I am spending this winter on Korcula island exploring different events on the Eventbrite platform that can further my efforts to become a successful entrepreneur and startup founder. Previously I attended an event by Founder Institute titled How To Identify a Viable Business Idea and Launch Your Startup. The next event in line was Master Your Business Plan for 2023 organized by Dorset Growth Hub. In this article, I will share my main takeaways from this event and dive into the topic of how to write a business plan.
Why you need a business plan
With data suggesting how 80% of entrepreneurs fail within the first 18 months it seems obvious that having a good business plan set in place should significantly lower your chances of failing. A good business plan helps you:
- Visualize your business idea and give it a ‘paper test’ before it’s up and running.
- Test your assumptions about the business idea. A business plan is a form of viability check.
- Do a reality check and answer the most important question – Can I make money with this idea?
- Determine how much money the business needs and how much it will make.
- Provide a clear, detailed roadmap for the future of your business.
- Identify the target market and the competition and develop marketing and sales strategies.
- Identify the key success factors and measure performance against them.
- Communicate the goals and objectives of your business to stakeholders, including employees, partners, and customers.
- Attract and retain top talent by providing a clear vision and direction for the company.
- Secure funding from investors or lenders by demonstrating the viability and potential of your business.
- Identify the key risks and develop a plan to mitigate them.
How to write a business plan
You may be tempted to outsource your business plan writing but it is highly recommended you do it yourself. Writing your own business plan allows you to fully understand and convey your business idea and strategy. It allows you to take ownership of your business and be invested in its success. Additionally, potential investors or lenders will likely want to see that the business owner has a clear understanding of the plan and is dedicated to its success.
A business plan typically includes the following sections:
- Executive Summary: A brief overview of the main points of the plan, including the business concept, financial projections, and management team. How To Write an Executive Summary With Example
- Company Description: A detailed description of the company, including its history, products or services, target market, and competitive advantage. How To Write a Company Description
- Industry Analysis: A review of the industry in which the company operates, including market size, growth rate, major players, and trends. How to Write The Industry Section of a Business Plan
- Market Analysis: A description of the target market, including size, demographics, and buying habits. How to Write the Market Analysis Section of a Business Plan
- Sales and Marketing Plan: A description of how the company will promote and sell its products or services. How To Write the Marketing Section of Your Business Plan
- Operations Plan: A description of how the company will operate on a day-to-day basis, including production, logistics, and supply chain management. How To Write the Operations Plan Section of the Business Plan
- Management and Organization: A description of the management team and organizational structure of the company. Writing the Organization and Management Section of Your Business Plan
- Financial Projections: A projection of the financial performance of the company, including income statements, cash flow statements, and balance sheets. How to Write the Financial Section of a Business Plan
- Appendices: Supporting documents, such as resumes of key team members, letters of reference, and market research data.
The lecturers gave us a link to business planning templates. This is a good place to start developing your business ideas and organizing your thoughts.
Common mistakes when writing a business plan
The biggest mistake is not writing a business plan and having someone else write it followed by:
- Writing about yourself, not a business
- Not including crucial details – who, what, where, how
- Writing too much
- Overvaluing the business idea
- Confuse cash with profit
- Having too many priorities
- Not researching the competition
- Being overly optimistic or unrealistic in financial projections
- Not conducting thorough market research and not fully understanding the target customer
- Not clearly defining the company’s unique value proposition and competitive advantage
- Not providing enough detail on the management team and their qualifications
- Ignoring potential risks and not having a plan to mitigate them
- Not formatting the plan professionally, and making it easy to read
- Not regularly reviewing and updating the plan as the business develops.
Workshops that I have been attending this winter through the Eventbrite platform are really game changers for me living on a Croatian island. Although I mostly attend those that are free to attend I have to say they do not lack in the quality of leaders and lecturers. The information I get through these workshops is helping me to understand the world of startup business better and empowering me to venture on the same journey once I’m ready. And it all starts with a solid business plan.