How to Make a Business Plan | Step-by-Step

In this article, we will explain step-by-step how to make a business plan that represents your idea well and bring it to life. But why do it? You could simply throw yourself into the ring and get ahead with a venture or a new business line for your company.

Many people have brilliant ideas that would achieve great profitability, but when they are implemented they are not successful due to lack of planning. By making a business plan you get a broad overview of the reality in which you will move when developing your project. This makes it easier to make decisions on time.

Every good idea must be accompanied by knowledge, and by following this step-by-step you will find the answers you need to take it where you want. It is the roadmap that will accompany you and give you security in every activity you carry out to move your idea forward.

If you want to have more arguments about why to make a business plan, remember that you will need a tool that supports your words when talking to others about your idea and its results. Searching for financing or a partner is easier if you have a way to support the success of the business with relevant data.

This is how you should make it!

Structure of a business plan

The first step to making a business plan is to know its structure and identify each of the steps to follow in its preparation. This structure contains the elements that your business plan must include, which we will develop step by step so that you learn the correct way to build it.

Some people prefer to make one-page business plans, but in this article, we will focus on a longer document. One that you can present to a financial entity or a group of strategic allies with all the details of the development of your idea.

To make an adequate business plan, it must be adapted to the needs of the company, since each business has particularities that are not framed in rigid structures. Take the time necessary to adapt the structure to your idea or new line and develop the points you include.

What is needed to make a business plan?

Gathering the elements to prepare this document is not as complicated as it may seem. After defining the appropriate structure for your business, you can make a list of the elements you will need to build it.

Having a good market study is essential. Whether for a new business or an old company, it is very important to know the competition, your future customers, the most suitable places to sell your products and the share you can have in the market.

Another element that you will need when making a business plan is a SWOT analysis. Identifying the internal and external elements that will affect the idea or your new line of work is the basis for developing production, sales and processing strategies.

You will also need a good knowledge of what you have now: the infrastructure, the money, the investors, your possibilities of obtaining financing or even your shortcomings.

Finally, this is a job that requires the input and knowledge of several people. No matter what type of entrepreneur you are, you will always need support. So surround yourself with those who can help you make a well-established business plan.

How to create a business plan step by step

Save the first for last

The executive summary is the first information anyone will read in this document. To write it, we recommend that you think about an interview about your business. Answer specific questions and try to explain clearly and concretely the most important points.

What do you offer? Who do you want to reach with your product or service? Who will offer it? What do you plan to achieve? How are you going to finance it? How would you justify the success of this business? The answers should be easy to understand, but in professional language that generates enthusiasm.

Try to convey in the executive summary the passion that this idea or line of business produces in you. Remember, this should be a maximum of 2 pages.

1. How to describe your company or idea?

This is the first step to making a business plan is to describe it. How to do it? Again, try to answer simple questions to give a good idea to the reader. What does your company do or what will your business idea produce? This explanation should be brief, because if you say it in a few words it will be easier to understand.

For already established companies, this is a good space to place their mission, vision, goals and objectives. How was the company founded? What is the most important thing for those who are part of it?

You must also explain the situation of the sector in which it operates and how it develops, its changes and the way in which the company has faced it. You can mention this in a general way, since later the market will be discussed in depth. Now, inform about your products or services.

For new ideas, mention the success factors, who are the most important competitors? What are the elements you will contribute to confront the competitors? What type of company will you establish? Why?

2. Market evaluation or environmental analysis

With market research, you will be able to have a profile of your potential customers and their behavior. By making a business plan, specifically evaluating the market, you will understand where buyers are located, who they buy from, what they expect to receive, and much more.

To do so, you must determine the objectives of the study and relate the sources of information from which you will obtain the data of your study: books, surveys, studies already carried out previously, statistics, among others. Information has three focuses: the market, the competition and potential customers.

Think now, how to analyze this information? Remember to look at each approach differently: the market in general, competitors in particular, and potential customers.

Make conclusions about the findings of your analysis and keep in mind the objectives you defined previously, so you can respond to them here. Report on the viability of your product or service in the current market, as this is the purpose of a market study for ideas in development or established companies.

3. Strategic planning when making a business plan

Evaluating the current internal and external situation of a current or future business is the first step in formulating strategies. To do this, it is best to start with a SWOT analysis. When developing it, it is important to take into account internal aspects for strengths and weaknesses, and external aspects for opportunities and threats.

After developing the matrix, the next step in making a business plan is to describe how you will grow or expand your business through the new line of work you are considering, if it is an old company. You must explain these strategies in detail and describe their objectives and development.

If, on the other hand, it is a new idea, this is the time to build the mission, vision, objectives, and finally the strategies to develop to move it forward.

In many cases, it is advisable to establish alliances to successfully develop strategies. With them, your brand is strengthened and your products become more visible.

4. Sales strategy and marketing plan

It is one of the most important points when making a business plan, since how to impact the market will depend on it. For this it is also necessary to establish an initial analysis of the situation, the objectives of the strategy, the budget you plan to invest in it and the way it will be evaluated.

