In this guide, we’ll look at the essentials of how to write a business plan. We have also included a simple business plan template that you can customise to your business.
What is a business plan?
A business plan is a document that provides a detailed explanation of your company and how you plan to grow it. It typically contains the following:
- Description of the business,
- Business goals,
- Marketing and sales strategies, and
- Financial forecasts.
A business plan is essential if you’re asking the bank for a loan. It also helps you to track your progress and clarify your thinking. Importantly, it should evolve with your company and be updated regularly.
The essential elements that make a business successful are largely the same in any industry. You need a unique selling point, a good grasp of your target market, and sensible financial forecasts. Whether you sell air conditioning in Abuja or run a nightclub in Nairobi, a good business plan contains the same basic elements. But yours will be unique to your business and target market.
What’s the difference between a business plan and a business proposal?
A business plan describes your company, what you do, and outlines your growth plans. In contrast, a business proposal is a document that you present to clients explaining how you will complete a specific project for them. It tells them why your company is best placed to do the project and provides a quote for your services.
Write your business plan in six easy steps
Here’s how to write an effective business plan in six simple steps:
Define your unique selling point
What makes your business special? Is it your location? Something only you can do? An ingenious idea that no one else has thought of? That’s your unique selling point.
Research your target market
Before you launch, answer these questions: Who would be interested in your idea and how much are they willing to pay for it?
Conduct competitor research
Who are your competitors and how do they position themselves? How can you make yourself stand out? Do online research and visit the neighbourhood where you plan to open a store to assess the local competition.
Estimate your costs and profits
Work out your expected costs, including rent, salaries, electricity, tax, and equipment. Then, work out what you need to charge if you want to turn a profit.
Without a target, you have nothing to aim for. List three to five specific, short-term goals for your business. These could relate to profit, hiring more people, or opening new stores. You should also set longer-term goals.
Create a ‘living’ document
Once you have compiled this information, you now need to turn it into a ‘living’ document. This should be updated as your business evolves.
Business plan template
Here is a simple business plan template to follow when writing your plan:
Include the name of your business, its address, logo, website, and contact information.
This is a short description outlining what’s in the document.
Aim of the business
Describe your business’s purpose, in half a page. What do you do or sell, who do you help, and how?
Drawing on your market and competitor research, describe the opportunity you have identified. In half a page, outline who you think would buy your product or service, and how you are different to the competition.
Business growth plan
Explain, in one page, how you will market and sell your products or services.
Financial goals and planning
Describe your business’s financial goals and how you plan to achieve them. Be transparent and realistic. This will help you avoid disappointment, save money, and gain investors’ trust.
Include any extra financial data, results from your market research, and other relevant information.