How To Write A Perfect Business Plan for your journey in 2021: Step-by-Step Guide
For every business to succeed there has to be a business plan, there has to be a backup and there has to be consistency in business objectives and goals. With a lot on your plate regarding the online business setup, budgeting, marketing, promotions, lead generation, evaluating the results, sourcing, etc., etc., etc, a well-built business plan will tell you what needs to be done next, identify the potential bedlams and what resources will you need at what phase. Starting a business in 2021 needs time, effort, and a full-fledged business plan.
Though some financial hits are spontaneous, there are still many entrepreneurs who find it valuable to have a head-start by doing market research, budgeting, and creating a plan on how to start, launch and promote their business in the market. The article holds every probable step that you might want to take while making your own business plan from the scratch. So let’s start from the start.
Table of Contents
What is a Business Plan?
A business plan is a comprehensive guide that holds all the aspects of a startup – the products/services, the suitable working and revenue model, leadership, resource requirements, employment needs, initial & upcoming budget settings, marketing, promotion requirements, and other details that are helpful to a budding business.
Nowadays online business ideas are being more prevalent than owning a traditional retail store as you can easily market your brand in front of your target audience and it requires less monetary investment as compared to a store. Moreover, you can turn your passion into an earning source using the internet and technology as a medium to reach your target audience. If you are a photographer and want a medium to sell your best clicks and monetize your talent, then read here…
Why Do You Need A Business Plan for your Startup?
Apart from letting you hold an edge with planning, a robust and impressive business plan lets investors know the scope of a business before funding it. If your business plan is intriguing then you can easily get the loan/funding from sources. Even if you do not need funding, there are other equally important reasons to write a business plan. Stay Tuned
1. Proper Planning
Every business niche has its own scope of sustainability and growth. Making a business plan will let you know the practical scope of your business’s future sustainability, growth. Moreover, it will give you an approx idea of the time, budget, money, and resources you will need to start a business, survive and grow with it in 2021. The business plan for every niche is different.
2. Evaluating Your Plans
You have a lot going on with your ideas of starting an online e-commerce business in 2021, but you need a business plan to put all of them together and maintain synchrony between them to fetch the best results. With a business plan, all your ideas will be at bay, you will come to know their scope, time, and resource consumption.
3. Market Research
While you write a business plan that is based on market research it helps you know your ideal customer base, how to promote your products, when to display the deals, etc. gathering and penning down your research and simultaneously making a business plan will give you an idea of your market according to which you can plan your marketing strategies. Those strategies will definitely be fruitful.
4. Resource Fetching
Making a business plan and having a clear insight into your business process, objectives and goals will help you fetch resources and communicate plus question the potential candidates for hire. For instance, if you are outsourcing your tasks to expert firms like E-Commerce Web Development Company you will be able to communicate your ideas to make sure you both are on the same page regarding your online e-commerce store development needs, purposes, and goals.
It is always beneficial for a business to eventually collaborate with other companies to get the best results out of their marketing endeavors. It is quite common for businesses to collaborate with complementary services. For instance, an online pet marketplace might have a section for Vets, pet groomers, trainers, etc. If you have a clear picture of your business and its goals then you will automatically know which company you want to collaborate with and when. The same goes with finding social media influencers with the target followers base to promote your online business.
6. Studying Competitions
There is no business without considerable competition and with digitalization at its peak building an e-commerce website and facilitating secure payments with door-to-door product delivery is convenient as ever. Write a business plan keeping in mind your market competition and how you can outreach them to give the best user experience. To find the competition in your location and industry, Google on business plan competition + (your market location) and business plan competition + (your business industry).
Stepwise Guidance on How to Write A Business Plan?
Now that you know the importance of writing a business plan for your online business’s success, it is time to know how to get started. Making a business plan is not a joke as most of your future decisions will be dependent on that.
The great way to start writing a business plan is by making a skeletal draft and then filling each section with your insights, goals, ideas, and information. Though a business plan is not a full-proof roadmap to success, you might want to replace your old ideas with new ones as you grow and learn in your business.
To avoid hitting the blank wall at first here is the most accurate skeletal draft that will help you write a business plan more precisely and make sure that you do not miss any important detail.
The Complete Business Plan Includes….
1. Company Description
Not a normal description but the section holds two basic yet most important questions – who are you and what do you plan to do? Answering these two questions will give you and your investors insights into your business, why you are different, what you have to offer, and why your business is the best investment bet.
Even if you are not approaching the investors, the company description segment will make you analyze your own business regarding the principles, the belief, goals, objectives, etc.
What Company Description Includes?
-> The business structure
-> Business model/working model
-> Industry specifications
-> Your business’s mission, .vision, and near-future goals
-> Your business’s background or history (if any).
-> Business objectives – short and long terms
-> The human resource and key personnel – mention their salaries too.
