A business plan is a document that shows where a business wishes to go and how to get there. It is useful for new and existing businesses. A business plan provides a sense of direction in today’s business environment characterised by cut-throat competition and environmental complexities. It is a vital tool for attracting investors and financiers and also helps in communicating with key stakeholders.
The Cost of Writing a Business Plan
Professional business plan writers charge varying prices depending on some factors. An entrepreneur should be ready to spend money for a good business plan as low-cost writers may not deliver a quality business plan. However, it is vital to carefully vet the writer’s background to ascertain their ability to deliver a well –researched business plan. Business plan writers with an accounting background are preferred when writing a business plan. Some sections of the plan require the creation of financial statements that meet the right financial reporting standards. The cost of writing a business plan is determined by specific factors, as discussed below.
Factors Determining the Cost of writing a Business Plan
- The scope of financing- business plans for soliciting large amounts of money are more detailed, making them more expensive.
- The nature and uniqueness of business- Some businesses are unique and will require the writer to carry out deep research to piece together a convincing business plan.
- Timelines- the shorter the deadline, the costlier a business plans.
- A simple business plan costs between ksh 10,000 to Ksh 50,0000 while complex plans go up to Ksh 2 million
How to Write a Business Plan
Seven Steps of Writing a Business Plan
1 Executive Summary
The executive summary gives the plan’s outlook by summarising the main sections. It should be short and straight to the point but at the same time ensuring all important information is incorporated. An executive summary should be written after completing other sections of a business plan. This section aims to inform the reader about the plan’s contents, which helps them decide whether the document is worth reading. Besides, some target audiences only read the executive summary due to time constraints. It is therefore imperative to ensure the executive summary is appealing to the audience.
2 Business Description
This section gives detailed information about the business. What the company stands for should be clearly articulated by providing its vision and mission statements. A brief history of the company should be given, which include the year it commenced operations and a clear growth path. Regarding growth, emphasis should be put on showing different aspects of growth such as the number of employees, product portfolio, number of branches, revenue, and asset base. Financials are needed to show the company’s current performance outlook. The nature of business should be discussed, and specific needs that the company seeks to address shown. Both short-term and long-term goals must be discussed, showing the strategies in place to realise them. Also, showing how the company is planning to make profit is necessary where efforts are made to show the suitability of its business model in the lenses of profitability.
3 Products and Services
A business plan should provide sufficient information concerning the existing and intended products. Each product should be described showing the specific benefits that its consumers get. Unique features about the products are discussed to show the capacity to penetrate the market. Product development activities should be discussed, giving details of how the firm introduces new products and improves the existing ones.
4 Market Analysis
A good business plan should be based on thorough market research which identifies the market potential and the competitive forces facing a business. Grouping the target customers into segments is necessary and information about each segment given. Market data should be provided showing the historical, current, and the projected trends. It is also necessary to describe the industry and give key statistics. Competition analysis is an important part of the market analysis, and it involves identifying the main competitors that the firm faces. Strengths, weaknesses, and market shares of these competitors should be outlined with clarity.
This section of a business plan shows how the firm will position itself to exploit market opportunities in the face of competition and other environmental forces. Costs and pricing should be discussed in details to confirm the financial viability of the opportunity. Details of marketing operations are essential and should emphasise explaining how the firm plans to endear its products to potential customers. In the course of giving market operations details, providing information about promotion and distribution activities is necessary.
6 Management and Organisation
This section focuses on the firm’s internal environment comprising elements such as human resources, organisation structure, and shareholders. Profiles of top managers are given showing their qualifications that align with the organisation’s human resource needs. Information about the owners is also provided, and their stakes in the company identified. An organisation chart that identifies the major departments in the organisation is provided.
7 Financial Planning
This section is used for financial projections to illustrate the firm’s future financial performance. Financial documents such as a budget, projected balance sheet, income statement, and cash flow statement are included in this section.
Supporting items of a business plan are put in the appendices. This section includes documents and items seeking to clarify other sections of a business plan.