How to write a Business Plan?

Business Plan

If you want learn how to write a business plan then you are at the right place. Because I professional business plan write therefore, I will explain everything to you in detail.

How to Write a Business Plan

Business Plan gives you the complete map of your business like how it works and the expected outcome of your business.

And this article will teach you how to write a business plan

These are the outlines that should be covered in a business plan document.

In the first portion, we will write an executive summary and If you want to learn how to write an executive summary then you can click here.

1) Description of your Business:

This is the first part of How to write a business plan. 

Here you will write complete detail of your business like

  • Business Name:      …………………..
  • Business Cont:        ……………………..
  • Email:                       ……………………
  • Business Address:  ………………………

2) About your Industry:

This is the 2nd part of how to write a business plan

Here you will write something about your industry like if I am starting a construction company Boston then I will have to write about the current situation of the construction industry in Boston. Like the demand for construction work, companies that are working in this industry, challenges, etc.

We will have mention some accurate figures like actual growth rate, revenue in the previous years, expected revenue in upcoming years, employment ratio, etc. 

Moreover, we will have to do Porter’s five forces Analysis where we will analyze five things. 

  • The threat of entrants

How easily one can enter into your industry. If it’s not easy when you are safe, but if it’s easy then you have will have to make some strong marketing strategy

  • Bargaining power of the buyer

if your buyers don’t bargain (it only happens when your prices are fixed, or you target upper-middle-class people) then your business is easy. Otherwise, you will have to work on customers’ bargaining patterns to increase your sales. 

  • Bargaining power of suppliers

Her you will define the bargaining power of suppliers – if the bargaining power of suppliers is very low then you are safe and its green signal for you. Otherwise, you have to make some strong marketing strategies. More specifically, you will have to focus on the supply chain of your business.

  • The Threat of Substitute

Means what are the other options for your customers. If they have a lot of options they threat of substitutes is very high, and if they have low options then the threat of substitutes is low.

  • Competitor Rivalry

It’s about how many competitors do you have in the market. higher the competitors, the higher the competitor rivalry.

3) Marketing Plan:

This is the 3rd part of how to write a business plan and it is the most important part of business plan

There are five portions in the marketing plan section that we will explain in detail. 

  • Current situation of Market:

Here we will write our research work. research work of your industry, competitors, and targeted customers. We will analyze the opportunities for our industry and Business. 

Moreover, we will also do SWOT analysis where we will analyze our Strengths, Weaknesses, Opportunities, and Threats.

  • Targeted Customers:

Here we will write about our targeted customers. We will distribute our targeted customers into Geographic (targeted area), Demographics(Age, Gender, Income, Profession, etc), and Psychographics(Interest, Attitude, and behavior).

It important to write some exact numbers like how much customers we will target

  • About Product/Service:

Here we will write about our product/service in detail. We will mainly answer these Questions:

    • What is your product – Explain in detail?
    • What are the benefits of your Product/Service?
    • What are the main features of your product?
    • Why people will purchase your product?
    • What is the Unique Selling Point of your Business?
    • Are you available on the Internet? if yes, then write about your website.
    • Tell us something about the after-sale services that you are offering?
  • Price:

Here you will need to answer these questions:

    • What is the selling price of your product/Service?
    • On what factors your selling price depends?
    • Tell us about the price of raw materials that you are using
    • What is your total Variable cost
    • What is your fixed cost?
  • Promotion:

Here you will have to write about your promotion strategy. Like

    • How you will promote your business?
    • What are the channels that you will use for your promotion?
    • What is the monthly and yearly budget of your promotion – specific for all your channels?

4)Financial Plan:

This is the 4th and final part of how to write a business plan. 

Here you will write about your Financial Plan:

You will have to calculate everything on the excel sheet and then past it on word file. Here is the example of the financial plan that I have written for caregiver business:

Financial Plan Sample

How to write a business plan

 

6. Financial Plan

Assumptions:

 

v The financial plan is in US dollars.

v We assume that on average on caregiver will provide services for 325 days by cutting holidays, etc.

v There will be 10 caregivers in the first year.

v We assume that on average one caregiver will spend 6 hours daily on duty.  

