Now that it’s 2018, it’s time to get your business on track and growing with a business plan!
What’s so great about a business plan? A lot! With a business plan, you can:
- Map out the future of your business
- Develop a deep understanding of how your business is put together
- Greatly improve your chances for success by thoughtfully analyzing your plans for marketing, sales, and operations
- Plan strategic goals and understand how to reach them
- Forecast how much money you’ll need as you grow
- Demonstrate to potential investors, lenders, and business partners that you have a road map to success
Given all these benefits, it’s no surprise that having a business plan is how the best entrepreneurs create a strategy for their business and stay organized as it grows. They also know that with a plan, they are less likely to run into serious problems as they operate their business, and more likely to be able resolve the problems that do arise.
How to Write a Business Plan in 8 Simple Steps
Now that you know why having a business plan is important, it’s time for you to sit down and create one. But isn’t writing a business plan hard? It doesn’t have to be! To help you along the way, we’ve broken the process down into 8 simple steps.
Step 1: Brainstorm and Write Everything Down
First up, stop and think. Make a list of everything you can think of about your business. What inspired it? What products or services will it provide? Who will its customers be, and how will you reach them? Where will your business be in one year? Five? This is a brainstorming phase, so be creative, not critical. You’ll also have plenty of time to hone your ideas in subsequent steps.
Step 2: Outline the Executive Summary
The executive summary is a high-level overview of the rest of your business plan. It will also be the first thing that prospective investors, partners, and lenders see about your business, so you should take the time to get it right. You’ll flesh out the whole summary in Step 8, but you should get a head start on it by writing one to two sentence answers for each of the following questions:
- How would you describe your company?
- What product or services will your business provide?
- Who is your target audience?
- How much competition does your business have?
- What is your business’ unique value proposition?
- Who are the key people in your organization?
- What are your short-term and long-term goals?
- What are your projected revenue streams?
Step 3: Tell Your Company’s Story with a Company Description
The next section of your business plan should be a company description. Here, you get to introduce readers to your company with a brief overview. How did it start? What is its mission? Who are its customers? What makes it unique? What is the user experience with your business like? This section should answer all these questions to familiarize readers with your business and make it relevant.
Step 4: Explain Your Operations and Management Structure
Now that you’ve introduced your company, it’s time to give a little bit more detail about its operations and management structure. This will also help your readers understand what to expect when they work with you—will the experience be marked by certainty or frustration? Also, you can split this section into two subsections, an operations section and a management section:
- Operations: Here, explain the legal structure you’ve chosen for your business, such as a sole proprietorship, partnership, corporation, limited liability company (LLC), or non-profit. Additionally, you should consider how your choice will affect your business operations, taxes, and your personal liability, and choose the option that best fits your business goals.
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- Management: Introduce the members of your management team, what they will do in the business, and what experience they bring to the table. Include your support staff and the outside third parties that will help your business succeed, like accountants, lawyers, consultants, vendors, and partners.
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Step 5: Write a Marketing Plan
Your marketing plan provides a more detailed look at your products and services, the market into which you are launching, and how you plan to promote your business among prospective customers. Also, you can split this section into the following four subsections:
- Products and Services: In this subsection, describe each product or service your business will sell, and list the features or benefits provided by each. For example, you can do this through a narrative or using charts or spreadsheets; whichever you think communicates the information best.
- Potential Customers: Who are your products or services for? Gather as much information as you can about your target audience and use it to answer questions such as: How big is it? How will your product or service improve your customers’ lives? What are their buying behaviors? What (or who) influences their purchasing decisions?
- Competition: This subsection lets you demonstrate your mastery of the competitive landscape in your market. In addition, you can list what other businesses offer similar products or services to your potential customers. What do those businesses do well? Where could they improve? How will you differentiate your own business to attract customers?
- Promotion: Finally, it’s time to explain how you will reach your customers. Will they find you via online search, through referral programs, paid advertising, social media, or trade shows? Also focus on connecting your customers with what they’re looking for, not producing the flashiest ad campaigns or “going viral.”
Step 6: Write a Financial Plan
Ask yourself questions such as how will your business spend and make money, and how long will it take for your business to become profitable? These are questions you will need to answer in the financial section of your business plan. Also, you can work with an accountant or business consultant to develop this section of your plan, but remember that it will evolve as your business grows.
Step 7: Include Resources and References
The last section of your business plan should be an appendix with any documents, studies, surveys, licenses, and research referred to elsewhere in the plan. What you include will vary depending on what you’ve relied on in drafting your business plan. Also, you should only include what is necessary to support what you’ve said elsewhere.
Step 8: Review Your Business Plan and Write the Executive Summary
Finally, you’re ready to review your work and finalize the executive summary you outlined in Step 1. Make sure your business plan presents a cohesive, compelling picture of your business in a thorough and professional format. Then take the crucial components of each section and use them to create an engaging executive summary that draws the reader into the rest of your business plan.
Get Your Business Ready for 2018
If you are planning to start a new business in 2018, now is the perfect time to begin working on your business plan. Additionally, if you already have a business, but have never created a business plan for it, it’s never too late to do so. Creating a business plan now will get you organized and ready for 2018 and beyond.