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A business plan is a legal document that sets business goals, outlines why goals can be achieved, and outlines strategies for achieving those goals. It may also include information about the background of the organization and the project execution team. A business plan is a written document that outlines the details of your proposed business. This document should explain the current business situation, the needs, expectations, and expected results and evaluate all aspects.

Now that you know what a business plan is and why you need it to start and grow your business, it’s time to experience the process of writing and completing a business plan.

This step-by-step guide will teach you the steps involved in completing a business plan and what you need to do at each stage. Stay tuned to Ded9. First of all, we want to introduce you to 3 general rules for writing a business plan.

The general rule for writing a business plan

1- Write it short.

Business plans should be concise for two reasons:

1- Your primary purpose is to read the business plan you have written, and definitely, no one wants to read a 100-page or even 40-page business plan.

2. Your business plan should be a tool to run and grow your business. So you will undoubtedly come back to it over time to modify or use it. So if this business plan is extended, you will never have the patience to adjust and reuse it.

2- Know your audience.

Write your business plan in a language that is easy for the audience to understand.

For example, suppose your company is curious about complicated scientific methods. In that case, you should explain it so that investors and people who do not have enough knowledge fully understand what you are presenting. Remember that investors are not scientists, so adjust your writing to the extent of their knowledge and understanding based on your knowledge of them.

3- Do not be afraid.

The vast majority of startup owners and entrepreneurs are not business experts. So other entrepreneurs, just like you, do not have a degree in entrepreneurship or business. So there is no need to worry at all.

Writing a business plan may seem like a daunting task, but do not worry if you know enough about the business you are running. You can quickly come up with a standard business plan.

Before continuing this tutorial, keep in mind that you do not need to write a complete business plan as we teach. If your business or startup is in its infancy, you can use the business model canvas and the pure canvas, which can be said to be simple one-page business plans.

But if you have a big business and decide to attract capital, you must prepare a complete business plan to present to the investor.

Six things that should not be forgotten in a business plan

Now that you are familiar with the general rules of writing a business plan, it’s best to go into the details of writing it.

Remember, your business plan is a valuable tool to help you build a better business, so do not see writing it as a homework task.

A well-written business plan is one that you return to regularly and refine with new information you have discovered about customers and marketing sales tactics.

The main parts of a standard business plan

1- Executive summary

This section provides an overview of your business and plans. This section is usually written at the beginning of a business plan and is usually 1 to 2 pages.

2- Opportunity

This section answers these questions: What do you sell, and how do you solve a problem (or need) for your market? Who are your target market and competitors?

3- Execution

How do you take advantage of your opportunity to turn it into a business? This section covers your marketing and sales plan, operations, and how to measure your success.

4- Team and company

In addition to great ideas, investors are also looking for outstanding and influential teams. Use this section to introduce and explain your current unit and those who should be hired. If your team is now complete and you have done your hiring, in this section, tell the legal structure of the company, office address, and a short story of the company history.

5- Financial plan

Your business plan is not complete without a financial forecast. Here are some things to look for when selecting yours.

6- Appendix

If you need more space to attach product images or additional information, you can use un, the final quarter.

Now that you are very familiar with the main parts of a business plan, it is time to go into the details of each piece and complete a real example of a business plan:

1- Executive summary

The executive summary even introduces your company explains what you do in your business. This section is structurally the first chapter of your business plan.

Since this is the first part that the investor encounters, I advise you to write this part after completing the business plan. Because when you complete the business plan to the end, you get an overview of how to write a summary of your business, so you can return to this section at the end to complete it in the best possible way.

The executive summary can act as a standalone document. A document that perfectly describes your business. Also, some investors read only the administrative summary section to evaluate companies. If you find the writing in this section appealing to them, ask them to develop the complete plan.

Since the executive summary is an essential part of your business plan, you need to make sure it is as clear, concise, and straightforward as possible. List the key features of your business in this section, but avoid giving too many unnecessary details. Therefore, the executive summary is a one to the two-page section that describes your business with an eloquent, fluent, and gorgeous expression and can encourage the investor to continue the business plan.

Components of a typical executive summary

1- A sentence about your business

At the top of the page, just below your business name, is a phrase from your business that describes precisely the nature of what you do. (Such a sentence is called a value proposition. In the article “Designing value proposition with the help of a can, you can learn how to design this sentence.)

2- Problem

Briefly descript your business solves be in a sentence in the market. Every business must solve a problem in society and respond to a specific need to succeed in the market.

3- Solution

It is precisely the product or service that you offer. Explain how you can solve the problem you have placed in the market with the help of your business?

