How to Build Business Plan in 2024? A Step-by-Step Guide
 Back Office

How to Build Business Plan in 2024? A Step-by-Step Guide

Ryan Thompson
Ryan Thompson
April 29, 2024
Last updated on:

April 29, 2024

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Read time: 8 mins

A well-defined business plan serves as the roadmap for any successful venture.  It not only captures the core vision of the enterprise but also translates that vision into actionable strategies. A strong business plan is a comprehensive summary of a company’s both short-term and long-term goals, including the budget and quality and quantity of resources needed to propel the business towards its objectives.

Enterprises are expected to navigate challenges like a volatile economy, high-tech competition, etc., in 2024. The complexities will require enterprises to make a tectonic shift from their traditional business plans. They must design a roadmap attuned to current business issues and establish flexible goals that can evolve alongside ongoing changes. A clearly defined business plan attuned to modern reality provides clarity to stakeholders about the company’s objectives and strategies for success. These stakeholders include entrepreneurs, investors, lenders, employees, and strategic partners. 

With this in mind, the blog discusses how to build a business plan in 2024 and manage your business effectively for the current year.

According to a report by Investopedia, approximately 20% of new businesses in the US fail during their first two years of operation due to a lack of a business plan.

Best Ways to Build a Robust Business Plan Suited for 2024

Let's delve deep into how to build a business plan for 2024:

1. Provide an Overview of Your Business Aspirations

The first and key step in detailing a business plan is providing an overview of the overarching business goal. This includes a company's mission, product or service, target market, financial highlights, and future missions. It is like an executive summary that briefs the entire business plan and allows stakeholders to grasp the essence of the business opportunity. It is crucial for making a strong first impression and generating interest in the business venture.

Businesses need to begin with a compelling introduction that clearly states the purpose of the business and its unique value proposition. The summary should also offer a brief overview of the market opportunity and the competitive landscape, concluding with a strong call to action to encourage further exploration of the business plan.

What Should You Include in Your Business Goal Overview?

  • Description of your business
  • Identification of opportunities
  • Unique selling points/differentiators
  • Funding requirements
  • Utilization of funding
  • Plans for success

Case Study:

One real example of a business plan that incorporates a company's objectives and strategies for success is Airbnb's initial business plan. Founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, Airbnb's objective was to disrupt the traditional hospitality industry by offering a platform for individuals to rent out their homes to travelers. Its business plan has several key objectives such as disrupting the hospitality industry, community building, global expansion, scalability & growth and innovation and differentiation.

Airbnb, at the outset, aimed to challenge the dominance of existing and traditional hotels by offering unique and personalized lodging experiences through its platform. Secondly it focused on expanding its presence globally and targeting major cities and tourist destinations worldwide to attract both hosts and guests. Airbnb also aimed to foster a sense of community among hosts and guests, promoting trust and loyalty within its user base. In addition, this online marketplace for hospitality sought to differentiate itself through innovation, offering unique features, including user reviews, secure payment systems, and host verification processes to ensure quality and safety for all users. It also eyed on implementing key strategies for scalability by investing in technology infrastructure, marketing initiatives, and effective partnerships for rapid growth and long-term relationships.

By aligning its objectives with these strategies, Airbnb successfully transformed the hospitality industry, achieved widespread adoption, and became one of the leading online travel platforms.

Types of Business Plans
Image 1 - Types of Business Plans

2. Explain Your Business Model

A business model is a conceptual framework that outlines how a company creates, delivers, and captures value to sustain its operations and generate revenue. It can be broken down into multiple compartments dedicated to describing the core elements of the business such as value proposition, revenue streams, customer segments, channels, resources, activities, cost structure, etc.

When explaining a business model, a company should start by defining the value proposition. This could involve describing the specific problems or needs the company addresses. The description must highlight the distinctive features, functionalities, or benefits of its products or services. Similarly it should outline the revenue streams—how the company plans to monetize its offerings and generate income. This includes detailing the pricing strategy, such as pricing tiers, subscription models, or one-time purchases, as well as any supplementary revenue sources, such as advertising, licensing, or subscription fees. The business model should further cover customer segments based on demographic, psychographic, or behavioral factors. 

What You Should Include in a Business Model?

  • Value propositions
  • Customer segments
  • Revenue streams
  • Cost structure
  • Key resources
  • Key partnerships
  • Communication channels

3. Present Your Market Analysis

The market analysis section of a business plan presents a detailed analysis of the industry, target market, and competitive landscape. It helps stakeholders get crucial insights into market dynamics, identify key players, assess market opportunities and challenges and more. Ultimately these data help them with informed strategic decision-making and market positioning.