While writing the particular segment think about all the key personnel who are accountable for the sustainability of the business – owner to employees, suppliers, customers, and investors. Once you are clear with the base and business values you will be able to pen down the statements that would convince the investors at a glance.
Also, mention your online establishment (e-commerce website) through which you will be serving your clients. Your e-commerce portal is your brand’s online representative, your promotion tool and the only platform to facilitate your customers with online shopping and payment from the comfort of their homes.
As said above, the company overview should have long and short-term goals. Short-term goals are generally achievable within a year of starting a business and one should be able to see himself achieving his long-term goals in the five years from starting the business. Avoid any impracticality and make sure that your goals and values are SMART – specific, measurable, attainable, realistic, and time-bound.
2. Market Analysis
Knowing your market is another crucial step after knowing your business, while you write a business plan. whether it’s an online dropshipping business or a service website, you need to have an idea of your market, your target audience’s needs, challenges, preferences, and how you serve them.
Analyze and pick the right market for your products or service. if your market is right then you will not have to struggle to create a demand. There is always a demand for your product in the right market you just have to create awareness and influence people for your brand. picking the right market to sell your product is a half battle fought.
How to decide market potential?
This is where market research and analysis comes into role. Whether or not you are writing the business plan with the perspective of investors to see, you need to know your potential market, how far-fetched it is? Your business’s position in the market and the idea of your competitor’s landscape.
How many people you can turn to buy your products? Market scope or potential market is the estimate of your product’s demand in the market. Though market research is a confusing task and needs focus and dedication, here are the tips to give you a head start with your market research.
1. Know Your Ideal Customers Profile
The geographic and demographic traits of your target audience will help you have an idea of how to pursue them. For instance, your ideal customers are residents of the USA then you can use government data to track the size of their group, while filtering the groups according to their age, gender, marital status, etc.
2. Trends and Trajectories in your industry
Trends will help you increase your sales that is for sure. If you are serving fitness enthusiasts, make sure you know which equipment and accessory are in trend. What is more in demand by fitness enthusiasts? And what are their consumption patterns? In fact, in every business there are certain items that have passed the test of time and are still the bestsellers, make sure you have such things in your catalog.
3. Make Informed guesses
As the market is dynamic it is hard to achieve complete and accurate information about the size of your potential target group. Everything will be in approx, your task is to derive your estimates based on the verifiable data points for concrete and desired results.
Where can you get the data for your market analysis?
Government stats, Google, offices, industry-specific searches, your competitor’s data, academic research, and some outlets that belong to your industry but are dealing in different products/services.
Analyze your company’s Strengths, Weaknesses, Opportunities, and Threats (SWOT). Find out the best about your company, the limitations, the industry you fit in, what market or industry shifts you can take advantage of to gain sales? And are there any external factors that can hinder your business? How can you assess your company’s potential, limitations, and scope using SWOT?
Here is an example of the same:
Analyzing the Competition
Market analysis is all about analyzing the potential risks, strengths, opportunities, and competition in the market. Studying your competitor websites is the crucial part for any business no your product catalog has an elevating demand in the market, if your competition is fierce and you are not aware of it then there are fewer chances for you to grow.
How you can make a difference in your potential market?
-> You can make a difference and outreach your competitors by offering lower prices of the same product than most of your competitors.
-> Offer value for the product – it can b anything from quality to shelf life, user experience, etc.
-> Offer something unique or an upgrade of the product that is currently the bestseller in the market.
-> Focus and establish your expertise in a particular niche – which will help you with finding your target audience, influence them and promote your products well. Even the dropshipping business model (which is one of the lucrative business opportunities in 2021) requires a profitable niche to sustain and succeed.
There are chances that you face competition in the market even if you are selling an innovative product, so it is mandatory to include the competitive analysis while you write your business plan. While dealing in a particular market, consider the list of well-known and established companies that are currently serving. You can google with relevant keywords and go for the ones that are on the top on SERPs.
Even if you are selling an upgrade or a unique product make sure you know your indirect competitors – the sellers who are selling the substitutes of your products. The price they are selling in and the quality they are giving. Know to what extent they can replace your products?
3. Management and Organization
Management and organization are the base of every business, then why not include them in the business plan you are writing for your brand? The organization is the basic wheel of a business.
What do you need to consider in this particular segment?
-> The detailed legal structure of your business.
-> Mention whether your company is a sole proprietorship or limited partnership.
-> Mention your team management and organizational charts.
-> Complete list of employees, their department-wise segregations, designations, and roles.
-> Know and communicate how each person will contribute to the productivity of your company.
4. List of Products and Services
The products and services you are monetizing and selling through your online e-commerce website or mobile app constitute the base of your business. It is indeed crucial to mention a listing of the products and services with detailed descriptions on how to use them? Their benefits, their components, rates, etc. to mention to the interested readers.
