How to create a standard business plan

WHAT SHOULD BE IN A STANDARD BUSINESS PLAN IN 2021?

Uncommon Truth: Every company needs a standard business plan, and should have one. However, not every business or needs to draw up a formal and standard business plan to show investors, bankers, or third parties.

The basic truth most business consultant will hardly tell you is that if your business plan is just intended to be used by you and your immediate team, then you don’t need a formal and standard business plan. What you need is a lean business plan or a simple operational business plan that highlights your basic operations and strategies.

On the other hand, if you need to develop a business plan that you can present to investors, then this article right here is perfectly written for you are you presenting to investors, bankers, attorneys, government agencies, and incubators? You can follow the guideline I have put together in this article that can help you create a formal and standard business plan fit to be submitted anywhere.

With the guideline I have put together in this article, you are set to write a standard business plan for yourself, once you are ready to carry out due diligence and commit your time. If you are in need of a professional to skip the hassle that comes with the preparation and researching, you can contact one right here!

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Frequently Asked Questions About Writing A Standard Business Plan

How do you create a standard business plan?

When creating a standard business plan, the order in which it is written is not as important as the presentation. As much as several target readers prefer that you should present your business plan in a format, you don’t necessarily have to conduct the writing process in that order.

For instance, although the executive summary is the first section of the business plan, it is always advisable it should be written last after you have written every other sections. Why? Well, it is a summary of the entire business and business plan.

Also, though the market analysis and research comes up somewhere in the middle of the plan, I prefer executing it first. Why? It gives me enough information about the industry and a wider view of the potential of the business idea. Some professionals also like to write the management summary early.

So, you don’t have to write any section of your standard business plan in any order. You can start wherever you feel comfortable to start from. The professional truth is; a standard business plan actually requires you going over and over the plan till you feel it is perfect.

What Type of business plan should I write?

It is your idea, your business, your audience, and you also get to determine the type of business plan you need. You intent and purpose of writing the business plan will determine how bulky it will be.

If you are writing your business plan just for yourself and your immediate team, you can just make do with a lean business plan or a simple operational plan. Why create a lean business plan? Well, it is a plan useful for internal control that you can make reference to anytime and update as you run your business. It is a business plan suitable for those are not seeking for external investment or corporate partnerships.

However, on the other hand, if you’re planning to present to third parties, then you need to create a comprehensive and standard business plan.  And if you want investors, bankers, or agencies to take you serious, then you need to present your plan in a standard business plan format that covers all areas that interests your audience.

How important is the order of my business Plan?

The sad truth is; there is no worldwide organization regulating how a business plan is to be written. So, in short, there is literally no established order for writing a standard business plan except for ensuring that the Executive Summary comes first.

Once you understand the goals you’re trying to achieve with your plan, then you should order it in a way that helps achieve the goal.

What I suggest is that if the plan is meant for personal use, then you should write it in such a way that the similar sections are put together for easy referencing purposes. And if your goal is to present it to third parties, then let the stronger and most important section of the plan come first. You know what they say about first impression right?

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Should I include Images, Charts, and Tables in my Standard Business Plan?

From my experience writing several professional and standard business plan that has been use to raise millions in funding, I believe that every business plan should include images, charts, and tables. These charts, images, and tables can be used to effectively illustrate some numbers and the potential of the business.

Your standard business plan must include some numbers that shows your financial projections and needs. In your standard business plan, a standard cash flow or income statement should not be missing. This means the use of tables, and probably charts to illustrate the growth.

Your market analysis should also include some charts illustrating the potential of the industry. The market analysis might also include pictorial representations of the industry insights. It may also feature images of the geographical insights of your target market.

Detailed outline of a professional business plan

Outline of a standard business plan

If you are not sure what you need to include and what not in your business plan, then you should read my article on HOW TO CRAFT A SIMPLE PERFECT BUSINESS PLAN. It highlights everything you need to know about every section of a business plan, and why it should be included.