4- Target market

Who are your target customers? How many of them are available to you? It is essential to describe these and not use conjectural and imaginary numbers. To better understand, imagine you are a shoe manufacturer. To explain your target market, you need to choose which segment of society you produce shoes? Are these sneakers, and are your customer’s athletes? Or do you have formal shoes, and your managers and employees are your customers?

Once you have a transparent target market, you will have an easier task determining your marketing strategies. Therefore, be careful enough to explain this part.

5- Competition

How is the problem you are trying to solve solved today? Is there another alternative to your product/service? Who are your rivals?

6- Team

Give a brief explanation of your team and a brief description of why you and your team are the right people to implement this idea and business in the market?

Investors connect great importance to teams. They care about the team even more because a great idea needs a great team to execute. Even if you have the best view in mind and your team is weak, your chances of raising capital and even your business will be meager.

If you still have not found a suitable team for your business, you can do it through the social network Startup Fly.

7- Financial summary

Show the critical aspects of your financial plan. Preferably use a chart to explain sales, cost, and profitability. If your business model and how you make money need more explanation, be sure to explain below.

8- Financing requirements

If your goal is to raise capital to start or grow your business, you need to explain in the executive summary what you need. Do not worry about the full details of raising money as it will be discussed enough after it is presented in the main negotiations. Thus, a brief explanation of the financial need and the return on investment period in this section is good.

9- Goals and traction

The last key element in the executive summary that investors will see is your progress so far and the goals you plan to achieve in the future.

If you already have possible customers and have assumably already made sales for your product/service, be sure to mention them in the executive summary section. (This demand from the customer and the attractiveness of your product/service to them is also called traction, which you can read by reading the article “What is traction and how it should be measured?” With its whole meaning, Get acquainted.)

2- Opportunity

The opportunity section in your business plan needs to talk about your business’s core and vital elements. In this section, you should explain in detail the problem you have identified and the solution you have found for it, as well as why your product/service is suitable for the market in the presence of rivals and why customers of the product/service You should use opponents instead.

The person studying your business plan is already familiar with your business in the executive summary section. Still, again, this section, the opportunity section, is critical because, in the following areas, your executive summary will go into detail. And answer any questions that may not be answered in the Executive Summary.

Here are the components you need to talk about in the opportunity section:

Parts of a standard opportunity section

1- Problem and solution

Begin the opportunity by describing the problems you solve for your customers. What are the primary pain and trouble of your customers? How do they solve their problems today (without having your product/service)? What problems do they solve? Existing solutions to your customers’ problems may be costly or complicated.

Defining the problem, you solve for your customers is the essential element of your business plan and is very important for your success. If you can not explain the issue, you solve it for your potential customers. You probably have not chosen the right company and idea.

To confirm that a real problem is solved for potential customers, you should stay away from your computer, leave the house and interview your potential customers.

Through customer interviews, you need to make sure that the problem you are trying to solve is a real problem that is worth solving.

Once you have described your target market problem, you need to define your solution. Your solution is precisely the product or service you provide to your customers.

After introducing the solution, you should explain the details. You need to show how your product or service solves the customer problem and how it can make your customers’ lives easier and better?

2- Target market

Now that you have defined your problem and solution in the business plan, it is time to focus on your target market. Target market is the answer to the question “To who do you sell your product/service?”

Depending on the type and model of your business, you may need to explain more or less about the target market. In this section, you need to specify who will buy your product/service and make an inaccurate estimate of the number of these people. It can be a warning sign for your business if there are not enough customers for your product or service.

3- TAM, SAM, SOM

A good business plan identifies different target market segments and shows how fast each element increases. A classic method called TAM, SAM, SOM parsing (read “Tam, Sam, Sam”) can be used to measure market size with a top-down approach and a bottom-up approach.

For a complete understanding of the concept of market size and TAM, SAM, SOM, you can read the article “What is the market size and how is it calculated?” Read.

Once you have defined your target segments, it is time to explain your ideal customer for each part.

Your ideal customer is a fictional example of your target market and is often referred to as the “customer persona” or “user persona.” Your client’s personality should include name, gender, income level, and so on.

4- Key customers

This section is only required for companies and organizations with very few customers. A typical company that sells its product/service mainly to consumers can ignore this part.

If your sales are to other businesses and you are a B2B business, you may have several vital customers essential to your business’s success. If so, use this section, which is the final section of the target market, to explain the details of those customers and how they affect the success of your business.

5- Competition

Instantly after describing the target market, you should tell your competitive position. Who but you have designed and implemented solutions to solve target customers’ problems? What is your competitive advantage over them?

