The 8 steps to make a business plan

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Step 1. Write your executive summary

This step is crucial! The introduction to your business plan should make your readers want to continue beyond this introduction.

Incisive and catchy, this summary should be enough to convince your readers (and perhaps future investors) of the interest, feasibility and profitability of your business project.
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This first chapter of the business plan, often called “executive summary”, must attract the attention of your reader to make him want to learn more about your project:

  • Start with a summary of the items you are going to present.
  • Introduce your business in a brief and concrete style.
  • Include the main information on a maximum of 3 pages, from administrative information to the market situation, including the commercial offer you are proposing.

In practice, the reader seeks answers to specific questions relating to the activities and projects of the company, namely:

  • What product/service is it?
  • In which branch of activity does the company want to start?
  • Who are the stakeholders?
  • What is the commercial vision of the project?
  • What is the growth potential of the market?
  • What resources are needed (human resources, logistics, storage facilities, IT solutions, equipment purchases, commercial premises, stocks, etc.)?
  • What are the financing needs?
  • What are the risks involved?
  • How long will it take to break even?

Tip: this part should appear from the start of your growth midnset, but it will be much easier for you to write it after your strategic thinking and budget projection work.

Step 2. Add your company and teams presentation

This second chapter is a portrait of the company which should enable the reader to understand the main stages in the history of your project. In a few pages, your business plan should explain your business idea globally, its genesis and its development prospects.

It is also an opportunity to explain the structure of your company, the background of its managers and employees, their legitimacy in the sector, and their contribution to the project:

  • History: seniority of the project / of the company and stages of development
  • Legal structure: whether you choose a EURL, a SARL or an SA, be sure to explain your choice well so that your reader understands its suitability with the characteristics of your project (activity, desire to join or not, capital contributions …). Small Business Coach advises you on the legal form best suited to your particular case.
  • Shareholding: breakdown and details of shareholders: are they legal entities or natural persons? Be sure to explain the reasons for your choice in terms of capital organization.
  • Location: choosing the location of your business
  • Management team: detail the profiles of the management team, highlighting the know-how and skills of the people involved in the service of your project. Also remember to explain how you want to structure and organize this team so that it is operational.

The purpose of this chapter is to reassure investors about the competence of the staff, the consistency and the complementarity of the teams, and therefore the feasibility of your idea.

Step 3. Present your products and services

After presenting your business, it’s time to dive into the presentation of your products and services. This section may include:

The description of your products / services: you must present your range of products and services, the different stages of design and possibly the prototypes. Be sure to explain how your product meets your customers’ needs and how it differs from your competitors. It’s about articulating the problem your targets face, as well as the solution your business offers.

Intellectual property: this applies particularly to technological or scientific companies. If you have an asset specific to your business that is critical to your success, you should feature it in the product development section. Indicate if you are the owner of patents or trademarks, or if you are in the process of filing…

Step 4. Lay out your marketing plan

Your project is innovative, but it still has to meet a real market need!

This chapter allows you to demonstrate the relevance of your idea and explain how it responds to effective consumer demand.

To make a success of your business plan, you must start from statistical elements of your market research or field observations. The document should present concrete answers to questions from investors on the following points:

  • Your customers: are you B2B or B2C? Who are your target customers? How do you plan to reach them? What is their budget for the type of products you want to offer?
  • Your competition: who are your direct/indirect competitors? How do you intend to differentiate yourself? What are your strengths and weaknesses compared to your actual and potential competitors?
  • Your niche/industry: Give the reader an overview of your industry. Describe its size, past growth, future growth predicted by industry leaders, and other important trends and characteristics.
  • Barriers: Be sure to include any market entry barriers you may encounter. It can be regulation, changing technology, high capital expenditure or lack of qualified personnel in the field…
Step 5. Structure your commercial offer

This part allows you to explain how you plan to respond to demand by detailing the commercial offer you wish to put in place. For this important section of the development of your business plan, you can ask yourself the following questions:

  • What products/services do you want to offer?
  • At what price do you intend to offer them?
  • What volumes do you think you can produce/sell?
  • What margin do you think you can make?
  • What is the marketing strategy that you will develop?
  • Through which distribution channel do you think you can develop?
  • How do you intend to communicate around your offers?
  • How will you organize your production? Your deliveries? Your supplies?

Once you have thought about these questions, you will have all the cards in hand to design your Business Model.

Step 6. Determine your organization chart

This part includes an organizational chart of your business that shows how your business is structured. It will also show that you know who manages every aspect of your business.

Ownership structure: You have already mentioned this in your business presentation, but you can dig a little deeper into the ownership structure of your business. Explain who owns what and in what proportion.

Hierarchical structure: present an organization chart of your structure, specifying the skills, experience, roles of each member of the management team and their levels of responsibility. Also specify whether or not your structure has middle management. Finally, don’t forget to introduce the advisors around you to give more credibility to your file.

Need for Hiring: If you don’t have enough staff on your team right now, you’ll probably need to reinforce it in the future. List the key hires you will need to make to achieve your goals.

Step 7. Integrate your financial data

Usually considered as the last chapter of a business plan, this part includes all the figures relating to your project. The financial planning must give your interlocutors a precise state of the economic situation of your project.

This chapter must unfold your various financial projections in the form of graphs and tables, each time accompanied by explanatory notes: provisional budget, provisional cash flow plan, estimate of the commercial margin, estimate of the break-even point of the project, etc.

Your projected budget: includes all inputs (sales forecasts) and outputs (investments, purchases, overheads) for the coming year. As part of a business plan, you will generally be asked for your provisional budget for the next 5 years.

Your provisional cash flow plan: is an essential component. It must be presented in the form of a table and indicate each month the volume of liquidity necessary to fill the gap between your outflows and your cash inflows.

Your commercial margin: also called gross margin, it gives you the difference between your turnover and your purchases consumed.

Other Ratios and financial indicators of the business plan: other ratios and financial performance indicators can help you plan your activity, make your business model understood by your interlocutors and convince them of the solidity of your project. In particular, you can consider presenting: the break-even point, the operating margin rate, the working capital requirement, the gross operating surplus, or even the self-financing capacity.

Step 8. Finish with an appendix

The appendix is ​​usually the last section to appear in your business plan. Although not mandatory, a well-structured appendix can help convince your reader that you have an excellent business idea and that you have thought through your project well.

The appendix to a business plan can include any additional documents you want to use to clarify to your reader about your product, marketing plan, services, etc.

This is also the right place to add any additional charts or graphs that you did not want to put in the content of the plan, but which you think can help your reader better understand your business idea.

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