Do you have a new venture in mind and want to know how to create a business plan for 2024? In this article, we explain step by step how to achieve it.
What does it mean to create a business plan?
Experts such as Neil Patel define a business plan as “a methodology that systematizes and integrates the activities that will be necessary for a business idea to become a company and present profitability expectations.” It is a roadmap that allows us to visualize our objectives, opportunities, obstacles and challenges in any scenario.
Therefore, creating a business plan is nothing more than an analysis and planning process that will allow you to determine the viability of your projects and highlight its most basic principles in writing. Without it, how will you know which direction to follow? Next, we show you how to make one for your company or organization:
1. Prepare an executive summary
The executive summary is the first section you should deal with. As its name indicates, this section summarizes the fundamental features of your company so that potential investors have a first approximation to what you propose.
The main goal of this introduction is to provide an overview of your business and summarize your business plan in one or two pages. In it, you must highlight:
- A brief presentation of your business idea and your team members.
- A description of the main idea of your business, and what the product or service to be marketed will be.
- The mission, vision and objectives of your company.
- The description of your target audience.
- Main factors that your brand from the competition.
- The budget you need to materialize that idea.
The executive summary should not be a heavy read, but rather a short, precise, and easy-to-understand text. Visualize your executive summary as a 90-second elevator pitch in which you present your business idea to a potential investor as quickly as possible.
2. Describe the product and your business model
How to create a business plan for 2024 without specifying what your business idea as such consists of? Investors are interested in knowing how the materials that make up the product will be obtained, as well as how to produce it. The more detailed and transparent you are, the more trust you will generate with your potential business allies.
Therefore, it is important to highlight the description of the production process of that product or service (How is it going to be manufactured? Will it be sold online, in a physical store or both? With what materials?) and the purchasing processes: the subject raw material to be used, the suppliers that are planned for it, the distribution channels and the economic relationship that is intended to be maintained with these commercial allies so that the business works correctly and is profitable for both parties.
When describing your products and/or services, it is also important that you describe their characteristics and qualities, such as:
- Its physical properties (packaging, type of packaging, measurements, materials)
- What value does your product/service bring to the market? What differentiating qualities compared to competing products? Its importance in the market (attributes, benefits, advantages and differentiating qualities)
- Reasons why the customer will buy your product and not the competition (the needs it satisfies and the problems it solves) Identify the problem your product solves and why customers should prefer you and not your competition
3. Study the market and competition
To create a business plan for 2024, you must study the market or commercial environment in which your company will operate. Market research guides you about its behavior and allows you to better understand how you will approach it in the new period that is approaching.
Your business plan for 2024 should include a new analysis of the industry that allows you to re-familiarize yourself with the environment. The Entrepreneur portal states that the market study can incorporate a SWOT analysis and an environment analysis (PESTEL) to better determine what opportunities the market offers and the threats that may come from the competition. Some essential components that this analysis must include are:
- Market development in previous years and an approach to future development.
- Economic, technological, political and legal aspects that affect market dynamics.
- Past and current trends.
- Difficulties it presents.
In market analysis, you cannot forget about your competition. Although you probably already know who your company competes with, creating a business plan requires that you express your understanding of the market with greater specificity. In this sense, some of the questions that you should consider when studying your competitors are:
- What products do you offer?
- What are your clients like?
- At what price do you offer your products or services?
- What seems to be your expectations for 2024?
- What advantages do they have regarding your business?
4. Identify your target audience
Has your target audience changed in 2019? What characteristics of your target audience remain for next year? Creating a business plan for 2024 requires redefining the profile of the potential buyer, the individual to whom your company is directed.
People change over time, and you need to know what transformations your clientele has undergone to ensure that your service remains attractive to them. The customer analysis must include the aspects that best define the ideal buyer who will spend his money to consume your product or service. Features of this style can be:
- Profile (age, sex, profession)
- Geographic location.
- Hobbies, preferences.
- Needs and interests.
- Expectations.
- Shopping habits.
Based on these traits and others, you will be able to design marketing and sales strategies that are attractive to your target audience and that respond to what they are looking for in the market. As the entrepreneur states, the consumer profile makes it easy to define which marketing options are better and more relevant than others.
5. Structure the key operations of your business
Explaining how to make a business plan step by step would be an incomplete task without mentioning the importance of specifying the characteristics of your work team and all the operational logistics that your business requires.
It is one of the most technical sections, but also one that offers the most details regarding who makes the product and how they do it, as well as the organizational aspects of your company.
Identify who makes up your payroll, the functions of each one, the salary and the salary regime (weekly, biweekly, monthly, etc.). On the other hand, also mention the operating expenses that your business will assume during 2024.
With operating expenses, we refer to the means of distribution and marketing of the service, as well as the situation of the spaces that the different departments of your company will occupy. Some points that you should attend to in this regard are:
- Team: Who makes up your work team (payroll)? What will your salaries and job duties be? The hours of work your employees will undertake each day.
- Operation and logistics: What are the operational expenses that your company will have to consider monthly? such as: office rental, equipment, electricity, condominium, etc. How will the product or service provided be distributed?
The operations plan is one of the pillars of the business plan because it groups together all aspects related to the value chain of your products and services (human resources and capital).
In addition, it shows a description of what the work organization of your company will be and how the functions and responsibilities of each member will be distributed to comply with each of the links in the value chain.
6. Marketing and sales strategies
In this section, you will define the marketing and sales strategies of your products. Specifically, you must specify how your company is going to market and sell the products and/or services it offers. Here it will be important to define:
- The pricing, discounts and guarantee policy
- The channel through which the product and/or service will be distributed (retail sales, wholesale, online, etc.)
Finally, it is also essential to include the sales objectives and the times in which they want to be met, the activities that will be carried out to achieve them and the resources.
The marketing plan:
Here the marketing strategy and launch plan will be defined. Whether advertising and promotion of the product will be carried out through digital or conventional communication channels.
It is important to include a marketing budget that states precisely how much it will cost to carry out each of these strategies and a calendar of actions throughout the year.
7. Financial plan and projections
The financial plan includes the economic, accounting and financial analysis of your business. This section sets out the numbers and cash flows (ideally positive) that you estimate your company will achieve in 3 and 5 years. It is a projection of your sales, of what you expect to invest and obtain as profit in the short and long term.
Specifically, the data you need is:
- Cash flow.
- Sales estimates 3 to 5 years; costs and margins.
- Balance of results.
- Results account.
- Profit and loss.
- Breakeven.
- Basic financial profitability ratios.
7. Financing
If your company is looking for financing, you need to create a section within the financial plan. When a company is about to take its first steps, it is very common that it is looking for some source of financing for its launch. This financing could come from banking entities, foundations or independent investors that support emerging local ventures.
For these reasons, a business plan should also include a statement of reasons that expresses why you are applying for financial aid and what you plan to do with those resources in the first place.
In short, knowing how to create a business plan for 2024 is important because as an entrepreneur, it allows you to plan and visualize from multiple perspectives, the possible evolution of your business and your market as well as the positioning of your business within the market.
Without a business plan, it is very likely that halfway through your business idea will lose its direction, money and possibly fail by having its clear short and long-term objectives.