Most business plans use a “competitor matrix” to list competitors and compare their solutions to your business solution. You can create a simple competitor matrix by listing your competitors to the left of the matrix and adding a column for each attribute. Then check to see if opponents have a particular feature. See the image below for a better understanding:

The most crucial thing in this part of the business plan is how your solution works differently or better than other solutions. Investors want to know what benefits you have over your rivals. One of the biggest mistakes entrepreneurs make is no sign of superiority over their competitors in their business plan.

3- Execution

Now that you have described your opportunity, it’s time to explain how you want to run your business. In this section, you should talk about marketing and sales plans, operations, measuring success rate, activities needed to achieve success, and so on.

Components of a standard implementation section

1- Marketing and sales

Before you think about writing your marketing plan, you need to have a suitable identification and definition of your target market. It would help if you also draw your customer’s persona. Without a proper understanding of the customer, your marketing plan will not matter much.

2- Positioning

It can be said that the first part of your marketing plan is about how to position your company and your product/service. Positioning means creating differentiation and difference between the brand and opponents in customers’ minds. Do you want to offer your product/service at a lower price than the rivals, or do you want to offer some luxury from it?

Before you start positioning, you should take some time to evaluate the current market and answer the following questions:

• What features or benefits do you offer that your competitors do not provide?
• What are the primary needs and wants of customers?
• How do your opponents position themselves?
• Why should customers choose you over rivals?
• How do you evaluate your solution compared to rivals’ solutions?

After answering these questions, you can work on your positioning strategy and define it in your business plan.

You can use the following simple formula to design your positioning strategy:

For [target market description] that [target market needs], [this product] [how it meets these needs]. Unlike [main competition], it is [the most important distinguishing feature].

For example, the positioning for LivePlan, which is a business planning product, is as follows: “LivePlan is an excellent solution for entrepreneurs looking to start a business and raise capital from investors. They can use it to quickly and easily produce a suitable and standard business plan for themselves. Unlike [rival name], LivePlan creates a real business plan with an actual vision, not just a set of meaningless numbers…

3- Pricing

Once you’ve figured out your positioning strategy, it’s time to move on to pricing. Your positioning strategy determines how you price.

Pricing decisions are more like art than science. Here are some essential pricing tips to keep in mind

• Covering your business expenses: Of course, there are exceptions to this, but in most cases, the cost of producing and delivering your product/service should be less than what you receive.
• Primary and Secondary Profits: Your direct price may be the center of your immediate profit. For example, you may be pricing your product at cost or even less. But have a support contract with your product that is much more profitable than itself.
• Market Rate Matching: Your prices should align with consumer demand and expectations. If the price is too high, someone may not buy your product or service, and if it is too low, the customer thinks your product is of poor quality.

4- Promotion

Given the pricing and positioning, it’s time to look at your advertising strategy. A complete and standard advertising campaign can explain how to create a relationship between the company’s vision and customers. Remember, the important thing is that you want to measure the amount of advertising you spend on the number of sales it generates.

Here are some key pointers in moving your advertising campaigns forward:

packing

If you are selling a product, the packaging of that product is an essential issue. It is always a good idea if you have pictures of your packaging, including those in your business plan. Make sure the packaging section of your app answers the following questions:

• Is your packaging in line with the company’s positioning strategy?
• How does your packaging express your core value?
• How is your packaging compared to rivals?

Advertising

Your business plan should include an overview of the types of advertising you plan to spend. Do you want to advertise online? Or do you want to advertise in traditional media such as radio and television?

public relations

Using media can be a great way to reach customers. Therefore, if you intend to use news media and magazines, be sure to mention them in advertising programs.

Content marketing

One of the best advertising strategies is content production. You reach your customers quickly by producing free content in the field where you are active. For example, writing sports articles and making sports-related videos can be a great option if you are a sportswear company.

Social Networks

Being on social media is the most important thing for a business today. You do not need to be active on all social networks. First, find out which social networks your customers are most active on and spend time and money on them.

5- Strategic cooperation

As part of a marketing plan, you can work with another company to design a marketing plan. These partnerships are usually win-win and will create value for both companies.

6- Operations

The operations part is about how your business works. Administrative operations can also vary depending on the type of business you have.

If you need raw materials to produce your product, you have to get these materials from other companies. So you need to know the details of your operation, such as where you get these raw materials from and how you ship them.

Also, if you are a company in information technology, you should mention in your business plan what technology is used and the secret sauce (secret) of your work.

7- Distribution

A standard distribution plan is an integral part of their business plan for manufacturing companies. You can probably skip this section and move to the following areas if you are a service company.