With the market study you have already taken a giant step towards building the sales strategy or marketing plan. Remember: the design of the objectives is what will help you determine many of the activities to develop to achieve them, so do not lose sight of them.

5. Infrastructure analysis and operations plan

When making a business plan for an idea you want to implement, the operations plan describes step by step the how, where and when of production, sale or service.

Estimate product volume, capacity and costs. Finally, explain the distribution, transportation needs, profitability and costs. This way you will also be able to define the infrastructure that is required to meet these estimates.

When you already have a company, the infrastructure analysis should be focused on understanding whether you will be able to develop your new line of work with what you have and describe what you need.

Then, do an analysis of the production volume, capacity and investment you must have to meet the goals, taking into account what you have now and what you must acquire. By making a business plan with very specific information about the infrastructure, you will achieve a complete vision of your possibilities.

6. Structure, internal reforms and human talent

This also requires a current and internal examination of the company and the business opportunity. Having the right staff when making a business plan can determine success. And in order to build a solid structure you must study several aspects.

What are the functions to be performed by human talent or those they already perform? How do they contribute to the development of the business? Is it necessary to make any changes to meet the goals? Who should you bring on board or what changes should you make?

With these answers, build a structure or carry out the reforms you need and determine the human talent to hire.

7. Model and financial projection

The already established company must talk about its financial statements, as it is a very important factor for investors. This speaks to the financial health of the company. Furthermore, up to this point you have talked about the advantages of developing the idea or line of work, but how much does it produce and how much does it demand?

Presenting a financial model or projection shows the framework of the business, the economic support that will make it a reality and that will sustain its operation in the future. This will reflect the total costs, the investment amount, financing sources, the evaluation of profitability and more.

8. Conclusions, recommendations and annexes

This is the final point of how to make a business plan. The conclusions and recommendations must answer the following questions:

Is it viable to develop the idea or line of work in economic and operational terms? Is an idea or line attractive to investors? What are the factors that can affect the profitability of the project, positively or negatively? How to deal with them? How to make the idea more competitive?

Answer each of these questions clearly using the data you have collected when making a business plan. Attach the documents that support each statement in the document as this will give it seriousness and solidity.

Example of a business plan

We are going to choose a hypothetical idea to make a business plan. For example, a virtual pet products store that could be a new idea or a new line of work for a virtual supermarket.

Let’s answer the questions

The first thing will be to prepare the description. To do this, we put the questions that are in the structure to make a business plan and we answer. What products do we offer? Feed, toys, food bowls, etc. To whom? To pet owners and people who wish to buy items for pets. So with each question.

This will help you specify the idea and then make a more accurate description. It is also a good start to market evaluation. We will make a list of the sources that we want to cover for this analysis such as bibliography and market studies already developed, own interviews, etc.

Invest or not to analyze the market?

We will decide if we are able to carry out this study, or if we should hire someone to do it. Now we will ask if the findings of this study are in accordance with the objectives of the project. If so, what follows is to perform the SWOT analysis. If not, we can rethink the idea and look for better results.

We present strategies to resolve weaknesses, protect yourself from threats, take advantage of opportunities and strengths. We consider at this time and in a general way the resources we have and what we will need.

Strategies to reach customers

How can we make products sell? The marketing plan will lead us to discover if we will need to do promotions for the store and what type, what advertising resources to use based on the objectives and the investment we will make, among other things.

If we want to reach people who live near the store and have pets, we can establish some marketing activities with a defined geographic limit. If, on the other hand, we have the possibility of making addresses throughout the city or in a broader territory, the strategy must consider other forms of advertising.

What we need to function

Then we evaluate the current infrastructure: do we have a store, shelves, cash registers, etc.? Do we have vehicles for homes? How will we move the merchandise internally? Every element we have and those we need should be described here.

Next, we determine the personnel required by the store and the work structure: a manager, an accountant, salespeople, warehouse staff, etc. All this has a cost that we are going to add to the financial model. We will take into account each of the expenses, costs, investments, profits and others for our financial analysis.

Let’s examine the pocket

How much do we need to purchase products, equip the store, pay rent and so on? How long will it take to return the investment? How much should we sell to make the business profitable? This information is very important if we are looking for strategic allies and investors.

Now we know if our project is viable, which we must explain in the conclusions. If there are factors to take into account so that our pet store is more productive in the future, expands or reaches a wider audience, we can take advantage of the recommendations section.

The last…

We will write the executive summary based on the work done for the business plan. We also attach to our plan the market study, the SWOT analysis and the inputs we use to develop it.

Ready! We now have in our hands an excellent tool to start the pet products store.

Final words

Regardless of the size of your project, every business needs a plan. With it it is possible to establish the needs, advantages and disadvantages that you have, how to take advantage of them and what you should improve. And to do it you will need time, knowledge and resources.

Seek the support of those who know how to do those things that you cannot so that the plan provides you with real, useful and appropriate data for the implementation of the idea or the new line of work.

We recommend that you be patient and not let yourself get discouraged, because in some you will find things that you do not expect. Look for alternatives, be positive and face challenges with courage so you can achieve your goals.

Ready to make a business plan tailored to you?