How Long Does It Take to Write a Strategic Business Plan?
Market Analysis
One of the key elements to a business plan, and what takes the most time to compile, is the market analysis. While the market analysis portion of your business plan is an overview of data, you do need to include the facts and figures in the business plan appendix. You first need to research the industry your business is in, including the life cycle of the industry, the projected growth rate and the customers within the industry. You have to identify your target market and then research the details regarding that target. You also need to analyze the competition within your industry. All of these elements require research and time to compile information.
Market Testing
A crucial element of the Market Analysis section of your business plan is market testing. While this is not a requirement, it will increase your chances of gaining funds from an investor tenfold because it shows just how well your product or service will do with your designated target market. In order to perform market tests, you first need to develop a sample or prototype of your product/service and determine the price range you will charge. Then, take that sample to the public, focusing on those within your target market. Ask them if they would buy the product, what they like and dislike about it and how it compares to other products/services within the industry. You can hire a market testing firm to do this for you in focus groups, or do it yourself. Either way, it can take several months get obtain an accurate assessment.
Organization/Management
The Organization and Management section of your business plan will take some time to compile as well. Potential investors expect to see a lot of information about the structure of your business and the people running it. To start, you will need to develop an organizational structure with your management team, and it may take several meetings to iron that out. Next, you need to list ownership information on the company, including the names of owners, percentage of ownership and details of involvement with the company. You also need to compile profiles for your management team and board of directors, which are more or less resumes. Depending on the response time from your team members, you can expect this process to take a few weeks.
Strategies
Another portion of a business plan is the Marketing and Sales Strategies. Again, this will take some time to develop as you will either need to meet with your marketing and sales teams to come to an agreement on strategies or, if you're just getting started, develop those strategies yourself. You will need to research effective strategies and techniques within your industry that can reach your target market, as well as a timeline for using these techniques for your company. Understandably, just compiling the strategy details can be time consuming.
Financials
Potential investors will need to see numbers to make sure your business can use the funds provided and come out on top. Established businesses must provide historical financial data for the business, including income statements, balance sheets and cash flow statements, over a time frame of 3 to 5 years. Additionally, whether you have an established business or are just getting started, you will have to calculate prospective financial information for the next 5 years. You will need forecasted balance sheets, income statements, cash flow statements and expenditure budgets. For the first perspective year, these documents need to be monthly or quarterly expectations, followed by quarterly or annual expectations for years 2 to 5 of your projection. Again, all of these calculations can take several months to determine.
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