Updated: August 12, 2021
As an entrepreneur, one of the basic things you have to learn is how to write a business plan. This is a very important task which you need to do especially if you’re thinking of putting up a new business.
In a simple sense, a business plan serves as your road map that will guide your business to success.
The Philippine Department of Trade and Industry defines a business plan as a written outline that evaluates all aspects of the economic viability of your business, including a description and analysis of your prospects.
Thus, writing a business plan is really an essential step for any prudent entrepreneur to take, regardless of the size of the business.
Having a business plan lowers your financial risk. It happened several times in my life already when I had to forego or delay a particular venture because the business plan showed that my current resources were not enough to make it successful.
In a way, I was able to save money, time and energy by being diligent in writing a business plan.
“The most intelligent man (or woman) living cannot succeed in accumulating money–nor in any other undertaking–without plans which are practical and workable” – Napoleon Hill, Think and Grow Rich, page 83
Business plans come in many forms, mostly depending on where they will be used. It can just be a two-page pitch for a venture capitalist or a 20-page feasibility study for yourself and your potential investors.
However, regardless of the intended purpose, a business plan usually has these common and essential elements below.
Mission, Vision and Values Statements
These define the philosophy and purpose of your business. It states your ultimate goals and describes how you want your business to be regarded by your target market.
For guidance regarding this matter, you may refer to my previous article entitled, Mission, Vision and Values: Defining The Purpose Of Your Business.
The Executive Summary
This is a concise summary of the plan’s important points. This section gives a synopsis of your entire business plan and is often intended to give readers a clear idea of what the business is all about.
Although placed at the beginning of the document, it is actually written last, after the entire business plan is completed.
This section will explain in greater detail what the business is all about. It will also state the rationale behind the business – its importance, target market, and profitability.
This part also describes the business processes involved in running the venture as well as the business model that will be used.
It shall also enumerate the pieces of equipment that will be utilized, the space requirements, and other operating necessities.
The Business Organization
This portion lists the key positions in the business organization, including the different departments, the required number of personnel, and the duties and responsibilities of each person involved.
You can also provide a profile description of the management team. Write down the necessary leadership skills, personal resources, and required background experience of the people that will run the business.
Products and Marketing Plan
This part will discuss the products and services of the business. What are you offering? Who is your target market? How big is your audience? What is the current situation of the industry?
Along with your demographics and market analysis, provide the strategies that will be used to influence sales. This means defining your edge and showing how you plan to compete against existing brands.
If you’re pitching your business plan to potential investors, then you must make this part as comprehensive as you can. This section describes how the money will flow in and out of your business.
Include a breakdown of capitalization expenses, a detailed budget for operating costs, sales and profit projections, a breakeven analysis, the expected duration for return of investment (ROI), and other performance statistics. Your financial strategy must show investors that your business will be profitable; but more importantly, it should provide you with a realistic view of how the business is expected to perform.
The internet is full of resources and useful information on how to write an effective business plan.
Some of them will provide you with a more detailed guide on each section and teach you how to design a business plan for specific needs.
Nevertheless, I would like to share with you a business plan sample template which you can use. Just click the free tool to download this Microsoft Word file.
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