When detailing market analysis, businesses must include an industry overview, market size, growth trends, and a detailed analysis of the target market's demographics, behaviors, and needs. Additionally, the section should cover the competitive landscape, including key competitors, their strengths, weaknesses, and market share. Furthermore, it should include any regulatory or market barriers that may impact the business. 

What You Should Include in Market Analysis?

  • Overview of the industry and market size
  • Target market demographics, including age, gender, income, location, etc.
  • Analysis of market trends, growth potential, and key drivers
  • Assessment of the competitive landscape, including major competitors and their market share
  • Identification of potential barriers to entry and any regulatory considerations
  • SWOT analysis for the target market
  • Market segmentation and positioning strategy
  • Sales projections and market penetration goals

4. Define Unique Value Proposition 

The unique value proposition (UVP) defines what makes a business unique and valuable to its target audience. It goes beyond listing features or benefits and resonates with customers by identifying and addressing their key needs, desires and pain points in a compelling way.

Businesses should conduct thorough market research to understand their target audience and competitive landscape to define a clear UVP. This involves analyzing customer demographics, preferences, and behavior, as well as assessing competitor offerings and market trends. Also, they need to emphasize how a business solution addresses a specific customer need or problem more effectively than alternatives. This could include factors such as product quality, functionality, convenience, price, customer service, or unique features. Moreover, UVP should be unique and differentiated and help businesses stand out in the market. It could be a proprietary technology, a new process, etc, which can compel the customers to choose your business over other available options.

What You Should Include in a Unique Value Proposition?

  • Clear statement
  • Customer focus
  • Unique differentiations
  • Quantifiable value
  • Brand personality
SWOT Analysis of A Business Plan
Image 2 - SWOT Analysis of A Business Plan

5. Outline Your Sales & Marketing Strategy

Sales and marketing strategies are the calculated methods and tactics the businesses employ to attract customers, drive sales, and achieve its revenue targets. Sales strategies focus on the process of converting leads into paying customers, while marketing strategies encompass broader activities aimed at raising awareness, generating interest, and building brand loyalty.

The strategy should provide an overview of the target demographic and their behaviors and preferences. It must be followed by the outlining of marketing and advertising strategies, sales channels, pricing strategies, and any partnerships or collaborations for marketing purposes. One of the key components of this section is setting key performance indicators, tracking metrics, and adjusting strategies based on performance and market feedback.

What You Should Include in a Sales & Marketing Strategy?

  • Target market segmentation
  • Lead generation tactics
  • Sales channels & forecasting
  • Target audience
  • Branding and positioning
  • Lead nurturing
  • Marketing budget

What are the ways to determine the financial position of a company?

The financial position of a company can be determined through methods such as analyzing financial statements, assessing key financial ratios, evaluating cash flow, and examining the company's overall solvency, liquidity, and profitability.

To know more about this, read our blog: How to Determine the Financial Position of a Company

6. Outline Your Operational Plan

An operation plan delineates the specific procedures necessary to translate strategic goals into tangible outcomes. This plan encompasses various aspects of operations, including production, logistics, marketing, sales, customer service, and resource allocation. It outlines the specific tasks, timelines, responsibilities, and resources required to execute each operational activity effectively. Moreover, it identifies potential challenges, risks, and opportunities that may arise during implementation and suggests contingency planning to address them proactively.

When writing a business plan, it is essential to start by defining an organization’s operational objectives. These objectives should align closely with their overall business goals and provide a clear direction for operations. Likewise, businesses should detail the specific tasks and activities required to achieve each objective. They should break down actionable steps, assign responsibilities to individuals or teams, and set deadlines for completion.

According to research conducted on 1,000 would-be U.S. entrepreneurs over a six-year period (2005 to 2011) by HBR, it is estimated that entrepreneurs with formal plans are 16% more likely to succeed than those without plans.

What You Should Include in an Operational Plan?

  • Business processes
  • Facilities and equipment
  • Operational procedures & policies
  • Inventory management
  • Technology infrastructure

7. Outline Financial Projections

The financial projections present the anticipated financial performance of the company over a specified period. It typically covers revenue, expenses, cash flow, and other key financial metrics. This section provides a roadmap for the company's expected financial trajectory and helps stakeholders understand the potential return on investment.

When detailing financial projections, businesses should include realistic sales forecasts, cost projections, and cash flow estimates based on thorough market research and not based on assumptions. The section should cover profit and loss projections, balance sheet projections, and a break-even analysis, providing a clear picture of the company's expected financial position. Furthermore, it should include sensitivity analysis to account for different scenarios and their impact on financial outcomes. 

