How to Write a Successful Business Plan
8/9/2024 - Starting Your Business | Small Business Resources
Starting a business takes a leap of faith, creative ideas and hard work around the clock. Before you open your storefront or online market, creating a business plan is a vital part of making sure your business is around for the long haul.
In this article, you’ll learn that a business plan should be:
If you’re new to the business world, a detailed plan can help you foresee roadblocks and additional considerations to take before you get too far into the formation of your business.
Having a carefully thought-out plan will also make your business more attractive when applying for a loan or other startup costs. Investors also expect to review a business plan before giving a company their funds.
Describe why you entered the marketplace, who your target customers are and what problem you are solving for them.
Consider including the history of your business including idea formation and original partners. Include the current leadership and structure, whether your company is a sole proprietorship, a limited liability company (LLC) or multi-location corporation.
Outline the process you take to create, produce and deliver goods. Consider including the names of any vendors, manufacturers and shipping partners, as well as their costs.
If your business features new innovation, include details on any patents, trademarks or copyrights you have acquired.
For creators, outline how you watch for trends to capitalize on and the time it takes to make a new item available.
Other businesses like yours are already in the marketplace. Include data on their market share if available and your goals to reach their level.
Depending on the location of your business, regional or national, identify key competitors and how you can position yourself well against them. For instance, can you offer cheaper shipping or more variety?
This section of your plan may feel overwhelming, but there is an acronym to help you get started. Explore your company’s “SWOT,” or strengths, weaknesses, opportunities and threats to develop a market analysis.
Even the best product needs a strategy to tell shoppers how and why to buy it. This section of your business plan can help you determine what percentage of your budget to allocate for advertising. Social media and digital marketing offer a wealth of ways to advertise your business even if you have limited funds.
Outline an annual marketing strategy to capitalize on holidays and seasons that fit your product offerings. Determine if you need to work with a regional or national print publication or place digital ads. Depending on the type of service or product, observe how similar brands capture potential customers with sales and specials.
There may be times when you need to pause advertising and social media due to a national disaster or other newsworthy event. Outline this process in your business plan in case you’re unable to make decisions during a crisis.
The financial section of your business plan should be as accurate as possible. Talk about your current holdings and assets, cash flow and anticipated sales for the year. You will need to include a balance sheet and profit and loss statements.
This is where a trusted accountant can be useful. Consider budgeting to hire an accountant to help you calculate projections, inflation costs and insurance needs.
Your projections should be realistic but also be flexible enough to grow with your business as you experience success.
It’s reasonable to need startup costs, whether equipment or storefront space. Close out your business plan with any funding requests.
Include how you plan to use the funds, what type of funding (grant, loan, etc.) you desire and how much of your own money you’re investing.
In this article, you’ll learn that a business plan should be:
- Actionable – outline product processes and sales strategies
- Measurable – what are your short-and long-term goals?
- Scalable – build flexibility into the plan to reflect the changing size of your company
Why Write a Business Plan?
A good business plan serves as a template, whether you sell handmade beach décor in Myrtle Beach or run an upscale coffeeshop in downtown Atlanta. They are a roadmap to success for all types of entrepreneurs.If you’re new to the business world, a detailed plan can help you foresee roadblocks and additional considerations to take before you get too far into the formation of your business.
Having a carefully thought-out plan will also make your business more attractive when applying for a loan or other startup costs. Investors also expect to review a business plan before giving a company their funds.
What Makes Up a Business Plan?
1. Detailed Company Description
Clearly state what you sell or provide in your executive summary. Do you sell a product? Do you offer a service to a specific group like homeowners? Do you only offer digital goods?Describe why you entered the marketplace, who your target customers are and what problem you are solving for them.
Consider including the history of your business including idea formation and original partners. Include the current leadership and structure, whether your company is a sole proprietorship, a limited liability company (LLC) or multi-location corporation.
2. Product Process
Outline the process you take to create, produce and deliver goods. Consider including the names of any vendors, manufacturers and shipping partners, as well as their costs. If your business features new innovation, include details on any patents, trademarks or copyrights you have acquired.
For creators, outline how you watch for trends to capitalize on and the time it takes to make a new item available.
3. Market Analysis
Other businesses like yours are already in the marketplace. Include data on their market share if available and your goals to reach their level. Depending on the location of your business, regional or national, identify key competitors and how you can position yourself well against them. For instance, can you offer cheaper shipping or more variety?
This section of your plan may feel overwhelming, but there is an acronym to help you get started. Explore your company’s “SWOT,” or strengths, weaknesses, opportunities and threats to develop a market analysis.
4. Marketing and Sales Strategy
Even the best product needs a strategy to tell shoppers how and why to buy it. This section of your business plan can help you determine what percentage of your budget to allocate for advertising. Social media and digital marketing offer a wealth of ways to advertise your business even if you have limited funds.Outline an annual marketing strategy to capitalize on holidays and seasons that fit your product offerings. Determine if you need to work with a regional or national print publication or place digital ads. Depending on the type of service or product, observe how similar brands capture potential customers with sales and specials.
There may be times when you need to pause advertising and social media due to a national disaster or other newsworthy event. Outline this process in your business plan in case you’re unable to make decisions during a crisis.
5. Financial Overview and Projections
The financial section of your business plan should be as accurate as possible. Talk about your current holdings and assets, cash flow and anticipated sales for the year. You will need to include a balance sheet and profit and loss statements. This is where a trusted accountant can be useful. Consider budgeting to hire an accountant to help you calculate projections, inflation costs and insurance needs.
Your projections should be realistic but also be flexible enough to grow with your business as you experience success.
6. Funding Request (If Necessary)
It’s reasonable to need startup costs, whether equipment or storefront space. Close out your business plan with any funding requests. Include how you plan to use the funds, what type of funding (grant, loan, etc.) you desire and how much of your own money you’re investing.
A Business Plan Should Be...
- Actionable – outline product processes and sales strategies
- Measurable – what are your short-and long-term goals?
- Scalable – build flexibility into the plan to reflect the changing size of your company
What Can Make a Business Plan Effective?
Include as many details as possible but skip the jargon.Emphasize why your company is unique in the marketplace, especially if you’re seeking investors.
Ask another business owner to review your plan. An experienced entrepreneur can see minor flaws or missing items that you need to address.
If budget allows, include high-quality photos of your location and products.
Set a date to review your business plan every year or every 3 years. Update relevant items like market analysis and financial projections.
