What is a business plan?

Widely recognized and highly regarded, a business plan is a written document that is clear, concise and credible. It outlines what your company does, identifies its unique values and business goals and describes how you will mitigate risks and deliver forecasted returns. Although it bears all relevant details to the reader, an effective business plan is typically simple and straightforward.

Apart from securing funds to start or grow your company, a good business plan is your key to staying on track. It provides you with a concrete vision to help you work in alignment with overall goals. In short, a business plan is also an essential reference for you, the business owner.

How to write a successful business plan

Here are 11 business planning basics to help you create a successful business plan:

Keep it detailed yet simple

Set a professional, persuasive tone that demonstrates you have the resources, skills and drive to help make your company succeed. Write these points out simply and succinctly. Avoid jargon and excessive wording.

Address the questions you anticipate being asked

What may seem basic to you may require clarification by the reader. Describe your target customer, the exact nature of your business, the products or services you sell and your growth plans. Investors usually want to be given clear answers, not be left with more questions.

Sell your unique selling point

What is it about your product or service (e.g. Indeed products) that will entice customers? What value can you add to their lives that will attract them to you? Your marketing begins right here, so state your unique selling point (USP) early on in your business plan.

Include your market research

Business planning includes thorough market analysis (e.g. for the labour market). This provides vital insights into your target clientele, competitors and customer demographics. Market research can show investors and lenders how well-versed your business is and how well your goods or services match your consumers’ needs.

Show competitive analysis research

Your competition is also something potential backers may want to see. Consider identifying your competitors’ strengths and weaknesses and indicating how you will exceed them or use them to the company’s advantage for financial growth and market share.

Lay out your company structure

A neat chart showing the organizational flow of key personnel can be an excellent informative visual. Here, you can clearly show the roles of managers, perhaps in a hierarchical manner, and the number of people you anticipate recruiting in your organizational structure.

State your HR needs

Strategic business planning involves putting Human Resources protocols and procedures in place. You likely may not have hired HR managers, so describing how you plan to recruit and hire employees is a start.

It may also help if you address your plans for employee retention, since high turnover is undesirable and costly to any business. Showing financiers how you plan to maintain employee satisfaction can be vital to winning their trust.

Outline your legal structure

Another critical element of a business plan is to address legal issues, from taxes to liability concerns. Clearly show what your legal structure will look like. Provide details on limited or incorporated companies, partnerships, and proprietorships and consider having a trusted lawyer review all contracts and legal documents.

If you plan to purchase an existing business, consider having it produced and reviewed by proper buy-and-sell agreements for Canadian or international businesses.

Assess capital goods and premises

Capital goods are not for the consumer end but rather what your company requires to produce its products or deliver services. Investors and lenders may want to see what your capital goods needs are, including vehicles, machinery or IT equipment. You may also think about defining where you will conduct your business, be it in a factory, warehouse or an office space.

Outline key financial metrics

Penultimately, include key financial data. Expect to slightly adjust what information you provide depending on who is reading your business plan.

Write your executive summary

Consider including an executive summary. Keep the length of the summary to one page, at the most, and focus on highlights only. Be specific and as granular, reviewing the following elements:

• nature of your business, whether a new business venture, an expansion or a purchase of an existing business
• business and industry type
• target market and consumer
• unique selling point (USP)
• main business goals and company objectives
• management career bios
• realistic projections of timeframes and resources

Tips to remember when writing your executive summary

Here are some tips to remember for your executive summary:

• Be transparent; even if there are some financial concerns, it is best to be open and honest.
• Be confident but not overly boastful or unrealistic.
• When showing weaknesses in competitive analysis, show how you can improve on their potential disadvantages.

Organizing your business plan

A good arrangement for your business plan may look like this:

Simply follow these 12 tips and include all the elements described above to make your winning business plan.