How to Write the Perfect BUSINESS PLAN


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Welcome to the ten minute MBA. I'm your host, Scott Dclary. On the ten minute MBA I give you actionable insights, tool, strategies techniques that you can use to start, scale, grow or N X Your Business. Today I'm going to give you a high level overview of what you need to do to write a highly effective business plan. Why do you need a business plan? Well, a business plan will help you build a business. It is what is required to help organize your thoughts, as well as if you want to get anyone else on board, if you want to go raise money, having a business plan is key and, ultimately, even if you aren't going to raise money, a business plan really helps you look into the future and predict outcomes for your business. It's not a crystal ball, but it will help map you out a path from where you currently are and where you're headed. It will help you estimate your total startup costs. It will help... project revenues and profits. It will help you convince investors to invest if that's the route you want to take. It will help you be competitive from the start. It will help you and dissipate any challenges that you may have and, most importantly, it's going to keep you on track. It ensures that you focus your attention on the right things and helps you avoid mistakes that could totally sink and kill Your Business. So I'm going to walk you through, step by step, some of the items that you should have in a business plan now, just before we dive into this. Unfortunately, many business plans are wildly unrealistic. The initial excitement of starting a business often causes entrepreneurs to massively overestimate how successful they'll be and underestimate the challenge is the encounter. In order to be effective, a business plan needs to be realistic. So before you launch, you want to be relatively confident that you have a good chance of succeeding, which means that you have to be honest with yourself about the expectations that you're setting, the projections that you're setting, so on and so forth. In many ways, a business plan should help you decide whether...

...or not your idea will pan out. It's possible that you may want to put together Your Business Plan before you actually try and take a product to market, because you can realize, as you're mapping this out, as you're strategizing, that perhaps the potential outcome isn't as great as you initially thought, and that's okay, and it forces you to go back to the drawing board, but it will force you to take the necessary time to do the market research, analyze your financial needs and map out a proper strategy for the future. Don't look at a business plan as a thing that's preventing you from getting started. View it as building a foundation for a successful, lasting business. So these are the parts that you have to have, and I'm not going to go into too much death because again ten minutes. But to start off, you have an executive summary. So this is the First Section of the business plan. It gives people a general sense of what Your Business is all about, what products are, what services you provide, where you've been, where...'re headed. There are six things that you should have in a business plan and you should start to introduce these six things in your executive summary. Number One, mission statement. Number two, general information, such as founding date, names and roles of founders and other important details. Number three, company highlights, including financial successes and other key successes. Number for products or services that you sell. Number Five, financial information, including funding goals, current sources of funding, revenue, etc. And then number six future plans for the business. So, if you're going to be summarizing these things, think of your executive summary like a detailed elevator pitch. It highlights the most important point of your business without going into all the details, and you may actually want to consider writing your executive summary after you've written the rest of Your Business Plan. That way you're more familiar with the relevant information. Now, after your executive summary You have your company overview. This section provides more detail regarding...

...exactly what your business does and how its struct shirt. You can start by explaining the industry your in, your primary customer base, the big problem that you solve for customers how you solve that big problem. Essentially, you're explaining the reason for your businesses existence. You're identifying a specific customer need in a specific market and then clarifying exactly how you'll meet that need. The overview section functions as your unique value proposition. Remember that term. It clearly and concisely explains the unique value that your business offers. If you're struggling with this section, try to answer the following questions. Who Do you serve? How do you serve them? You see if you can answer these questions, then you know your unique value proposition and that's going to carry you through as you eventually take your product to market. Next section would be a market analysis. The market analysis section of Your Business Plan provides in depth information about your industry, your specific market and the competition. If this section is done properly, it assures readers that you know what you're getting into, and your market analysis seek... include the following information key industry size, growth trends and other really important details. Target Market data, ideal customers, their specific needs and demographic details. Target Market Size, yearly amount spent, purchase frequency, projected growth, market share, potential percentage of target market you can acquire, potential barriers to entry, things that might make it difficult to succeed in the target market. A competition, top competitors, market share strengths. These are the things that you have to include when you're doing an in depth analysis. This section will take a significant amount of research, but it's time well spent. First and foremost, it prepares you to succeed. Second, it helps investors know that you've done your due diligence. Next section would be the organization and management. First spell out the general structure of Your Business, both in organizational terms and in legal terms. In this section, for example, where does each key stakeholder fit into the bigger picture of Your Business? Include an organizational chart.