What You Should Include in Financial Projections?

  • Sales forecast, including projected revenue by product/service and market segment
  • Breakdown of the cost of goods sold and gross margin analysis
  • Operating expenses projection, including salaries, marketing, rent, utilities, etc.
  • Cash flow projection, including inflows and outflows
  • Profit and loss (P&L) projection detailing expected income and expenses
  • Balance sheet projection, including assets, liabilities, and equity
  • Break-even analysis, indicating the level of sales needed to cover costs

8. Explain Funding Requirements

In a business plan, outlining funding requirements is crucial for securing the necessary financial resources to launch, operate, and grow the business effectively. This section provides a detailed breakdown of the funds needed to support various aspects of the business, including startup costs, operating expenses, and expansion initiatives. It typically includes a comprehensive assessment of both initial capital requirements and ongoing financial needs.

While detailing funding needs, businesses should specify the sources of funding that will be pursued to meet these requirements. This could include a combination of personal savings, loans from financial institutions, investments from stakeholders, crowdfunding campaigns, grants, or other forms of financing. The funding requirements section should also articulate how the requested funds will be utilized and the expected return on investment for investors or lenders.  

What You Should Include in Current Financial Health?

  • Analysis of the company's financial performance over the past few years
  • Key financial ratios and metrics, including profitability, liquidity, and leverage ratios
  • Breakdown of revenue sources and cost structure
  • Discussion of any outstanding debt or financial obligations
  • Cash flow analysis, including operating, investing, and financing activities

9. Analyze Risks

Risk analysis is a critical component of a business plan, as it helps to identify, assess, and mitigate potential threats that could impact the success of the venture. It entails a comprehensive examination of internal and external factors that may pose risks to the business's operations, financial health, and overall viability. Internal risks include factors such as management team capabilities, operational inefficiencies, etc, while external risks cover market competition, regulatory changes, economic downturns, and more. 

In a business plan, it is essential to communicate the findings of the risk analysis transparently and accurately to stakeholders, including investors, lenders, and potential partners. Further, businesses should outline specific risk mitigation strategies and contingency plans designed to address identified risks. This may include measures such as diversifying revenue streams, implementing robust internal controls, securing insurance coverage, building strategic partnerships, or developing alternative sourcing or distribution channels. By demonstrating a thorough understanding of potential risks and a proactive approach to managing them, businesses can instill confidence in their ability to navigate challenges and achieve their objectives.

What You Should Include in Risk Analysis?

  • Market risks
  • Financial risks
  • Operational risks
  • Legal and regulatory risks
  • Strategy and mitigation risks

10. Explain Exit Strategy

An exit strategy is a crucial component of a business plan that outlines how the business owners or investors plan to liquidate their investment and transition out of the venture. This strategy is essential for providing clarity and direction to stakeholders regarding the eventual sale, merger, or dissolution of the business. 

In this exit strategy section, businesses should outline different potential exit options available such as strategic acquisitions, financial buyouts, initial public offerings, management buyouts, etc. Additionally businesses should also provide details on criteria and considerations for selecting the most suitable exit strategy considering factors such as timing, valuation expectations, industry dynamics, and regulatory requirements. Moreover, it is also essential to explain the steps and processes involved in executing the chosen exit strategy. This includes identifying potential buyers or investors, conducting negotiations, due diligence, legal considerations, and transaction structuring. 

What You Should Include in an Exit Strategy?

  • Exit options
  • Criteria for selections
  • Timing & valuation
  • Communication strategies
  • Legal and regulatory considerations
  • Post-exit plans

Conclusion 

Businesses often face challenges in creating a comprehensive business plan, such as gathering accurate market data, conducting thorough financial projections, and formulating realistic growth strategies. Here, outsourcing can prove beneficial, as it allows businesses to leverage external expertise for market research, financial analysis, and plan development, ensuring a more robust and well-informed business plan.

At Invensis, we provide comprehensive back-office services, including marketing and financial analysis, strategic planning, operational planning, marketing and sales strategies, risk analysis, etc. We allow businesses to tap into the knowledge and experience of our professionals. This ensures the business plan is based on accurate and comprehensive data, leading to more informed decisions. Furthermore, we offer a fresh perspective and unbiased insights, which can be invaluable in identifying potential risks, opportunities, and competitive advantages for businesses. 

Contact us to develop well-informed business plans that serve as a strategic roadmap for future growth with our back-office services.

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