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Every business starts with a vision. That vision is summarized and communicated through a business plan. A strong business plan outlines your high-level hopes and dreams, as well as short-term and long-term goals, a budget, and everything else you need to get started.
This guide will walk you through the process of creating a business plan that you can follow when starting your business and that will guide your business operations.
Brainstorm an executive summary
Creating a summary
An executive summary is a critical first step in any business. To grab investors' attention and keep them interested, you need to summarize the basic facts of your business in an elevator pitch-style essay. This essay should tell them the name of your business, the product or service you sell, and the market you serve.
Get help
When writing your executive summary, you should have several different options. Enlist a few thought partners to work through the possibilities and determine the best one.
Create a company description
Once you have completed your executive summary, you can begin creating a company profile with more specific information. The description should include the company's registered name, address, and any key employees involved.
Your business description should also include your business structure: sole proprietorship, limited liability company (LLC), partnership, corporation, etc. Here, you specify what level of ownership each person has within the company. Finally, include a section outlining your company's history and development to date.
Brainstorm your business goals
Wherever you are in your business journey, return to your goals, evaluate your progress towards achieving ongoing objectives, and set new goals to work towards.
Number-Based Goals
Goals can cover different sections of your business. Financial and profit goals are obvious when starting a business, but there are other goals to consider when it comes to brand awareness and growth. For example, you might want to gain a certain number of followers across social channels or increase your engagement rates.
Another goal could be to attract new investors or, if you're a non-profit business, to find grant funding. If you want to grow, you also need to set revenue goals.
Intangible goals
Goals that have nothing to do with trackable numbers are also important. These can include advertising your business to the general public, receiving great customer reviews, etc. These goals are essential in determining the direction of your business and where you want it to go.
Describe your service or product
Your business plan should include a section that describes your services or products. It can also explain how you fit into the current market and offer something that's needed or something completely new. If you have any patents or trademarks, you can include those as well.
If you have any visual aids, include them here too. This is also a good place to document your pricing strategy and explain your materials.
Conduct market research
This is the part of your business plan where you can explain your expertise and approach in more detail. Show how the service you're offering is important to the market and fills a key gap.
You can also explain your position within your industry, how you compare to other companies, and your competitive advantages in the marketplace.
Create a financial plan
In addition to your financial goals, you should create a budget and plan your weekly, monthly, and yearly expenses. There are various costs to consider, including operational costs.
Business Operational Costs
Business rent is the first big cost to factor into your budget. If your business is remote, an alternative to rent will be the cost of software to keep your operations running virtually.
The next thing to consider is the cost of marketing and sales. Investing money in getting people to know about your business is just as important as its functionality.
Other Expenses
While you can't predict disasters, unexpected costs can arise while running a business. It's important to factor these potential costs into your financial plan so you're not caught completely by surprise.
Conclusion
A business plan is essential for businesses of any size as it allows you to define your business's current and future goals. To grow your business you need a vision, and creating a roadmap in the form of a business plan will pave the way for success.
FAQ
How do I write a simple business plan?
When writing your business plan, prepare as much information as possible and simplify it to the most relevant information. A simple business plan still needs all the parts mentioned in this article, but it can be written very clearly and directly.
What are some common mistakes in business plans?
The most common mistakes in business plans are general writing issues like grammatical errors, spelling mistakes, etc. It is important to be clear about your writing structure and proofread your business plan before sending it to investors or partners.
What are the essential items that should be included in a business plan?
When writing your business plan, make sure to cover your business concept, your industry analysis (including potential customers and a market overview of your products or services), how you plan to execute your business vision, how you plan to grow your business if it is successful, your current cash on hand, potential investors, and all financial data related to your industry, including your budget plan for the next few years.