If the product catalog is too long to describe then you can go with the generic description of each mentioning the mandatory fields like application, usage, benefits, and price. The dedicated segment on products and descriptions is a must as it will help you keep track of your inventory as well. If you have a certain product then give a detailed description of the products.
As entrepreneurs are more inclined towards providing products and services through smartphones, m-commerce is the hot deal of 2021. Moreover, the products or services you are going to sell through the m-commerce app are of utmost importance. Customer reviews and satisfaction plus the list of the products you sell together to decide the fate of your online business.
Explain how these products will contribute to the profitability of your business by mentioning the expense and profit margins of selling the products. Also, it is mandatory to mention the source of product availability. For instance, handmade products or services are sourced differently from the best products for the dropshipping business.
5. Grouping the Target Audience
Influencing your target audience is what decides the sales of your business. It is indeed the sole purpose of all your digital marketing strategies. But how can you influence and relate with your target audience? Does that sound like a deal? – make relevant marketing strategies and shoot relevant ads triggering the benefits and challenges your target audience is facing.
Well, nowadays there is no business without relating with your target audience and showing them their benefits from your products.
Segregate your potential client base into groups so that you can relate and speak well with each group influencing them separately to buy from you
For the best overview of your client base focus on their geographic and demographic traits on which depends their preferences, their situation (under which they will use the products), their shopping behavior, their probable response to your ads, etc.
Basis of customer segregation…
-> The location they are residing in
-> The age bracket
-> Educational qualification
-> Matching behavioral patterns
-> What do they like to do in their free time?
-> Where do they work?
-> Technology they use
-> Their job and earning status
-> In which industry they are employed commonly?
-> Their values, beliefs, and opinions.
Need not all but the information you need is based on what products or services you are selling, make segmentations based on what factor will influence your sales, and segregate your potential clients based on that.
For instance, to sell gym equipment you need to segregate your target audience based on the age group, body type, preference, height, employment status, and beliefs regarding staying fit. Also, a student’s life choices, lifestyle, and sopping preferences will be different from a higher executive in the Fortune 500 Company.
6. Marketing Plan
All your marketing endeavors depend directly on the target client base and their traits & shopping preferences. Also if you are owning an e-commerce store then most of your marketing strategies will be digital. Also, you need to know which marketing strategy will give you profits so that you do not waste your time and money on other channels.
Also to save your time you can hire the help of a professional digital marketing company to help you with digital marketing strategies, SEO, SMO, and SMM. More than hiring freelancers or DIY, the professional firm will work in synchrony, full-time customer support, complete data security, and taking care of the content management that is published in your brand’s favor. Also, the dedicated experts of Vervelogic are here to help you with Social Media Optimization and Social Media Marketing from online content management and online ad campaigns.
It is important to know your product, promotion strategy, place, and price…
Product – Know the product you are selling and how you can make a difference?
Promotion – How you are going to advertise the products?
Place – Where you are going to sell your products?
Price – The cost of the product.
7. Logistics and Operation Plans
Backend operations are the workflows that you put in to turn your dreams into reality. Now that you are on the seventh step of your business plan make sure you focus on how various processes will go on. Even if you are not composing the business plan to fetch the fundings, you still need to mention the segment of operations as this is to give you an idea of how the back-end will work and will give you give to think on the possible uncertainties. A backup is always better than hustling afterward.
The Key Mentions in the segment:
-> Suppliers – Finding the right and genuine suppliers to source your product is a must for any business. Even if you are sourcing the base materials and customizing them to sell via your E-commerce store. For instance, customized T-Shirt business. Know how to find the best suppliers for your business in 2021.
-> Production – Will you make the products or dropship them? And how long does it take to produce one unit of a particular product? And do you have any arrangements for a hike in demand in the busy season?
-> Facilities – From where you will be operating and if you have a production house or not? Well, in the e-commerce business you can turn your home into a startup and stock the products to sell them or just drop-ship the products without any hassle of inventory keeping.
-> Equipment – Details of what tools and equipment you will need to fulfill the production or you have any third-party manufacturers to facilitate the product availability? Also, the other equipment you will need to get started with your business. For instance, to execute an online business you need a laptop, internet connectivity, and an e-commerce selling store.
-> Shipment and Order Fulfillment – Mention whether you will be handling the fulfillment task in-house or have third parties do that on your behalf. For instance, in a dropshipping business mostly the third party facilitates order fulfillment. Know more about dropshipping order fulfillment and supply chain.
-> Inventory – What products and in how much amount you will keep in hand? And where it will be stored. This also depends on whether you are producing the products or sourcing from the suppliers or manufacturers. Like in dropshipping business, the products are mostly sourced and dropshipped by the suppliers and therefore it is important to deal with the best.
