When you are writing your own business plan for the first time, learning how to write a business plan step by step is not as painful as it sounds. As long as you have the right tools.
In fact, for entrepreneurs who have never written a business plan before, it can seem like a really big project because there are so many ways to get started. There are templates and guides out there, plus software options, not to mention firms who can do it all for you.
Yes, Written Success is one of those firms, BUT this post is not about that. If you would like to contact me to do your business plan for you, stop reading now and feel free to reach out!
This post focuses on inexpensive help options that you can use right now, even on a really tight budget. In this post, I will share with you:
- 2 Affordable Options for Knocking Out Your Business Plan Quickly
- 5 Tips for Finishing Your Business Plan
Written Success is a proud affiliate of many startups and businesses, including those mentioned here. As you explore each affiliate linked below, note that my company may receive a commission for referring you to their services if you decide to become their customer.
I only recommend products, tools, services, and learning resources that I believe to be genuinely helpful. That being said, if you have a negative experience with an option I recommend, please feel free to reach out to let me know!
Read on, entrepreneur!
2 Affordable Options for Knocking Out Your Business Plan Quickly
Option 1: “How to Write an Exceptional Business Plan” Book & Template Kit
Option 2: LivePlan Online Software
LivePlan is a great option because of the price point. While it can cost more than a book, depending on what package you buy, it is still extremely affordable compared to hiring a firm to do it for you. Plus, they offer a money back guarantee. So if it isn’t worth the $10, then you can rest easy that you can change course without risk.
Now, no matter how you move forward, you need to write the right content for your business plan. The next part of this post dives into the 5 tips to help you plug the best words into your business plan, whether you are using a template, a software, or are jotting things into a notepad for now!
5 Tips for Finishing your Business Plan
Usually starting a business plan is not the problem. The trouble comes with finishing. This is because there are key sticking places where most entrepreneurs feel unprepared. Often, these sticking places are:
- The bio section
- The competitor analysis section
- The sales goals and price points
- The costs and operational expenses in the financials section
- The cover letter (if you plan to show this to other people)
The following will get you past these sticky areas with some professional rules of thumb! And at the end of the post, be sure to download the bonus tips on the 3 steps to do before you write your business plan.
How to Write a Business Plan Step by Step
Step 1: Start with you
When writing your business plan, the place I always recommend starting with is your own bio. In the Management Team section of your business plan, you should have no more than 250 words (aim for under 200 if you can). In this section, describe your role in the business and how your background will make the business a success. Do not just copy and paste your resume here. Sell yourself, feel free to brag on yourself a bit. You need to show exactly why you are the right boss for this business, and if you are confident in your abilities, it will shine through your words.
It is important to use powerful, memorable language when describing yourself and the founding team of your business.
This should be the easiest section for you to write and can get you amped to move onto the rest of the business plan.
How to Write a Business Plan Step by Step
Step 2: Scope out your top competitors
You already know who they are and what they’re doing wrong. Those competitors are why you have a great idea to begin with! List them out, include their addresses and public reviews on Google, Facebook, etc. Make a chart of their prices and make a T-chart of where they are failing and where they are succeeding.
If you have more than 10 competitors, only include the details of the first 10 in your main business plan. List out the rest of them in an appendix. This makes the business plan easier to read through.
***If you have a “new” business, something that’s truly never been done before, you will have a harder task. This is especially true if you are planning to use your business plan for funding. Any new business needs to triangulate different parts of its business that are similar to existing businesses. No investor or lender will like to hear you say “My business is 100% unlike any other business.” They want to see you are being honest and realistic. They want to see you actually putting in the work to understand your market and learn lessons based on successes and failures from related businesses.
The process of running a business is going to be similar to something that has already been done before. Try to draw parallels even if another business or product is different than what you are doing.
The competitor research and market research are often the hardest parts for people. Just take it a step at a time and try not to let it overwhelm you.
