Business Planning Process: Everything You Need to Know
The business planning process should envision your business's immediate and long-term goals. 3 min read
Why Is it Important to Develop a Business Plan?
A business plan will serve as a guide for management to run the company. Planning will help avoid problems that can arise from cash shortages, inability to meet customer deadlines, or too few employees. Before planning for the future, companies need to look honestly and critically at the current state of their business by assessing where the company's strengths lie and what needs improvement.
How to Begin the Business Planning Process
To start the business planning process, ask yourself where your business is currently and where you want it to go. A clear vision is the starting point of the business planning process. From there, the process breaks down into more detailed steps.
Develop a Pitch
Start the business planning process with a pitch, which gives a simple outline of your business strategy.
Your pitch should include:
- Your main proposition
- A summary of the problem you are solving
- Your solution to this problem
- Description of who your target customer is
- An overview of who your company's competitors are
Research Your Market and Products
When you have defined your vision, begin researching products and your target market to help you better understand your business and your potential customer base.
Create a Company Bio
Create a company bio to include in your business plan that highlights your company's core mission and values. Answer the question, "Why did you start your business?" Include bios of personnel underlining their experience and expertise, and how they collaborate as a team to run the business.
When you've built a strong identity, you can incorporate this same text into funding applications, materials that you distribute about your company, and your company's website.
Outline Your Business Model
The basic business model should be laid out in four to five paragraphs that clearly explain how your business operates on a daily basis.
This section should outline the following:
- Your products or services
- A profile of who your customer is
- How your business plans to make profits
Create a Basic Marketing Plan
Include a section in your plan document outlining how your company will market itself to bring in new clients or customers. The first strategy that entrepreneurs use is typically paid advertising. However, in this day and age you should consider exploring other strategies, like referrals, word-of-mouth, mailings, and email blasts.
Prepare Your Business's Financial Projections
A section outlining your financial projects is an integral part of your business plan. Keep these projections fairly conservative, especially in your company's first fiscal year. Consider how you expect revenues to pay for company costs and allow for room for growth in the future. Base all financial projections on concrete assumptions, using data to support your projections.
Draft a Document
With your financial projections in place, it's time to actually draft your business plan. After having conducted the research, the drafting process should be fairly easy to fill in.
Set Goals, Track Progress, and Make Adjustments
Assign different tasks and responsibilities to keep track of and manage progress, and to create accountability among your staff.
A monthly review of your progress and strategy is crucial to checking in on your business's progress, tracking your goals and changing directions should things not go as planned.
Develop Your Executive Summary
Often, investors will ask for an executive summary rather than your detailed business plan to get a feel for what your company has to offer.
It's best to write your executive summary last since you'll be able to highlight the essential details of your business plan and exclude the minutiae.
Edit and Proof Your Final Document
To make sure that your plan is straightforward and easy to understand, proofread, and edit your final document. For this step, also hire a professional copy editor to check formatting, proof, and edit your document.
Keep the design of your document professional to give a good visual first impression to potential investors and employees.
Finally, refine the pitch you created at the beginning of the business planning process before presenting to investors.
If you need help with your business planning process, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.