A business plan is a document that describes the strategies, objectives, and market segment and makes financial forecasts of a company in the medium and long term.
Often described as a roadmap to success, a business plan demonstrates a business’s viability and potential for financial returns. In addition, it must analyze the internal and external environments and guarantee the remuneration of investors.
In this article, you will check out the eight steps of a business plan and determine which steps to take for your company to succeed.
Eight steps to success of your business plan
1 – Determine your organizational identity
The first step in the steps of a business plan is to determine your company’s organizational identity.
So, in this section, you should provide an overview of your business. Thus, you will need to consider the aspects that make you unique.
The organizational identity is based on the company’s Mission, Vision and Values.
- Mission: is the purpose your company stands;
- Vision: this is where you want to go with your company in the long term;
- Values: are the non-negotiable principles.
The MVV statement must be available to all company employees, from operational positions to board members. And, therefore, written clearly and objectively.
The organizational identity will serve as the basis for the next stages of the business plan and decision-making at all hierarchical levels.
2 – Establish your business goals
Business objectives are everything you intend to achieve with your company in the next five years at least. For example:
- Increase market share by 20%
- Increase brand awareness by 16%
- Leverage sales in a certain geographic region
These business objectives must be clear to the organization and relevant, measurable and attainable.
3 – SWOT Analysis
A SWOT Analysis is extremely useful for identifying and analyzing the internal and external factors that can affect your business.
This technique helps you analyze and understand the strengths and weaknesses of your company, as well as the opportunities (Opportunities) and threats (Threats) that surround your business.
4 – Market analysis
This item in the steps of a business plan consists of checking if there is a viable market for your product or service.
There are four main topics to consider in this section:
- Target Market – This is the intended market segment for your service or item.
- Market Trends – Is the market growing or declining? You will need to show any recent market changes, forecasts and plans to meet future demands.
- Competitor Profile – What are the competing products or services? List the key players in your market and include their revenue, profits and market share.
- Competitive Advantage – This is why potential customers will choose your product or service over your competitors.
5 – Describe your ideal customer
When your target market segments are defined, it’s time to define your ideal customer, also known as the buyer persona.
It is a fictitious representation of a member of your market. Thus, this “character” has a name, gender, income level, tastes, motivations, needs, geographic location, etc. The more detail in the personification of your ideal buyer, the better.
A solid persona will be extremely useful to help you identify the marketing and sales tactics you will need to use to attract those ideal customers.
6 – Identify a problem and the solution
Explaining your business regarding a problem and solution is necessary to prove why your idea is relevant. But unfortunately, one of the biggest mistakes entrepreneurs make is trying to solve a problem no one else has.
Make a general description of your product or service. Then, include details and highlight what sets your product or service apart.
Don’t forget to talk about how your product meets your customer’s needs and how it differs from your competitors. Then, identify and describe a problem and present the solution that your business intends to offer.
7 – Make a financial plan
Every good business plan needs a financial plan. After all, things don’t happen without money, and potential investors need to know if it’s worth investing their money in your idea.
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A basic financial plan typically includes monthly sales and revenue predictions for the first twelve months. And, in addition, annual projections for the next five remaining years.
This document must include:
- Current balance;
- Past two years of finance, if applicable;
- Financial projections for 12 months and annually through year 5;
- Breakeven analysis;
- Cash flow projections;
- Sales projections;
- Income and Expenses.
In this section, you can also include start-up and capitalization cost requirements or financing and loan requests.
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8 – Make a staffing plan
Your staffing plan details how much you plan to pay your employees. For a small business, you can list all the positions in the staffing plan and how much you will be paid each month for each position.
For a larger company, the personnel plan is typically broken down into functional groups such as Marketing, Sales, Finance, etc.
The staffing plan will also include what is commonly called an “employee load.” That is the cost of an employee in addition to salary. This includes payroll taxes, insurance, and other costs necessary to keep an employee at your company.
Conclusion
Creating a business plan remains valuable in launching any new venture or for companies looking to take new heights.
But it is worth remembering that this document must be continually updated as the business evolves.
If you want to know the steps of a business plan, don’t waste more time and create yours now.
The setting is a business consultancy focused on generating value and delivering results. Thus, it uses a systemic methodology, valuing people and focusing on excellence to help companies excel daily.
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