 

Revenue Estimation:

Revenue Estimation

Years

Avg. rate/hr. (A)

Daily hours/Caregiver (B)

Total caregivers C = (A*B)

Total hours/day D = (B*C)

Avg. Revenue/Day E= (D*A)

Yearly Revenue         F = (E*325)

Yr1

$         22

6

10

60

$                1,320

$       429,000

Yr2

$         22

6

20

120

$                2,640

$       858,000

Yr3

$         23

6

30

180

$                4,140

$    1,345,500

Yr 4

$         23

6

40

240

$                5,520

$    1,794,000

Yr 5

$         23

6

50

300

$                6,900

$    2,242,500

 

 

 

 

 

Income Statement:

Income Statement

 

Year 1

Year 2

Year 3

Year 4

Year 5

Revenue:

 

 

 

 

 

Revenue from Sales

$   429,000

$    858,000

$1,345,500

$ 1,794,000

$ 2,242,500

Total Revenue

$   429,000

$    858,000

$1,345,500

$ 1,794,000

 2,242,500

Less: Operating Cost:

     

Salaries to Caregivers

300,300

600,600

941,850

1,255,800

1,569,750

 

     

Gross Profit

$   128,700

$    257,400

$   403,650

$    538,200

$   672,750

Gross Profit %

30%

30%

30%

30%

30%

 

     

Less: Other Non-Operating costs

     

Website and hosting

600

600

600

600

600

Rent

12,000

12,000

12,000

12,000

12,000

freelance

6,435

12,870

20,183

26,910

33,638

Utility expenses

12,870

25,740

40,365

53,820

67,275

Transportation

12,870

25,740

40,365

53,820

67,275

Advertisment Expense

3,500

10,000

10,000

10,000

10,000

Miscellaneous expenses

17,160

34,320

53,820

71,760

89,700

 

     

Income Before Tax

$     63,265

$    136,130

$   226,318

$    309,290

$   392,263

% Income Before Tax

15%

16%

17%

17%

17%

 

     

 Taxes

5,694

12,252

20,369

27,836

35,304

 

     

Net Income After Tax

$     57,571

$    123,878

$   205,949

$    281,454

$  356,959

% Net Income After Tax

13%

14%

15%

16%

16%

 

 

 

 

 

Cash flow Statement:

 

Cash Flow Statement

 

Year1(2020)

Year2(2021)

Year3(2022)

Year 4(2023)

Year 5(2024)

Investment Activities

     

Beginning Cash

$      8,000

$    60,021

$    138,899

$    254,848

$  416,302

Computer

850

    

Printer

1,200

    

Office furniture

1,500

    

Other assets purchased in year 1

2,000

    

Required Assets purchased in year 2

 

45,000

   

Required Assets purchased in year 3

  

90,000

  

Required Assets purchased in year 4

   

120,000

 

Required Assets purchased in year 5

    

150,000

 

     

Net Cash from Investing Activities

$  2,450

$ 15,021

$ 48,899

$  134,848

$ 266,302

 

     

Operational Activities

     

Revenue

429,000

858,000

1,345,500

1,794,000

2,242,500

Less: Operational Cost

300,300

600,600

941,850

1,255,800

1,569,750

Gross Profit

128,700

257,400

403,650

538,200

672,750

Less: Non operational Cost

65,435

121,270

177,333

228,910

280,488

Net Profit Before Tax

63,265

136,130

226,318

309,290

392,263

Less:Taxes

5,694

12,252

20,369

27,836

35,304

Net profit After Taxes

57,571

123,878

205,949

281,454

356,959

 

     

Net Cash From Operational Activities

$ 57,571

$  123,878

$  205,949

$ 281,454

$  356,959

 

     

Cash at the End of Year

$       60,021

$    138,899

$     254,848

$  416,302

$  623,261

 

It is a cash flow statement that shows the estimated cash at the end of every year. Like at the end of the upcoming first year (2020), we will have the estimated cash of $60,21 that we can see in the balance sheet too.

Balance Sheet:

 

Balance Sheet

 

Year1(2020)

Year2(2021)

Year3(2022)

Year (2023)

Year (2024)

Assets

     

Cash

$      60,021

$    138,899

$    254,848

$    416,302

$ 623,261

Computer

850

850

850

850

850

Printer

1,200

1,200

1,200

1,200

1,200

Office furniture

1,500

1,500

1,500

1,500

1,500

Other assets purchased in year 1

2,000

2,000

2,000

2,000

2,000

Required Assets purchased in year 2

45,000

45,000

45,000

45,000

Required Assets purchased in year 3

90,000

90,000

90,000

Required Assets purchased in year 4

120,000

120,000

Required Assets purchased in year 5

150,000

 

     

Total

$  65,571

$   189,449

$    395,398

$  676,852

$1,033,811

 

     

Liability and Owner’s Equity

     

Capital Introduced

8,000

65,571

189,449

395,398

676,852

Net Profit

57,571

123,878

205,949

281,454

356,959

 

     

Total

$    65,571

$   189,449

$   395,398

$  676,852

$1,033,811

 

It shows the total worth of our company. At the end of the first year (2020) total worth of our company, based on book value, will be $ 65,571. And it’s increasing every year.

Break-Even Analysis:

Break even analysis

As we can see that in the first year the total cost is more than the total revenue but at the end of 2nd year total revenue is more than the total cost which means we will touch breakeven point in the mid-2nd year.

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