There are two kinds of people in this world: those who write business plans and those who don’t. Unfortunately for the latter, they’re missing out! In fact, studies show that business plans boost future growth and performance by as much as 30%!
Of course, we couldn’t let our entrepreneurial free spirits miss out on those numbers. Whether you’re Type A or Type B, getting a refresher on the ABCs of masterful business planning never hurt anyone. Grab a notepad/tablet/futuristic writing device and let’s get started!
What Is a Business Plan & Why Do I Need One?
Essentially, a business plan is a formal document that outlines the goals and objectives of a company. It lays a super important foundation for future endeavors, one which you can refer to any time you need to be reminded of the big picture. And, if you rely on investors and external funding (like bank loans), a business plan is almost ubiquitously required.
If you need more convincing, think about it like this: Would you begin construction on a building without a blueprint? Yeah, exactly. Risk-taking is a crucial part of entrepreneurship, but, when it comes to business plans, it’s best to not leave it to chance.
Writing a Business Plan
1. Executive Summary
A short and sweet introduction is all you need to get the ball rolling. Executive summaries are usually no longer than half a page, and serve to both give a brief overview of your company as well as the business plan in question. Feel free to throw in major achievements and swoon-worthy statistics, but only as long as you keep it relevant and concise.
#2. Company Description
Unlike an executive summary, a company description focuses solely on the nitty gritty of your business. Here, you should be able to clearly state the following:
- The company name
- The company structure
- The history of your business
- Where your business is located
- How many employees you have
- Your values and mission statements
- The kinds of products you offer
- Who your target demographic is
- Your future plans, goals, and objectives
If you have a shiny elevator pitch, now is the time to use it!
#3. Market Research
Would you move into a new home without checking out the neighborhood first? Probably not, right? The same principle applies to launching an online business. No matter how insular you feel, nothing exists in a vacuum, especially in the digital realm. If you really want to play it smart, market research is one step you definitely don’t want to skip out on.
In addition to understanding your market, try to contextualize it as much as possible with historical trends and stone cold data. The better your insights, the better your approach.
Tip: Don’t forget to look into your niche as well as its overarching market! These two work in tandem.
#4. Competitive Analysis
Before you leave your competition in the dust, you have to know who your competition is. It’s not spying if it’s for a good cause! A competitive analysis is a great way to learn from the greats while also spotting potential structural weaknesses within your own business.
#5. Execution Plan
You know what they say — ideas are a dime dozen. It’s one thing to dream, but transforming those dreams into reality is certainly no small feat. An execution plan basically delineates how you’re going to launch and grow your business.
What will your day-to-day look like? Who will be responsible for what? How will you scale into the global market? Who will be your logistics partner as you navigate the world of eCommerce? Those are all fill-in-the-blanks, of course. 😉
#6. Marketing Strategy
Now, for the fun part! Your marketing strategy is all about your brand, who it’s for, and how you’re going to get it out there. Here, it might be helpful to think about the four Ps: product, price, place, and promotion. Aside from tactical details, like whether you’ll primarily focus on customer acquisition or retention, these cardinal marketing tenets give you a chance to get creative with things like packaging and design. Left brain, meet right brain!
#7. Financial History and Projections
Last but not least, finances! This can be a particularly tricky section as it requires a fair bit of technical know-how, but, for the sake of simplicity, let’s stick to the basics.
In short, you’ll need to include…
- a balance sheet, which shows assets and liabilities;
- an income statement, which shows profits and losses;
- a cash flow statement, which summarizes cash inflows and outflows;
- and a sales forecast, which outlines your sales projections over a given time.
Not so bad, right? A calculator and some historical data should do the trick, but, if that doesn’t work, you can always bribe an accountant with delicious pastries.
Bonus: Want to know the net worth of your business? All you need to do is subtract your liabilities from your assets. We told you business plans come in handy!
That about covers it! Remember that every business is unique, which means that no two business plans will look exactly the same. The important thing is having a functional roadmap that can guide you through one of the most exciting journeys of all — entrepreneurship!
Questions? Comments? Let us know! We want to hear from you.
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