How to write a great business plan

Looking to jump into the entrepreneurial world, but don’t know where to start? You’re in the right place.

You’ve probably already come to the conclusion that you can’t improvise when running a business. That’s why before you launch your company, you need to take the time to refine the scope of your business project.

Just having a good idea doesn’t guarantee having a successful business in the long-term. You also need to do some market research, build out your business offer and positioning, define your marketing strategy, and calculate your running costs and potential revenue.

This key preparatory phase comes together in the form of a very important document: a business plan.

A business plan is the end result of all the groundwork you’ll have done for your project. It recaps all the essential considerations and steps you need to take. It will also help prove your company’s financial viability to potential business partners and investors.

What does it need to contain, exactly? And what are some best practices for building out a convincing business plan?

Our guide tells you everything you need to know.

A business plan is a detailed document that outlines all the key aspects of your future company, notably:

• the project itself;
• the team associated with the project;
• the state of the market, target customers and their needs;
• the company goals and overall planned strategy;
• financing plans;
• a detailed financial forecast, generally over a period of three years.

Creating a business plan for your entrepreneurial project is important for two main reasons:

On one hand, it helps get buy-in from potential business partners. That is its primary function. If you’re looking for financing for your project, you’ll inevitably be asked for your business plan. It’s also highly possible that you’ll be asked to present it to a number of external parties, like:

• banks;
• the State, or regional and local public funds;
• future associates;
• business angels (i.e. people looking to invest in startups or other innovative enterprises with high growth potential).

On the other hand, a business plan helps you refine the scope of your project. By thoroughly committing your plan to paper, you get real clarity by structuring your ideas and setting out a concrete strategy.

As important as it is, a business plan is not a legal instrument or act (like company statutes, for example). Therefore there is no specific formality to follow, nor are there mandatory legal mentions to add to your paperwork.

However, your business plan needs to be coherent and well-structured. It’s generally made up of 5 or 6 parts, each relating back to an overarching theme.

This document needs to be precise enough to show your plan is well thought out but succinct enough to keep your potential investors engaged. A business plan should really not be more than 30 pages long. It’s a fine balance.

The executive summary is a summary of your project. This section is one to two pages long, maximum. It includes:

• your business offer;
• your target clients and market;
• your values, the meaning of your project - the “why”;
• your short- and medium-term goals for the business’ growth.

The reader should immediately be able to grasp the major takeaways of your business project. The rest of the document serves to elaborate on those points, one by one.

It’s important to note that the executive summary is probably the most important part of your business plan because it’s what is going to catch and keep the reader’s attention and get them to want to know more about your company. Be sure to give this section special attention because it’s what’s going to make a great first impression.

Now it’s time to present the product(s) or service(s) your business offers in full detail. In other words, what you’ll be selling.

Don’t just describe your product. Be sure to outline:

• its usefulness, its benefits;
• the needs it addresses, the problems it solves;
• its edge over competitors’ products;
• its positioning, its price.

Try to avoid using overly complex terms or other similar jargon. If your product is technical, you can use a table or an illustration to present it. You need to consider that not everyone that will be reviewing this document has a mind for your specific industry.

This part of the business plan is very often overlooked. And it’s a shame because without humans, there is no company. It’s the team that effectively makes the project - a point that’s not lost on investors.

In this section you’re meant to take a moment to describe the members of your team, and more precisely:

• their professional background;
• their skills;
• what motivates them;
• their role and the degree to which they contribute to the project.

It’s important to show how each team member plays their part in supporting the project. Show how well everyone collaborates with one another, and how deliberately everyone was chosen towards that end. Each team member brings unique value to the company through their expertise and skills.

Of course, we’re not just talking about the company associates. Depending on the type of project, you may also want to present:

• your employees;
• hired consultants (like a CPA, for example);
• and generally speaking anyone who actively participates in the project.

Running a solo business? Don’t skip this section of your business plan. Take the time to illustrate your background, your professional experience, and what motivates you. In other words, show how you are meant to be spearheading this project.

A business model is meant to show exactly how your company is meant to make a profit. It answers the fundamental question: how are you going to sell your product?

In order to do that, your business model has to outline:

• what you intend to sell;
• your target market and audience;
• how you mean to sell your product;
• what your intended profit margin is.