The segment should depict you have a strong insight into the production or supply chain and you own the back up to cover the unforeseen discrepancies (if any). Also in your favor, the segment should be able to help you make future decisions like how you will price your products to cover the fulfillment expense and fetch some profit for you.
8. Financial Plans
There is no base even for a great business idea of there is no financial scope in the market. All your time, efforts, and investment are waste behind a business plan that is not viable for the near future. The details in this particular segment will depend on your target audience base and your personal business but what you need to inevitably mention here is your income statement, the balance sheet, and the cash-flow statement.
Income Statement – The income statement establishes your business expense and the revenue source through which one can get the idea of sustainability and current profit and loss.
Balance Sheet – Balance Sheet confirms that how much equity is there in your business? This is calculated based on the Assets (resources you own) and the Liabilities (what you owe). Assets – Liabilities = Equity.
Cash Flow Statement – Much like your income statement the additional information that needs to be entered is when – when the revenues are collected and when the expenses are paid. Cash flow is positive if the revenue is greater than the expense and one needs to worry if the opposite happens.
9. Executive Summary
Last but not least, the executive summary is a summary that is written with the purpose to distill everything and give the investors a high-level overview to persuade them to read more. As it is a summary you need to highlight the key points that you have not mentioned while writing the plan.
What an executive summary should have?
-> Business concept
-> Goals, principles and visions.
-> Product category description and differentiation grounds.
-> Target Market.
-> Marketing strategies.
-> The ongoing financial state of the business
-> Predicted financial state (estimated earnings and revenue)
-> Funds you need
-> Your Teammates/employee strength.
Probable Reasons for Business Plan Failure
After what you need to add and how you need to write a business plan, let’s talk about what you should not do… This is an equally important segment as this tells you the common business plan mistakes that you need to avoid to get the best out of your business plan…
1. Unworthy Business Idea
You cannot rely on an impractical business idea. It is not going to lure any investor if your idea is too expensive, isn’t valuable, or has no scope in the market. You usually do not need much of an investment to start an online e-commerce business still a bad business plan is not worth your try.
2. No Exit Strategy
If you are making a business plan for investors make sure to mention the exit plans. Every investor wants to know that in case of extremity how he/she can leave the business with maximum profits.
3. Team Mismanagement
A team is the most crucial asset for a company and if there is team management then your business will go on the top. Several business owners often ignore providing this information or consider it in the last. Balanced professional expertise is a must for every business which a smart investor will notice.
4. No Financial Projections
Numbers are the hero of your business plans. Whatever you promise if you have the numbers straight then it will intrigue the investors and increase your chances of getting the fundings. A business plan with no financial projections is a dull skeleton. Include ROI calculations, income statements, cash-flow statements, balance sheets, etc.
5. Spelling and Grammar Errors
Startup owners believe that hiring a professional editor is overrated and the whole idea of a business plan is to give insights into your business plans, income, and growth, but it is just the opposite. Several big firms keep an editor to review their documents for spelling and grammar checks. If there are errors in your business plan then how will people believe in your business?
Business Plan Writing Tips
For every e-commerce business to succeed there has to be a perfect business plan. Here are some pro-tips on writing effective and impressive business plans.
1. Know Your Target Audience – Even if you are writing a business plan for yourself, knowing and mentioning your target audience and prior market analysis will help you make better strategies. Do remember, this business plan remains with you through your financial journey.
2. Have a goal in mind – Writing a clear and result-oriented business plan is a must for consistency and growth. You must set a goal depending on your current analysis and assess your growth and achievements based on those goals. Setting your goals straight will help you communicate with your team as well.
3. Invest time in research – Most of the sections of your business plan need research and proper numbers whether it’s knowing your potential market, competition, or setting your short-term or long-term goals, research is a must for the decision-making process. It even gives you the confidence to deal with the investors. Prior research and numbers derived are always best for a business plan.
4. Straight to the point – A business plan is not a story or a screenplay, it is a small square to the point fact and figure list that you use to set your roadmap for success in your business. The business plan is a 15-20 page short and readable document that has only the valuable insights and segments for your business.
5. Keep a firm tone, style, and voice – To make others confident about your business, you have to sound consistent and confident too. Also to be positive about your own venture you need a firm tone, consistency, and an adamant voice.
A business is not an endeavor of a day or two it takes years of toil, consistency, and above all trust. A business plan helps you predict the near future of the niche that you have chosen and also the strategies that you will be making to survive and grow with your online e-commerce business in 2021. Whether it’s a retail startup or an online business idea that you have shown interest in, a business plan will help you evaluate and re-evaluate your decision every time when it comes to inputs and investments.
Also, an online business needs online solutions, make sure you have a plan to get your e-commerce web development or e-commerce development done from a professional IT company they will give you a concrete base and will save you from future technological and managerial disasters for which freelancers never owe. Once your business plan is complete you will automatically know which step to take next