How to Write a For-Profit Business Plan

Some say writing a business plan does not guarantee success in your business. Others say a business plan is reserved only for the entrepreneur who needs to secure funding. We think every business needs a well-thought-out roadmap to become a successful venture. 

A business plan helps you to plan, organize and execute your ideas for growth. Whether you’re an aspiring entrepreneur or an established business owner looking to expand, a carefully crafted business plan is your blueprint for success.

Writing a business plan often appears demanding. This guide will show you exactly how easy it can be.

Note: Because 8 in 10 businesses are established with profit in mind, this guide will also cover all you need to know if you’re writing a for-profit business plan. We also use the phrases “business plan” and “for-profit business plan” interchangeably.

What is a For-Profit Business Plan?

A (for-profit) business plan is a comprehensive document that outlines a company’s goals and objectives, operational plans and strategies. It serves as a roadmap detailing how a business intends to achieve its objectives and succeed in its market or industry.  

A good business plan must have a well-structured plan of the company’s present status, current needs and expected future.  It must be well-conceived to make investors impressed with your business.

A recent report shows that more than 30% of entrepreneurs who do not have a business plan do not survive after the first 3 years of operation. Businesses with a strategic plan survive for more than 5 years. 

This shows that having a solid business plan will have a positive effect on your business and longevity.

Why Do You Need a For-Profit Business Plan

A for-profit business plan is not only a roadmap to creating a successful business, it also acts as a guide to persons who want to know about your company. Businesses with a plan have higher chances of getting funds than those without a plan.

Some other reasons for needing a business plan are:

Strategic Planning and Clarity

Compared to a compass, a business plan guides you through the intricacies of your business venture. It urges you to define your business goals, and missions and strategies put in place to achieve them. Planning out your strategies gives you a clear understanding of where your business is headed and how to navigate potential challenges. 

Evaluating Ideas

Human minds are full of ideas that can cluster together which when not properly managed can be damaging. A business plan helps you to focus your time and energy on the ideas that are achievable with higher success rates.

Securing Funds and Investment

For startups and businesses seeking financial support, a robust business plan is non-negotiable. Potential investors, banks or venture capitalists require a detailed overview of your business model, market analysis, financial projections, and growth strategies. A well-crafted plan enhances your credibility and increases the likelihood of securing by showcasing the viability and potential profitability of your business. 

Risk Mitigation and Decision-Making

Through meticulous market research and a thorough understanding of your industry, a business plan helps identify potential risks and challenges. By anticipating obstacles in advance, you can develop contingency plans and strategies to mitigate these risks. Additionally, having a documented plan facilitates informed decision-making, empowering you to adapt to market fluctuations and changing business landscapes. 

Alignment and Communication

A business plan acts as a communication tool, fostering alignment among team members, stakeholders and partners. It ensures that everyone involved understands the business’s objective, strategies and operational processes. Moreover, it serves as a reference point for evaluating performance and ensuring that all efforts align with the overarching business goals. 

Steps to Writing a Good Business Plan

Drafting your ideas on paper is different from writing a good business plan. There are various steps you need to take to create a comprehensive business plan that summarizes your company at a glance. These important steps include:

1. Drafting an Executive Summary

The gateway to your business plan, the executive summary succinctly encapsulates your business’s essence. It outlines your company’s mission, product or services, target market, unique selling proposition and financial highlights. Despite being placed at the beginning of your plan, many experts recommend writing it last, as it encompasses a summary of the entire plan. 

In most scenarios, businesses often write the business summary as an overview. An overview tells you all you need about a company, its mission, vision and core values. It ought to answer some basic queries about your company such as: 

• Who you are.
• What does your business do?
• What are you selling or services rendered?
• What benefits will your product/services be to your customers?
• What are your marketing plans and strategies?
• Your current financial status?
• What is your future projected revenue?

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2. Write Company Description

Here is where you give a detailed description of your business. Define your industry, what services your business offers and who is your target market. Identity problems related to your business and the measures your business takes to proffer solutions to these problems. 

Define your products, their benefits and how they differ from that of your competitors.

Share your work experiences, both in the past and present, and the drive behind your business success. 

Also, talk about your team’s expertise, and how each staff member contributes to the success and growth of your business. Include your legal structure, history or any other important aspect of your business that makes your business advantageous over others in your industry.

Brand’s Core Values

Your brand values should orbit around how you want your business to be perceived by your clients, associates, partners and investors. How committed are you to achieving your goals? Are you reliable and determined to accomplish your goals?

