Your Winning Strategy to Write a Business Plan: All the Key Elements for Startups and More

First of all, what is it?

A business plan is more than just a document; it’s a strategic tool that encapsulates your business concept, goals, and strategies in a comprehensive framework.

Essentially, it serves as a blueprint for your venture, offering clarity and direction by articulating your vision, defining objectives, and outlining strategies.

What’s more, is that it provides a structured approach to decision-making and resource allocation.

It isn’t meant solely for you; investors, partners, and stakeholders often rely on a well-crafted business plan to evaluate the viability and potential of a business- and that is the BEST visiting card, for them, to decide IF they will help you or not.

Simone Dongu

If you prefer, imagine your BP as a commercial fundraising campaign.

And If You Don’t Have a Business Plan… 

Whether your lack the expertise, willpower, or resources to build and write an effective BP, failing to do so is probably not in your best interest. Consider this: Investopedia reports that failing to write an effective business plan is one of the 6 biggest reasons businesses fail.

Here’s why. 

1. Lack of Direction and Focus

Without a business plan, entrepreneurs may find themselves navigating their ventures without a clear sense of direction or focus. You’re sailing without your compass.

A well-crafted BP helps define and pitch the purpose and goals of the business, providing a roadmap for decision-making and resource allocation.

Studies have shown that businesses with a clear plan are more likely to succeed and achieve their objectives compared to those without one. In fact, a survey by Palo Alto found that entrepreneurs who wrote a business plan were almost twice as likely to successfully experience

a) business growth and/or,

b) obtain capital compared to those who didn’t.

For the skeptics out there: analysts from the University of Oregon Department of Economics verified the survey’s results and concluded “writing a business plan correlated with increased success in every one of the business goals included in the study.“

2. Difficulty Securing Funding

CB Insights reported that 38% of small businesses fail because they either run out of cash or are unable to drum up more financial support. Meanwhile, research conducted by Babson College found that businesses with a written plan were more likely to obtain substantial capital than those without one.

Investors and lenders often require a comprehensive business plan before considering financing options. A business plan not only demonstrates the viability and potential of the business (because it first identifies your potential break-even point and outlines potential costs and risks), but also provides assurance to stakeholders that their investment will be well-managed and profitable. In your plan, you outline how your finances are to be managed, and you’re meant to abide by that.

Without a solid plan in place, entrepreneurs may struggle to acquire the trust of potential creditors, thus missing the opportunity to secure the funding needed to launch or grow their ventures. 

3. Ineffective Decision-Making & Missed Opportunities 

Research published in the Journal of Business Venturing shows the value of a business plan is especially valuable BEFORE market entry. That’s because it helps entrepreneurs avoid poor start-up creation. Further studies suggest that businesses with a formal plan are also more likely to make strategic decisions that result in long-term success.

Having a BP serves as a strategic tool for guiding decision-making and mitigating risks. By conducting thorough market research and financial analysis, entrepreneurs can identify potential challenges and opportunities, allowing them to make informed decisions that align with their goals and objectives.

When creating your plan, you use tools such as a SWOT analysis to assess the market’s environment and your business’s viability. This would lead to informed and effective decision making. It also helps you identify missing markets (and upcoming trends), and thus great business opportunities (and threats).

Without your plan, you miss out on these; entrepreneurs, in all their excitement and occasional delusion, are prone to hasty or uninformed decisions. 

The result?

Costly mistakes (both, financially and otherwise) and, often avoidable, setbacks.

What are the essential components of a business plan?

A comprehensive business plan typically includes a deck of several key sections. Each aspect plays a critical role in conveying your business concept and strategy. These elements may include:

Executive Summary (ES)

This section of your business plan is at the forefront. It’s an overview of your business concept, goals, and the strategies you’ll employ to achieve them. The ES is often the first section investors and stakeholders read, so it should be concise yet compelling. Learn how to write it well, or seek a professional to do it for you. 

Company Description

A detailed description of your business, including its mission, vision, legal structure, and core values. This part of your business plan provides context for your venture and helps stakeholders understand its purpose and direction.

Market Analysis

An assessment of your target market, industry trends, competitors, and potential opportunities and threats. Conducting thorough market research is essential for identifying your niche and positioning your business effectively. You may choose to utilise a pre-emptive SWOT analysis here.