Distribution means how you deliver your product to your customers. Each industry has different distribution channels, and the best way to create a suitable distribution plan is to interview and consult with other companies active in your industry.

8- Objectives and standards

This section should talk about the future and the criteria you measure your success. You need to show the investor that you have a plan for the future and have decided on everything.

For example, suppose you are building a medical device, in addition to talking about the cost of producing the device. In that case, you should also talk about what you need to do in the future, such as obtaining the essential permits and multiple tests.

Traction

It would help if you talked about possible successes you have achieved so far in the section. It would help if you showed the investor that people need your product/service, and even some people have welcomed your product or service.

Metric

All businesses need to have rulers that fit their business model to measure their success. These rulers are called measures.

(If you are not familiar with metrics, you can read the article “Types of key metrics to measure startup growth.”

9- key risks and assumptions

Finally, your business plan should include the key assumptions you need to make your business a success.

You can use it to find critical assumptions is to think about the risks. What are the chances for your business?

For example, if you do not already have fulfilled customers, you assume that your product will be welcomed after production and presentation. Or, if you want to implement an online advertising campaign, you think how much sales you will have after implementing the campaign.

Knowing the assumptions at the beginning of your business can determine your success or failure. If you do not know the beliefs well, you have bought a significant risk to your business life.

4- Team and Company

In this chapter, you should introduce the structure of the company and the members of the leading team. These details are crucial for investors because they want to know who is at the company’s helm and whether they can succeed.

Team

An old saying is that investors do not invest in ideas but in the team members who want to implement the concept.

Some investors must prefer to invest in a mediocre idea plus a strong team instead of a great idea plus a weak team!

The team is the critical element of a business that determines whether the stated goals can be achieved or not.

The critical issue for investors is whether the team can execute the idea.

In the team section, you have to introduce the team members well. Talk about their experiences and strengths. Try not to use corporate titles such as CEO and CTO because a strong team is a team that can work together in all tasks and situations. Not that the charges are clearly defined, and each person does something other than their tasks.

Company

The company section will probably be the shortest section of your business plan. This section should include the following areas:

• Company Mission
• Intellectual Property
• Structure and legal ownership of your company
• Location of your business
• A brief history of the company

5- Financial plan

The last and certainly the shortest chapter is your financial plan. Entrepreneurs usually do not do well with writing a financial plan.

A standard financial plan includes monthly forecasts for the first 12 months of business and annual forecasts for three to five years. Three-year forecasts are usually sufficient, but some investors will also request a five-year forecast.

Below you will find the financial statements that you should include in your business plan and a summary of what you should write in each section.

sales forecast

Your sales forecast means how much sales you will have over the next few years.

The sales forecast is usually divided into several rows, and one row is provided for each main product or service.

For example, if you own a restaurant, divide your forecast into the following groups: Lunch, dinner, and drinks. You can break down your predictions into target market segments or significant product categories if you are a product company.

Staff plan

Your employee plan gives you more details about your employee payments. You may list each position in the employee plan for a small company and pay for each post each month. The employee plan is usually transformed into functional groups such as “marketing group” and “sales group” for a larger company.

Profit and loss

Profit and loss (or P&L) are where all your numbers come together and show you that you are making a profit or a loss. P&L collects information about your sales forecast and employee plan and includes a list of all your other expenses related to running your business.

A standard profit and loss is a page that includes the following:

• Sales
• Cost of goods sold
• Gross Margin
• Operating expenses
• Total operating expenses
• Operating income
• Profit, tax, depreciation of assets, and interest (taxes, depreciation, and amortization)
• Total expenses
• Net profit

Cash flow

Cash flow is often confused with profit and loss if the two are very different and have different goals. While P&L calculates its profit and loss, cash tracks how much cash (money in the bank) you have.

Balance sheet

The next part of the financial plan that most companies need to include in their business plan is the balance sheet. The balance sheet provides information about the financial health of your business. This list lists your company assets, weaknesses, and your owners (owner). If you take the company’s debts out of the assets, you can determine the company’s net worth.

Use of funds

If you are attracting investors, you should dedicate a small part of your business plan to how to use this capital and specify how much and in what cases you will spend the received money.

Exit strategy

The last thing you need to write in your financial plan chapter is the exit strategy. An exit strategy is your plan to sell your business to another company or offer it publicly (IPO). If your investors are skeptical, they want to know your vision and strategy.

6- Appendix

The attachment is valuable for any charts, tables, definitions, legal notes, or other vital information that you feel is long. For example, if you have a patent or patent, you can enter a picture of it in this section.