This could also be called a cap chart or capitalization table or a capitalization chart. It shows who owns what, how many cofounders, how many equity percentage, equity share, so on and so forth. And then, in terms of your legal set up, are you an LLC and s Corp, a Sea Corp, a General Partnership, a sole proprietor? How have you set up Your Business? After that, you want to describe the background of your key team members. This part is especially important if you're seeking funding, because investors want to know that you have experienced, successful individuals who can ensure that your business also succeeds. And finally, you want to describe any key hires it will be necessary. This may not be immediately relevant, especially if you're just getting started, but it will matter much more as you grow and expand. The next section will be products and services. This section explains exactly what products or services your business will provide the customers. Start by describing your particular product or service and the specific need it will meet. It's really important to clarify exactly how your product or service will stand apart from the competition. Within...

...this section, you should also discuss the product or service status. Is it ready to take the market? Development Objectives, for example? If it's not ready to go, what steps need to be taken to get it ready to go? Proprietary information. Do you have any intellectual property, patents or proprietary information? That is essential to the success of Your Business? And supply chain. Do you depend on any suppliers or vendors? Have you set up those relationships yet? Do you know what that looks like and make your product or service really shine? In a section, it should be abundantly clear both to you and to the reader, that you have something unique to offer and that you're in a prime position to attract customers. Next section would be your marketing and sales. This section explains how you're going to get your product or service into the hands of customers. Your objective in this section is to make clear both how you will make customers aware of your product or service and how you'll convince them to buy it from you. The first element in your marketing plan needs to be the position your product and how you are positioning your product in...

...relation to your competitors. Will you position yourself by offering lower price, superior quality, Superior Service? What is your differentiator or your remember unique selling proposition? Next, discuss the specific promotional methods you're going to use to get the word out about your product or service. Additionally, clarify the metrics you'll use to evaluate whether or not your marketing efforts are working, for example, leads generated, social media, reach, website visitors. And after you've laid out your marketing plan, then discuss your sales plan. What method will you use to convince customers to buy from you? Cold calling, in person, meetings, Webinars, setting up funnels? And then, lastly, who's actually going to be doing the selling? Do you need a sales force? Is it ECOMMERCE? Who's going to train your team? How big will your team be? Are you going to sell the first million dollars in revenue as a founder? Lay Out the budget for your sales and marketing. This will help readers gage the scope of your efforts and possibly your potential results and funding or sales required to keep this machine growing. After your sales and marketing focus on your... projections. This is the next section. In this section, you want to paint a clear picture of your businesses current financial status, well also mapping out where you hope to be in the future. Investors will closely examine this section to determine whether they want to give you funding. If you've been in business for a while, include as much financial data as possible, including income statements, balance sheets, cash flow statements, operating budget, it's account receivable and payable statements, if appropriate, documentation of any debt you're carrying any other investments that have been made. Your financial projections for the future will either be based on your past data or industry and competitive research. If you don't have past data, if you're not sure how to create these projections, consider hiring an accountant or financial advisor to help you. The next section would be your funding requirements, and this obviously only applies if you're actually looking for funding, but in this section you'll lay out exactly how much funding you need over the next, say, five years explain how you're going to use the funding to... achieve your goals. If you're going to include this section, make sure you include the following details. The amount of funding you need right now, funding you'll need down the road for up to five years, type of funding you're looking for, loan, investment, etc. And the terms your requesting for the funding. So how much equity are you willing to give up, for example, or options or revenue share? Additionally, explain how you will be using the funds. Will you be acquiring inventory, paying down a debt, hiring employees? It is critical to lay out your future financial plan so that investors have a good idea of what they're getting into. They need to know exactly what they're going to be investing in so that you don't have a tumult and investors feel like they've been lined to or bamboozled. So as much as possible, you also want to make sure that you're customizing your funding request based on who you're talking to. So, if you're asking a bank, provide them with every payment plan. If you're asking an investor, give them an estimated at Roy. And then, lastly, to wrap all this up, you need an appendix that basically contains all of the supporting documentation and information...

...that will substantiate what you've written in all the previous sections. In this section, you may want to include credit histories, permits, product pictures, legal documents, licenses, patents, contracts. In all the previous sections you're trying to paint a compelling picture of what Your Business is like and where it's headed. You want to provide the reader with enough data to help them grasp your vision, but not so much as you bog them down. So the appendix allows you to provide extra details to the reader without disrupting the overall business plan review experience. If the reader is serious they want to look at these details, they can simply refer to the appendix and that, in Summary, is a business plan. Each one of these sections we could probably do an entire ten minutes segment on, but this will get you started. Remember any business questions that you have. Don't worry, I got you. This has been another ten minute MBA. That's it for tonight. I will see you tomorrow. I will see you tomorrow.

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