consider your business strengths, weaknesses, opportunities and threats. This type of analysis allows you to identify what sets your business apart and plan for potential risks.
- Perform due diligence. If you’re considering buying an existing business, be sure to educate yourself about finances, sales, inventory, and other aspects of the business to make sure it’s a wise investment.
- Use Porter’s five forces. This analytical approach is a framework for analyzing your company’s competitive environment.
3. Think about your audience
Ask yourself who will read my business plan and what type of information does it need? For example, if you are looking for funding, you need to include a lot of financial data and forecasts. If you are looking to attract new business partners, you should include a detailed section where you explain how the company intends to support growth over the next three to five years.
If you want to share your business plan with different types of stakeholders, consider writing multiple versions. This will allow you to ensure that each reader has the correct and targeted information about your business.
4. Include market analysis
Writing and researching a business plan gives you the opportunity to learn about your industry, market, competitors, audience, local government, suppliers, sales channels and more. It also allows you to assess the risks related to your market or your supply chain.
To perform this research, you can start by looking for online data related to your industry and target audience. It’s a good idea to include data recent enough to still be relevant and from a credible source.
With a little patience, the information you need can be found online for free. There are also services that provide custom data for a fee – which can be a good option for business owners without the luxury of time.
5. Make realistic projections
When writing a business plan, you are naturally going to be enthusiastic, and it can seem easy to think positively and overestimate your business performance. Optimism can cause you future distress when investors or business partners expect more than your company is able to provide.
It’s always better to aim low and blow your projections out of the water than to do the opposite. Make your business plan as realistic as possible. When including accounting data, carefully consider the market, your competitors, and the demand for your products.
6. Share your vision
Although financial projections, product descriptions and dashboards form the basis of most business plans, including a vision statement can help you personalize your goals and relate to your mission. initial.
In this section, briefly discuss why you started the business, share any underlying motivations, and make assumptions about how your business can contribute to a larger cause.
7. Stay concise
When writing your business plan, it’s tempting to include all the details about your business. Before you know it, your market analysis alone could be 10 pages long. If your business plan becomes too large, it may become less actionable or your readers may not take the time to read and understand it.
Be sure to present only the essential data when writing your business plan. Be sure to include the standard sections mentioned above.
A good suggestion is to submit a page or two for each section along with financial statements or resumes. If you have additional research or notes that don’t fit your plan perfectly, keep them in a file for your internal use.
8. Include a visual element
Most business plans tend to be text-heavy, but that doesn’t mean you can’t make yours visually appealing to the reader. Include relevant graphs, images, charts and diagrams.
9. Keep the style simple
Focus on presenting your information and storytelling in a clear way that doesn’t require additional context to be understood. Keep formatting as simple as possible. Use a classic serif font like Times New Roman to maintain readability. The last thing you want is for investors to focus more on your policy choice than your financial projections.
A business plan can help you review your idea and set achievable goals. Once you’ve worked out the details, an investment banker can guide you through important next steps such as setting up a business checking account.
For Informational/Educational Purposes Only: The opinions expressed in this article may differ from those of other JPMorgan Chase & Co employees and departments. The opinions and strategies described may not be appropriate for everyone and may not are not intended to constitute specific advice/recommendations for any individual. . The information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. You should carefully consider your needs and goals before making any decisions and consult with the appropriate professional(s). Prospects and past performance are not indicative of future results.
You should carefully consider your needs and goals before making any decisions and consult with the appropriate professional(s).
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