How to Write a Business Plan
FOR A SMALL BUSINESS
When you hear the words ’business plan’, it’s easy to think of super corporate 100-page documents.
You might even be thinking: What's the point of writing a business plan? I know what I want for my business, and I'm working on getting there every single day.
A business plan is not just a tool for finding investors. A business plan is an overarching strategy outlining the why, what and how. It puts all your ideas, goals, estimates and structure down on paper.
It makes you think about what you want in the future, who you want to reach, and how you’re going to get there. It’s basically your ideas mapped out.
Regardless of what industry you’re in or what your business is, having a clear and thought out plan on what you want to do, how to get started, and your finances and growth can help you stay focused.
You may not think it is necessary when starting out small, or if you are just working on your own with a laptop. But writing it all down might help you see the pieces more clearly, which can illuminate any problems or solutions.
I know it can seem a pain but just think of your business plan as a roadmap.
Instead of guessing about customer needs, financial figures, product development and operation costs, take some time to sort it all out and then have the facts. Think of it as a way of getting from a world of ideas, without direction to a land of being organised and successful.
Remember that your business plan is not for investors, banks, or your colleagues. It’s for you. It’s a roadmap for your vision.
So let’s do it!
There’s just one last thing before you grab a pen and paper (or keyboard and screen).
In order to make the most out of your business plan, keep in mind these few rules:
1. THIS IS FOR YOU
There’s no need for sugar coating. You need the facts to help you move forward.
2. KEEP IT SIMPLE
Be clear and focused on what you want to achieve.
You don’t need tons of documents, charts and graphs. Focus on who you are, what you’re selling and how you are going to do it.
3. DO YOUR RESEARCH
About your industry. About your competitors. About your potential clients and customers. About it all. The more you know, the better your projections and estimates will be.
4. MAKE IT ADAPTABLE
The market will change, and your services will change too. Review your plan and objectives a few times a year to ensure you’re still on the right track, and to see if a change needs to be made.
5. PUT IT ALL IN
Remember, this document is for you. Some of your ideas might sound a bit silly now, or they may only make sense after a few years of progress. But this document is for you to remember all your dreams. If you want, add some images and personal content to make your vision come to life.
THE BUSINESS PLAN
Your business plan will give you (and anyone else who reads it) an outline of your business, how you operate and how you make money. But there is no right or wrong here, the most important thing is finding a business model that works for you and explaining how it works.
Here are a few things to include:
SUMMARY & GOALS
The executive summary is a brief summary about your business. It offers a quick who, what, where, when and how.
This is where you put all your goals, ideas and ambitions and the reason you’re starting your business.
I also advise you to include where you want to be in 6 months, 1 year and 5 years.
PRODUCTS & SERVICES
Go into detail about what you are offering - what your products or services are, where these offerings will be available, who is going to pay for them, how much it is going to cost, and how you are going to differentiate yourself from other competitors in the market, if you need to.
I also like to consider the 'why'. Why are you offering these products or services? Who is it going to benefit from them, and how?
In the beginning, it’s better to keep it simple and focused and get really great at one product or service. If you have many different ideas, write them down and save them for later.
Describe your industry and your ideal customer.
Interestingly, knowing your customer will be your main guide when describing your business. You might think anyone can come - the more the better. But then it’s very hard to find your customers' pain points, and there’s a chance you end up being too vague and not attracting any specific group of clients.
Choose a group of people you would like to work with and focus on their habits and needs.
Who do you want to buy your product or service? How will you find them? How will they find you? How will you convince them?
Do some research on your specific market and define the gap that you and your business can fill.
Define the trends, directions and possibilities in your field.
Find your competitors, and look into their strengths and weaknesses.
Writing a list might be useful: Name your competitors, and note what they’re offering, who they’re targeting, and how much they’re charging.
Understanding where you fit in the market is important. Try completing a competitor SWOT analysis, it can help you determine your advantage, how to market your product, and how to stand out.
How are you going to run your business? Define the best way to get the job done, and describe your processes.
And as part of the processes, identify the main roles. Will you need additional staff to run your business? What skills do they need to have?
This is where you give details of your marketing plan.
How do you reach potential clients and sell your product or service? Describe your positioning, pricing, promotion and distribution.
Aka how do you plan on making money?
Describe how you will fund your business then create a revenue forecast and estimate expected costs over the next 6 - 12 - 24 months.
Include your startup costs, your general operating expenses and define your financial goals. See how much money you need to make your business profitable.
This is the part that you'll want to keep updated throughout the year. Add some milestones for yourself to check whether you're on track.
Lastly, when creating your business plan, remember that it’s not a one-time thing, and it’s not set in stone. Your plan gives you a map but make sure you react to your market. With time, you and your business will change and that’s normal. Just remember to review your plan and update it. Don’t delete the old plans though, even if they seem outdated or unprofessional. Looking back at what has changed will help you learn and evaluate what works. In fact, your very first ideas might come useful at unexpected times.
Are you thinking about rebranding your business?
It's not an easy choice, I know. I even wrote a post about when I think it's a necessary choice. You can check it here ›››