Product or Service Offering

This is a detailed description of the products or services you’ll offer, including their features, benefits, and unique selling proposition (USP): the thing that makes you more valuable to customers than your competitors. Clearly defining your offerings helps investors and customers understand what sets your business apart.

Marketing and Sales Strategy

Here you outline your plan for promoting and selling your products or services, including pricing, distribution channels, and promotional tactics. A robust marketing and sales strategy is essential for attracting customers and driving revenue growth. It helps lift your ideas into reality by considering “how does a startup promote their products across different channels and simultaneously nurture their customer base?”

Financial Projections

Projected financial statements, including income statements, cash flow forecasts, and balance sheets. These projections provide insight into your business’s financial performance and help investors assess its potential for profitability, scaling and sustainability.

Funding Requirements

This is where you convey your funding needs (if relevant to the audience of your business plan). It includes how much capital you require, how you’ll use it, and potential sources of funding. It’s worth considering this section regardless of your stance on requiring investor support or not, because it gives you clarity on how to fund your startup to begin with. You may find holes in what was originally imagined. 

Management Team

Profiles of key members of your management team, including their skills, experience, and contributions to the business. Startups generally only have one or two key players at the beginning, so this section can be very simple. In this section, you would note the experience and achievements of your members to inspire confidence in investors. The goal is really just to demonstrate you’re capable and can execute business well. 

Legal Structure 

While this may already be in your company description, some industries may require an entire section. The legal structure of your business plan provides an overview of the legal framework within which the business operates. It outlines the specific legal entity under which the business is organized and registered, as well as the implications of that structure on various aspects of the business’s operations, ownership, and liability.

An Example of An Effective Business Plan’s Structure

For a new entrepreneur offering email marketing services:

Executive Summary	[Business] is an innovative email marketing services startup. Our unique proposition lies in offering comprehensive email marketing solutions coupled with convenient additional services like graphic design, web development, photo editing, auditing, and sales services. Operating remotely and online, we leverage platforms like LinkedIn, B2B tradeshows, and Medium.com to showcase our expertise and connect with potential clients. With a strong focus on crystal-clear communication using Sessions, our projected revenue of $5,000 in the first year reflects our commitment to delivering exceptional value to our clients while bootstrapping the business.
Company Description	Our startup specializes in providing holistic email marketing solutions tailored to the needs of small businesses. We are committed to helping our clients maximize their online presence and drive revenue through effective email marketing campaigns. With a remote and online business model, we prioritize convenience and accessibility for our clients, ensuring seamless communication and collaboration.
Market Analysis	The email marketing industry is experiencing rapid growth, fueled by the increasing importance of digital communication in today’s business landscape. Small businesses, in particular, are recognizing the value of email marketing in reaching and engaging their target audience. Our unique offering of additional services such as graphic design and sales support sets us apart in the market, providing added value to our clients and positioning us for success.
Service Offering	Our comprehensive services include: Email marketing campaign management (including contextual analytics that drive campaign conversion) Graphic design for email templates and promotional materials to be used across marketing channels (social media and website) Photo editing Auditing of existing email marketing strategies Sales strategies to optimize conversion rates This holistic approach enables omnichannel optimization by addressing all aspects of our clients’ email marketing needs, including the channels it overlaps with. It’s a powerful offering allowing for alignment across different marketing streams.
Marketing Plan & Sales Strategy	Our marketing plan focuses on leveraging digital platforms such as LinkedIn, B2B tradeshows, and Medium.com to showcase our expertise and attract potential clients. We also prioritize networking events and manual outreach to connect with small business owners directly, building relationships and bringing them into our sales funnel. Meanwhile, our sales strategy emphasizes personalized communication and exceptional customer service, leveraging tools like Sessions to ensure crystal-clear communication and a seamless client experience.
Financial Plan & Projections	Given our part-time commitment and bootstrap approach, our projected revenue for the first year is $5,000. This conservative estimate reflects our focus on sustainable growth and delivering value to our clients while effectively managing our resources.
Funding Requirements	We do not anticipate requiring external funding and intend to bootstrap our business through networking events and manual outreach. By focusing on building relationships with clients and delivering exceptional service, we aim to generate revenue organically and sustainably grow the business by implementing automations.
Management Team	At present, the management team consists solely of the founder, who brings extensive experience in email marketing and business management to the table. With a background in digital marketing and a passion for helping small businesses succeed, the founder is committed to driving the success of the startup and delivering value to our clients.
Legal Structure	Our business operates as a sole proprietorship, with the founder as the sole owner and operator. This legal structure provides simplicity and flexibility while offering limited liability protection for the founder’s personal assets.
Conclusion	In conclusion, our email marketing services startup is poised for success in the dynamic and rapidly growing digital marketing industry. With a unique service offering, a focus on exceptional customer service, and a commitment to sustainable growth, we are confident in our ability to achieve our goals and deliver value to our clients.