And if you are thinking of the topics and sections you should include in your standard business plan, then you can make use of the outline I’m about to lay out in this article. However, you must realize that the final outlook of the business plan will reflect the nature of the business and the purpose of the plan.

You can use the following outline in this post as an ultimate template for creating your own standard business plan. However, you need to focus more on the plan you’re writing to make sure that you stick to the sections that are relevant to your business.

1.0 EXECUTIVE SUMMARY

  • Problem: A summary of the needs of the market and the problem you are solving.
    • Solution: What you are doing to tackle the needs and the problem of the market.
    • Target Market: A summary of your target and potential customer base.
    • Competition: Talk about the current alternatives in the market and the potential ones that might rise after you launch.
    • Strategy: Hint the reader about the strategies you intend to compete with right after acknowledging the competition in your standard business plan.
    • Financial Summary: Key highlights of your financial plan that covers costs, sales, and profitability. This is also a good place to highlight the amount of money you need to raise
    • Milestones and Traction: It is always good to give the reader a taste of what you’ve done so far and how visionary you are with your next milestones.

2.0 Company Description

  • Problem worth Solving: Time to thoroughly describe the problem and need you are solving or intend to solve. A thorough description of the problem or pain point you intend to solve for your customer base. 
  • Our Solution: A detailed breakdown of your proposed services or products.
  • Mission and Vision Statement: Here’s a good place in your standard business plan to inform the reader about where the business is going and what it aims to achieve.
  • Company History and ownership: This is the place where you intimate your readers about the history of the company, its story, the location of the office and its relevance to the business.
  • Roadmap/Future Plans: A list of decisions and activities carried out so far and those you plan to take in the future to drive the business’ growth and expansion.

3.0 Market Analysis Summary

  • Industry Overview: This is a good place in your standard business plan to bring your readers to understand the industry you operate.
  • Market Segmentation: Define the potential groups of customers that your business needs to interact with by their distinct characteristics or class.
  • Target Market Segment Strategy: Describe your specific target market, and the strategy have in place to reach them.
  • Market Needs: Talk about the needs of your target market at this point.
  • Market Trends: Describe the patterns and behaviors of the market you are operating in. Explain the buying patterns, the financial trends, and response to new entrants.
  • Market Growth: Never forget to let your reader in on the growth potential of the market.
  • Competitive Analysis: Describe and talk extensively about your competitors. Their strategy, their volumes, and other relevant information.
  • Competitive Advantage: describe the extra sauce you bring to the market that will make your target customers choose you over the competition.

4.0 Execution

  • Marketing Plan: An outline of your marketing and advertising strategy.
  • Sales Plan: Talk about your sales strategy, the pricing plan, and the sales projection.
  • Technology: Talk about the technology you’ll bringing in to help in your business process.
  • Milestones: Highlight the roadmap of some certain goals and objectives of the business in this section of your standard business plan.

5.0 Management Summary

  • Organizational Structure: Give an overview of your business human resource structure, specifying the roles and responsibilities of each level.
  • Management Team: Give a brief overview of those who will be at the helm of affairs of the company. Your investors are very much interested in this section of your standard business plan.
  • Personnel Plan: Give a detailed explanation of the human resources you need to run a smooth business.

6.0 Financial Plan

  • Important Assumptions: Highlight the assumptions you made and leveraged on to arrive at your financial projections.
  • Revenue/Sales Forecast: Give a breakdown of the revenue you expect to generate for the next 1-5 years.
  • Projected Cash Flow: Give a detailed breakdown of the cash flow statement in your business for the next 1-5 years.
  • Projected Profit and Loss: Walk the reader through how much profit you estimate for the next 1-5 years for the business.
  • Business ratios: talk about the business ratios in this section of your standard business plan.
  • Break-even Analysis: Give an illustration of the break-even analysis of your business.

7.0 Appendix

Here is a strategic place in your standard business plan to provide some additional information about the business to buttress the feasibility of the success of your business.

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