How to Write a Business Plan Step by Step
Step 3: Target your price point
When people wonder how to write a business plan step by step, often the real question is about how to do financials. I do have other posts that go into this in more detail, but to start with the absolute first step, consider starting with price.
Once you have your competitors and their prices, you have a place to benchmark your own prices based on value and market tolerance for a new entrant. What does this mean? Simply, think about what value you are bringing, and how much more or less a customer may be willing to pay for your offer compared to the competition.
Pricing strategy is a data-driven activity – be very careful not to “go by your gut”. There are actually several approaches you can take, so research the right pricing strategy for your business type.
***You may be wondering why I advise to focus on price before you review costs. Most businesses should not be using a “cost-plus” strategy. The customers won’t care about your costs – they care about value. Focusing on costs instead of market price can be one of the most devastating things a business can do, so try to keep cost and price independent from one another in your strategy planning.***
How to Write a Business Plan Step by Step
Step 4: List your costs
This is a complex topic that seems simple at first. At the heart of every business plan is the financial pro formas. The quality of the numbers is always heavily weighted on cost assumptions. It can be extremely easy to under-project costs and one way to buffer this is to add a 20% contingency across the board to all costs.
Cost is something even the best-intentioned entrepreneurs get wrong. For example, I was supporting a strategy session for a client who wanted to test a location for a new outdoor eatery. He said he would simply sell snow cones out of a small building and see if he generates any interest before he dedicates to starting the eatery. “It’s ice and cheap syrup, my margins will be amazing and I can test the spot without actually doing the full eatery” he told me.
I challenged him to map out both scenarios. Together, we listed the costs for the snow cone stand and then the costs to do the eatery.
Long story short, it would be exactly as expensive to do the snow cone experiment since he would need the land, a structure, permits, a marketing budget and sales strategy. The only difference was cost of food. However, since the snow cones would be priced cheaper than the eatery items, it would actually take longer to recoup the costs.
Bottom line: do not assume. Map the scenarios out.
There is another thing I want to really make clear that will help you avoid the biggest problem people have with business plans.
Do not be okay with not knowing something. Avoid guessing wherever possible. If you do not know the cost of something, please look it up and only leverage credible sources. I promise the answer exists somewhere, in some form.
For example, did you know that there is a government website that shows you the average cost for different utilities by business type and state for brick and mortar businesses across the country? Information like that is extremely important for any brick and mortar business plan. It is even more important if you are trying to prove to investors or lenders that you’ve done your homework.
Want to make money with an app? Did you know there’s a way to predict conversions on an app if you are looking to launch in the US?
There is a ton of gold nuggets like these out there that answer exactly what you need to know so you can build a solid business plan and great financials. Getting the information isn’t your problem: knowing where to find it is the issue.
Even within the same industry, you will see completely different business plan requirements for similar businesses. For instance, a hand car wash and detail will have a totally different business plan than an automatic car wash or a conveyor car wash. Yet, one business plan “template” has the same instructions no matter the business.
This is typically the first moment when entrepreneurs see value in hiring an expert to help with their business plan. Especially if the plan will be used for funding.
How to Write a Business Plan Step by Step
Step 5: Start with a Persuasive Cover Letter
Knowing how to write a business plan step by step is often something you can’t know until you go through it at least once from beginning to end. This is why the most experienced business plan professionals will tell you the most overlooked step is creating a killer cover letter. Your business plan layout, feel, and professionalism will all be judged at this step.
If you are using your business plan for funding, you need this step. Most first-timers miss the fact that a business plan for an investor or bank always starts with a great cover letter! You need a cover letter that:
- is easy to read
- lays the framework for your business plan
- explains WHY you are worthy of getting funding
- should be written in persuasive business writing format
I hope you found this to be helpful! From one entrepreneur to another, congratulations on your success thus far, and stay positive. There are great things ahead, and your business plan is the gateway to making it all happen!!