Mission and Vision Statement

Your mission statement should clearly explain why your business exists. It is usually summarized in a single sentence.

Vision Statement clearly shows the impact you have envisioned your business to have globally. Beginning your assertion with “We will” adds a touch of personalization. Your vision statement can be more than one sentence, though, certainly, the shorter the more memorable.

3. Conduct Market Analysis

Conduct a thorough analysis of your industry, market size, trends and competitive landscape.Choose the right market for your product, follow the industry trends, and know how the product is perceived in the industry and the right time to make key decisions such as product launches or new projects.

Market research and analysis is an important section of your for-profit business plan. It should give an overview of your business position in the market, how big you estimate the market for your product and the competitive landscape. 

When conducting marketing market, you need to check:

• How big your potential market is – this involves knowing the statistics of people who have an interest in your product, demographics, their interests and shopping habits. This can be achieved by running a survey, looking through government data, academic research industry associations etc. Be up to date on market trends by looking at Google trends or trade publications and using these data to make calculative guesses and informed decisions on your market. 
• SWOT Analysis – this determines your business’s strengths, weaknesses, opportunities and threats. The strength shows the areas that your company is striving at and opportunities that if carefully utilised will benefit your company. Likewise, it also shows your company’s weaknesses and threats which can be internal or external. Best to identify these four aspects of your business and how to use them to modify your business.

See a sample of a SWOT analysis template by Strategy State

4. Organisation and Management

Introduce your organizational structure. Detail the key members of your team, their roles, and their expertise. Highlight any skills gaps and how you plan to fill them. Clearly state if your business is a corporation, limited partnership or sole proprietorship.

Ensure your company is well structured, and use the organisational chart to show your company; ‘s internal structure, hierarchy, roles and responsibilities of your team. Talk about the relationship between your team and their contribution towards the success of the company. Investors often place significant emphasis on the team’s strength. 

5. List Your Product and Services

Give a detailed list of all your products. Are you into general merchandise or limited to one product only? It is best to give clarity to your products or services rendered.  

Explain your offerings in detail. What makes your product/service unique? What are its features and benefits? Include information about the development, intellectual property, and any future research and development plans. 

6. Marketing and Sales Strategy

Next, is your marketing and sales strategy. What approach do you need to acquire customers? What measures have you put in place to retain your customers? Your most preferred marketing channels? Your pricing strategy? Sales tactics etc. How do you want to position your brand in the market and how do you want your brand to be perceived in the industry? Defining these strategies will give your investors or interested parties an insight into your marketing plan and your business goals.

7. Funding Request

If you are seeking funding, specify the amount needed, how you’ll use it and the potential return on investment for investors. Provide detailed financial projections, including income statements, cash flow statements and balance sheets.

8. Financial Projections

Develop detailed forecasts for the next three to five years. Include revenue projections, expenses, cash flow, and break-even analysis. Realistic financial projections demonstrate your understanding of the market and your business’s potential.

Common Mistakes to Avoid When Writing a Business Plan

1. Setting Unrealistic Goals 

Some business ideas look just great in writing, until execution time arrives. Some may be too risky for investors while others may be less valuable to invest in. Try to aim for small business ideas that are achievable and are not capital-intensive.

2. Not performing market research

The importance of market research cannot be overemphasized. Not performing market research is setting up your company for doom. Failure to understand the industry, trends and timing can be detrimental to your company and can lead to irredeemable loss.

3. Excluding or Overestimating Financial Projections

Investors or anyone interested in your company needs to see your financial projections, cash flows and income statements. Don’t leave your balance sheet or any important financial projections out of your business plan. It puts your company in a bad light and can keep investors out of your company. 

To create a successful business plan, include your break-even analysis and ROI calculations in your financial projections.

4. Incomplete or Inadequate Operational Plans

Neglecting to detail operational processes, production methods, supply chain management and staffing needs can be detrimental. Investors want to see a clear operational plan that demonstrates how the business will function on a day-to-day basis.

5. Overlooking the Executive Summary

The executive summary is the first section investors or stakeholders read. If it fails to provide a compelling overview of the business plan, it might lead to lost opportunities. It is crucial to craft a concise, engaging and informative executive summary. 

Avoiding these common mistakes can significantly improve the quality and effectiveness of a business plan, increasing its potential to attract investors, guide business operations and achieve success.

Conclusion

A well-crafted business plan is the foundation of any successful business endeavor. It serves as a road map, guiding your business through its various stages of development and growth.

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