How to Write a Business Plan, Step-by-Step
Discover the importance of writing a business plan, and then follow our step-by-step guide to draft your own.
As an entrepreneur, it’s easy to feel like every business idea you have will be the next big thing. Maybe you’ve landed on a novel concept. Or perhaps you’ve even made a sale or two. But if you want your ideas to take off, that’s where writing a business plan comes in handy.
Business plans can help turn your ideas into something tangible. They encourage you to explore your set goals for your business, define your objectives, and use research to back up your projections. Whether you’re in the early stages of brainstorming or already turning a profit, a business plan helps you develop a strategy to grow your company.
To help you make more sense of it all, we’ve provided some of the many benefits of business planning and a step-by-step guide on how to write a business plan. Follow along to find out how to draft one of your own.
How to Write a Business Plan, Step-by-Step
Before we dive into how to write a business plan, let’s back up and cover the benefits and purpose of business planning in the first place.
What Is a Business Plan?
A business plan is a document that describes a company’s goals and objectives and how it plans to achieve them. Essentially, it’s a roadmap that includes all the moving parts, from establishing what the business sells to determining how it will make a profit.
So, why does your business need one? For starters, it helps you conceptualize and brainstorm the many elements of your business. To write one, you must consider crucial aspects, such as the time, resources, and money needed to get your concept off the ground. It also requires you to determine what makes your business different. Furthermore, drafting a business plan encourages you to research your industry, ideal customers, and competitors—all of which can help you strategize and establish a thoughtful approach to conducting business.
After reading your business plan, others should clearly understand your business and its mission. You can use the document to explain your concept to potential hires, partners, and investors. Some small businesses even use their business plans to apply for grants and other funding opportunities.
Different Kinds of Business Plans
Now it’s time to move on to the different types of business plans: traditional, lean, and nonprofit.
Traditional business plan
Traditional business plans are the most common. These tend to be extensive, detailed, and complex documents that can easily run 15 to 25 pages long.
Lean startup plan
One-page business plans are what we refer to as lean startup plans. They’re a condensed and simpler version of the more detailed traditional business plan, making them quicker to write and easier to digest.
Nonprofit business plan
A nonprofit business plan is similar to a traditional (for-profit) business plan in that it provides the organization’s lengthy action plan. The only difference is that it typically includes a section that describes the positive impact and social benefits of the business’s offerings.
How to Write a Business Plan in 8 Simple Steps
While there are many different ways of writing a business plan, we’ll cover the basic steps for drafting a traditional one.
That said, it’s important to note that drafting one of these is not something you’ll accomplish overnight. Allow yourself plenty of time to mull over ideas, reconsider concepts, conduct research, and revisit your goals. When you put in the time and energy it deserves, you’ll eventually arrive at a well-thought-out business plan that will act as your guiding light.
Write your executive summary
The first step in writing a business plan requires tackling the executive summary section. Think of this like crafting your elevator pitch—you want to summarize your business and provide a high-level description, conveying what you want to do and how you plan to do so. Most executive summaries are typically one page or less.
When outlining your executive summary, be sure to answer the following questions:
- What does your business do?
- What does your business want to accomplish?
- Who is involved in your business?
- What are you selling?
- SWho is your target audience?
- How will you market to your target audience?
- What is your current financial standing?
- How will you make a profit?
- Are you looking for financial assistance?
Draft your company description
Your company description allows you to elaborate on the information you touched on in your executive company. This is where you can go into more detail about what your business does, offers, and the problems it aims to solve. What sets your business apart? What competitive advantages do you have? And what makes your business a good investment?
In this section, also be sure to include information regarding your business model, structure, key employees, objectives, and company history.
Conduct market research
Now it’s time to do some research. By performing a market analysis, you can better understand the competitive landscape and how your business fits into the picture.
Consider your potential market. Who are your target customers, and how many of them are there? Using government stats, news coverage, and academic research, assess your target customers, determine their purchasing behaviors, and explore relevant industry trends to make educated projections about the future.
Next, pinpoint your competitors. What are they currently doing, and how do you plan to differentiate your offerings from theirs? Even if your business has no direct competitors, look into indirect competitors to help establish what sets your business apart.
Determine management and organization
This next section of your small business plan goes into the nitty gritty details about your business structures and organization.
Begin by describing your business structure. Are you incorporating your business as a sole proprietorship, LLC, S corporation, C corporation, or limited partnership? Then explain who is working for your business and what they bring to the table. To do so, you could create an org chart and include roles and responsibilities. You can even include the resumes of key employees to further communicate their worth to the business.
Describe your products or services
In this stage of your business plan, you can go into more detail about your business's goods or services. Describe what makes them different and where you source your products. Also, consider explaining what informs your decisions when it comes to your offerings and the plans you have for future inventory. This is also the section where you can communicate information regarding any intellectual property.
Establish a marketing plan
Now, you’ve explained your business model and described what you plan to sell, but how will you get your business in front of your target audience? That’s where your marketing plan comes into play.
In this portion, you’ll dive into details about your marketing strategy, such as how you plan to promote your business and where you’ll sell your products. Your market research on your ideal customers should help inform these marketing decisions. For example, based on your target audience's age and social media behaviors, you may lean more heavily on one marketing platform over another.
From sending SMS texts to placing ads on social media channels, there are countless marketing strategies to explore to help promote your business.
Create financial plans
You'll address your business's finances in this remaining portion of your business plan. This section is critical if you want to acquire funding, as potential investors will want to assess your business's financial health before agreeing to back it.
While it’s up to you how detailed you’ll want to go when discussing your financial plans, most business plans include the following:
- Cash-flow statement: Provides the inflow and outflow of cash during a period
- Income statement: Reflects your business’s revenue, expenses, and profits during a set timeframe
- Balance sheet: Shows what your business owns in assets and what it currently owes in liabilities
These documents, and any others you decide to include, should tell a story of your business’s financial gains and losses.
After reviewing and editing your document, you’re done— for now. Your business plan is a living document, meaning you should periodically revisit and update it as your business evolves. The more you fine-tune this document, the easier it’ll be to convey your business plan to others.
Contact EZ Texting Today
Addressing your marketing plan is an essential part of business planning, and that’s where SMS marketing can play an important role. After all, sending SMS texts is a proven way to help increase customer engagement and get your content in front of the right audience. Contact us today to learn more about how an SMS platform like EZ Texting can benefit your small business.