So far in our Starting a Business series, we’ve covered the topics, Is It for Me and Is My Business Idea Good Enough? (If you’re just joining us, take a look at the two pieces to get caught up.) Now we’re ready to dive into the next step and start getting down to business – Creating a Business Plan.
Your Business Plan: The Essential Road Map for Success
You probably wouldn’t take a cross-country road trip without first mapping out the essential routes beforehand. Even the most spontaneous of travelers (and I’m in that group) are the smartest when they set out with the proper tools to succeed. Apps like Waze (which I personally can’t live without) not only map out the best routes to take, it automatically alerts us to possible hazards, dangers, construction—basically anything that can hinder our journey—and re-directs us back to safety.
Your Business Plan is the Waze for your business. It strategically routes out the next 3-5 years, helping you get to your destination, successfully and profitably. Without it, you could be in for a few pitfalls and (unwanted) surprises. But with it, you will be ready and prepared for what is ahead. Let’s get to it…
Pre-Writing Your Business Plan
Before you begin writing your business plan, you should really outline the key components you want to implement. This in itself, can be a major challenge. In order to get you thinking about what you need to add, here are some questions you should be asking yourself:
- Why Do I Even Need a Business Plan? As I mentioned before, think of your business plan as your road map. You need it because it provides structure and planning for your future. It will give you goals to reach and the steps that must be taken.
- What Are My Goals? In five years where do you want your business to be? This question is general, but your goals should be specific: financially, size and growth, location, expansion, time and money. Check out this Goals and Objectives Checklist to make sure you haven’t missed anything.
- What Strategies Will I Use? Once you’ve defined your goals, you need strategies in place to reach them. A good business plan has various strategies in place to make sure you succeed.
- How Will I Classify the Organizational Structure? Simply stated, what are the titles and responsibilities of all employees (including yourself) of your business? Your business plan should clearly define all roles inside your business, along with future roles.
- How Long Should it be? This all depends on the type of business you are about to start. There are various lengths of business plans, but the main idea is this: Keep it simple! You want your plan to be as direct and candid as possible. You want to get your point across in the easiest manner to read as possible.
You’ve finished the pre-writing stage of preparing your business plan, but how do you start to implement what you’ve just brainstormed? The truth is there is so much help out there, you just have to find it. And that’s what can be challenging. So in order to make it a little bit easier on you, we’ve compiled a list of tools that are not only awesome, but can really make a difference in a huge way.
Here are a few that I’ve found to be really, truly beneficial:
- Business Startup Calculator. I briefly mentioned this fantastic tool in my 10 Business Strategies I Learned from Starting a Non-Profit post, but it’s worth mentioning again. The Business Startup Calculator helps you calculate how much money you’ll need to launch your business. From one-time startup costs to ongoing monthly expenses, the calculator thinks of everything! Simply enter the amount for each expense and click, Calculate when you’re finished. Believe me, your budget will thank you.
- Business Plan Templates. If you are completely in the dark on how to put your business plan together, downloading a template might be the way to go. There are many great templates out there, from the simple to the completely guided, depending on your level of comfort. LivePlan and BPlan offer various types of packages – both free and paid. Find one that is perfect for your type of business.
- Sample Business Plans. Entrepreneur has a page filled with sample business plans to give you a look into how other businesses in your genre are writing them. They have a variety of FREE (yes, the best kind) of samples, presentations and plans.
Writing Your Business Plan
Wow! We’ve given a lot of information and we haven’t even begun to write a single word of our business plan yet. Don’t worry. The more planning and outlining you do in advance, the quicker it will be to actually sit down and write the plan.
Your business plan should contain sections answering all the questions we’ve laid out earlier. Forbes did a great job of breaking it down, which we’ve grouped into the following 10 sections:
- Mission Statement – Defining the business’ overall purpose.
- Company Analysis – Mission Statement. Product & Service provided.
- Industry Analysis – Market trends and changes.
- Competitive Analysis – Competitors and their strengths & weaknesses.
- Customer Analysis – Your target audience, their needs and demographics.
- Marketing Plan – Strategies and tactics to reach your customers.
- Management Team – Roles and responsibilities of your team (current and future).
- Operations Plan – The goals of your business and how you plan on attaining them.
- Financial Plan – Projected profits and revenues as well as startup costs and funding needed.
- Executive Summary – Summary briefly outlining: Why and How your business will ultimately succeed.
The image above shows a creative way that The Area Office on Aging of Northwestern Ohio, Inc. constructed their business statement. Very cool indeed!
It might look like a whole-lot of work, but if you follow our steps and guidelines your business plan will be up and running in no time. You’ll have your road map in front of you, and you’ll be ready to hit the pavement!
Up Next: Pinpointing Your Business Demographics