Starting a business plan can seem daunting at first, but there’s nothing to fear! Follow these seven steps to build a plan that sets you and your small business up for success.
Creating a business plan is a major accomplishment for any small business owner. Clarifying your business goals and strategy on paper is like creating a roadmap for your business' growth and success. As exciting as it can be to lay out your small business vision, templates can often be 20 pages or more — an enormous undertaking for a busy entrepreneur!
A well-crafted business plan can help you launch, grow, and fund your small business.
The first step toward successfully building your business plan is to break the plan into sections and complete one portion before moving onto the next. Think about your business plan as an inverse pyramid: Start with the broadest elements — your vision and overarching goals — and work your way down into your tactics and business operations. By the time you work through each section, you’ll have the start of a comprehensive business plan that you can show off to potential investors, funders, and partners!
1. Define your business' mission and goals.
What is the purpose of your business?
What do you hope to accomplish?
Your mission and goals should be specific, measurable, achievable, relevant, and time-bound (SMART). You should outline anything about your goals and objectives that are unique or set you apart from competitors.
2. Describe your products or services.
Who are you?
What do you do?
Clearly and concisely outline what your business offers and how it meets the needs of your target market. If you have details about your products and services, be sure to include them. This includes pricing, quantities, descriptions of materials and components, and types of services. Your full offering should be presented here.
3. Research your industry and target market.
Who are your customers? What are their behaviors?
Who is your competition?
Before you start writing your business plan, it's important to have a good understanding of your industry and the customers you'll be targeting. Research your competition and gather data on market trends and customer demographics to inform your business plan. This portion of the business plan is designed to help you provide market differentiation — the things that distinguish your small business from others and create perceived value that will make a customer choose you.
4. Develop your marketing and sales strategy.
How will you reach and persuade potential customers to buy your products or services?
Your marketing and sales strategy should include information on your target market, pricing, and distribution channels. Clearly outline how you intend to reach customers, including through digital and traditional marketing, partner outreach, and any discounts or incentives you plan to include in your sales process. Be sure to offset these expenses in your pricing.
5. Build a financial plan.
How will you generate revenue?
What are your costs?
This should include a budget, projected income statement, and cash flow analysis. Your financial plan should outline how you’ll generate revenue and manage expenses to achieve profitability.
6. Outline your operations and management.
How will your business be organized and run on a day-to-day basis?
This section should include information on your management team, production processes, and any necessary equipment or resources.
7. Review and revise your business plan regularly.
What is new about your business?
What updates need to be made?
Your business plan shouldn't be set in stone! As your business grows and changes, take time to review and update your plan to reflect these changes.
By focusing on one section at a time, you can carefully consider each element to your plan. Once you have these steps completed, take a moment to polish the document — add formatting, your logo, and photos that paint a compelling picture of your business. This will help them understand your business plan and your vision for the future.
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