How To Effectively Write A Business Plan That Resonates With Stakeholders

Start with a Clear Ambition 

Before you begin writing your business plan, take the time to articulate your venture’s purpose and trajectory. Your organizational objectives must be clear (explore how to set clear business goals in this article).

What problem are you solving? What makes your solution unique?

Clarifying this will guide the development of your plan and ensure consistency throughout.

Tailor Your Plan to Your Audience

Consider who will be reading your business plan and tailor your messaging accordingly.

Who are you really servicing? Have you done your due diligence in customer research? What were the pain points identified? Where is the market gap?

While your ‘judges’ may have common goals, investors may be interested in financial projections and growth potential. Comparatively, potential partners may focus on your market positioning and competitive advantage. Customize your plan to address the specific concerns and interests of your audience.

Be Realistic Yet Ambitious

While it’s important to set realistic goals and projections in your business plan, you have the freedom to dream big.

Investors are often drawn to ambitious entrepreneurs with pioneering mindsets that can solve problems efficiently.

However, ensure that your aspirations are grounded in thorough research and analysis, demonstrating a clear understanding of market dynamics and potential challenges. You must understand all the relevant costs you can incur, and the potential opportunities available. (Psst! That’s why a SWOT analysis is so useful). 

Flexibility and Accuracy  

As your business evolves, you may find yourself seeking out further investment for different stages of the business growth, or presenting your business to a Board.

At this time, revise your numbers. Don’t reuse the exact same business plan as in the past. For example, in your applied strategies for marketing, sales and finances, ensure you measure and adjust the data as new, relevant information is obtained. This new intel ensures you’re able to overcome challenges, upcoming trends and thrive in the market.

Measuring Success

A business plan isn’t a document you just create once and never look back at once you acquire funding or backing.

You must regularly refer back to it and measure the reality of your business against the plan.

Simone Dongu

Your marketing and sales efforts must be measured and tracked, in order to accurately adjust your strategy as required. You can do so by obtaining and analysing web-traffic data, conversion rates across channels, customer acquisition costs, customer lifetime values (CLVs) and more.

Focus on Clarity and Conciseness

A well-written BP is clear, concise, and easy to understand. Hands down, clarity above all else. You think you don’t have the time to write one or read messages from your team?

Imagine what it’s like for investors.

Avoid unnecessary jargon, technical language and beating around the bush.

Instead, opt for straightforward explanations and compelling narratives. Use visuals such as charts and graphs to illustrate key points and make complex information more accessible. 

NOTE: unless you have a concrete understanding of what you want to achieve with your business, you won’t achieve this in your plan. 

Bonus (if you’re interested in securing funding from investors): 

Research published in the Journal of Business Venturing highlighted that visual cues such as product images and color in business plans greatly influence investors. Using product images works in your favor during investment screening decisions. (And avoid using red because it decreases your likelihood of obtaining a favourable screening.) 

Seek Feedback and Iterate

Don’t hesitate to seek feedback on your business plan from mentors, advisors, and peers. Of course, aim to seek feedback from qualified sources: people with experience in academia/legal industries, entrepreneurship and/or investment.

Constructive criticism can help identify blind spots and areas for improvement, ultimately strengthening your plan. Be open to iterating and refining your plan based on feedback while ensuring that it accurately reflects your vision and strategy.

Key Takeaways:

• You BP is a strategic tool that provides clarity, direction, and structure to your business idea, guiding decision-making and resource allocation from inception to growth.
• Clarify your ambition and conduct thorough research before starting your business plan to ensure your planned activities are coherent and beneficial to your existing and potential stakeholders.
• Your BP serves in articulating your business concept to potential creditors. It increases your chances of success by providing a roadmap for achieving your objectives and securing necessary funding or support.
• Failing to create a business plan can lead to lack of direction, difficulty in securing funding, ineffective decision-making, and missed opportunities. Without one, you are more likely to struggle and/or fail to grow compared to those with a clear plan in place.