To answer these questions you need to highlight:

• the key takeaways from your market research

Normally you’d conduct market research before you write out your business plan. Doing this allows you to suss out your target clientele and their needs, identify your competitors, and become aware of the potential risks and opportunities inherent to your particular industry. You’re able to share the results of this research in the form of concrete numbers you’ll have collected along the way.

• the planned marketing strategy

Alas, simply offering a good product isn’t enough to guarantee its success. This is where good marketing strategy comes in. Here you need to detail all the different means of communication you’re planning to set up to increase the visibility of your brand (advertisements, content marketing, influence marketing…).

This action plan will vary according to your business goals, your target customer as well as your industry.

Your business plan also needs to include a financial plan (or financing plan) for the next three coming years.

In other words, you need to be able to somewhat accurately estimate your running costs, your revenue and your break-even point.

This section needs to also deal with how you intend to finance your business. At the bare minimum you need to be able to answer the following questions:

• What kind of financing can I get for my project (personal equity, investors)?
• What are the first investments I need to make to get my business up and running (buying stock, machines, tools…)?
• What is my overhead?

It goes without saying that you can’t just randomly come up with these numbers. They need to come from in-depth research.

Your plan should be made up of four main parts. Each of these parts needs to be presented as a financial table.

1.  A provisional profit and loss statement. This covers the incoming and outgoing cashflow over the next three fiscal years.
2.  A balance sheet forecast. This helps you ascertain the state of your business’ assets at the close of a given financial year.
3.  A financing plan. This helps you determine whether you have the necessary financing to launch your business.
4.  A cash flow plan. This estimates the flow of your finances over a shorter time period, usually 12 months.

Your reader needs to walk away from this section with all the information they need to determine the financial stability of your business project. Bonus: it helps you better anticipate your cashflow and manage your finances.

This section of your business plan involves laying out all your company’s legal details, in particular:

• your legal status and the reason behind the choice;
• how much share capital your company has, with a breakdown of each associate’s ownership interest;
• how your company profits will be taxed.

While there aren’t any hard and fast rules on how to write out your business plan, it’s still important to pay close attention to formatting.

Be sure to clearly structure your files with each part clearly labeled so the reader can easily find their way around.

The writing ought to be neat and effortless to read. Better to avoid long-winded paragraphs and use shorter, more succinct phrasing to make it easier on the eyes. In the same way, you can use page formatting to break up the information into more “digestible” chunks with bullet points, bold and colors - not to mention it’s helpful for highlighting key information.

And lastly, including visuals in your business plan makes it more dynamic, and therefore more interesting. You can add diagrams, tables, graphs, and illustrations to clarify your ideas. It makes it that much easier to understand, which in turn makes it easier to understand your overall business project.

There are plenty of business plan templates online to help inspire you.

Over the course of your entrepreneurial project you’re very likely to present your business plan to a variety of interested parties. This is why, ideally, you should draft several versions of your business plan that vary according to the reader. Don’t worry, you don’t have to start from scratch: just shift the angle of your executive summary.

Here are some examples.

• For a public investor like the State or a regional government body, it helps to emphasize your business’ favorable impact on the community.
• As for a business angel, try to showcase how innovative your company is - it goes a long way.

Your business plan shouldn’t be a document that’s set in stone. On the contrary, it should evolve over time as your business develops and the market changes. Update it regularly. Never share a business plan that has obsolete numbers, lest you run the risk of making a bad first impression with investors (even if the rest of your file looks great).

Unless you have an existing background in finance, building out a strong business plan isn’t an easy feat. Thankfully there are plenty of experts out there whose sole purpose is to help you succeed in this respect:

• the company creation center at the Chamber of Commerce and Industry (la chambre du commerce et de l’industrie or CCI);
• incubators (for innovative businesses);
• CPAs;
• or even other entrepreneurs in your network.

It’s always wise to have someone outside your company look over your business plan before you “take it to market”. They’ll be able to give you constructive feedback so you’re sure your file is clear and concise for whoever should read it.

You should now have everything you need to write your business plan. The next step? Creating your company. With Qonto, you can deposit your share capital online and receive your digital deposit certificate within 72 hours.