Whether you're an entrepreneur preparing to start a new business or auditing your existing situation, the thought of writing a business plan can be intimidating. In your head are thousands of thoughts of how you envision your company -- you think about the sales, marketing, costs, start-up, branding, budget, and on and on. Your business is on your mind majority of the time and you're constantly thinking of new ways to grow it.
Writing a business plan is your opportunity to get all those amazing thoughts out of your head, onto paper, and working for you. Instead of bouncing around off each other, your ideas, concepts, and goals will now be formulated into a plan. A business plan, your business plan.
Your business plan is your foundation, whether you are structuring, running, or growing your business. It’s kind of a big deal. It’s OK to feel a little overwhelmed at first, countless numbers of entrepreneurs before you were overwhelmed by the idea of formulating their business. Your business foundation needs to start with your clearly defined mission and vision, these represent who you are, where you are going, and the principles that guide your actions.
An architect doesn’t build a house without blueprints. And you shouldn’t try to start a business without a well organized plan, designed to lay out each step from the foundation up and we're going to break it down into smaller digestible bites for you.
Start With Why
Everything you do in your business should have a why attached to it, like a two-year old asking "why" in response to every question you answer for them - you need to do the same in your business. Your years of experience are what hone your hunches, however, everything in your business plan; your website design, budget, forecasts, marketing plan should have reasons that are justified by research, statistics, and careful consideration. Avoid reasoning based on emotion like, “everyone else is doing it” or “Well, I think I should make 100K.” Ask yourself why
thoughtfully and often.
How Long Should Your Business Plan Be?
A traditional business plan averages between 30-50 pages, but as long as your thoroughly addressing each point, whatever length achieves that is perfectly fine. As a rule of thumb you want your reader to have a decent understanding in about 15 minutes. Use of headlines, bullets, white space, etc. are important to allow for easy skimming and readability. A text heavy document may be 25 pages and take longer to read than a 45 page plan that has charts, graphs, and visuals to aid in your explanations.
There are many variables that determine the length of your business plan. Deciding on the right mix of written and visual content and determining how it’s organized is based on the specific needs of your business and your overall intent (creating, restructuring, expanding). Remember to ask yourself why you chose to [INSERT EACH ACTION].
What Are Your Goals for Writing Your Business Plan?
The two main reasons for writing a detailed business plan are:
- To have a roadmap for driving your business towards success, a reference tool, a working guide, an anchor from which your actions set sail. Your business plan should help you run and manage your operations.
- To raise capital/investors/partners for starting, growing, or restructuring. If you are looking for money, banks and investors need to make sure you have a serious detailed plan for how your business is going to make money. A stack of Post-it-Notes and a handful of hope isn’t going to put any money into your account. Investors want as little risk as possible and they want a return on their investment. Don’t we all? You, the entrepreneur, must have a detailed strategy in your business plan to show (prove) why you are a smart investment.
What Should Be in Your Business Plan?
There are many components to developing your strategy and below we will introduce the key sections yours should contain. Again, depending on your particular industry or business type this will vary.
1. Executive Summary
All business plans should start with an executive summary. This shorter document should give the reader an snapshot of the detailed plan they are about to read.
- It should contain background information and concise highlights.
- When written well, the executive summary should be able to stand alone as a document that explains key points and entices the reader to want to learn/read more.
- It must be engaging or the rest of your business plan may be ignored.
2. Company Description
Typically following the executive summary is your company description. This portion of your business plan strategy is part informational and part excitement.
- Begin with your best elevator pitch.
- Introduce your company name with excitement.
- Provide your location, hours of operation, and what you do. (product or services)
- Your Mission Statement is your company’s purpose, it belongs here.
- Provide a description of the management/ownership structure.
- Tell the reader where you see your company in the future. (Vision Statement)
- Avoid going into too much detail about information you will be addressing later.
3. Market Analysis
If you are going to succeed as an entrepreneur you need to make sure you understand your market.
- Market size/growth
- Barriers to entry
- Demographic studies
- Key competitors
- Target markets
- S.W.O.T analysis (strengths, weaknesses, opportunities, threats)
4. Product Descriptions
In this section you want to showcase what you have to offer your client/customer.
- Describe the product or service you are providing
- Identify the problem (for your customer) that your product solves
- Explain the benefits your product offers your potential customer
- Discuss any future products that may be coming
- Outline any and all costs related to services and products
5. Marketing Strategy
One of the most overlooked and neglected components of business strategies is marketing; what, when, where, and of course, how much will you spend. This topic could be its own blog or ebook, listed are a few key items with an emphasis on websites.
- Who is your target market(s)? Build a buyer persona or multiple personas if you have more than one type of customer/client
- Set realistic goals regarding how many and what people you want to reach. (we will gain exposure to 100,000 people in the xyz)
- Set specific objectives that you are going to accomplish. (from that 100,000 people we expect 40,000 visits to our website)
- Content development (the design) Launching and Landing pages
- Lead magnets
- Setting a budget for your campaigns
- Tracking your campaigns clicks and conversions
- Which social media campaigns are you going to run?
6. Organizational Structure
This section outlines how your company runs.
- Outline the hierarchy of leadership
- Describe the roles and responsibilities of management
- Develop a flow (chart) of how communications will travel through the organization internally and externally
- Describe any departments, divisions, jobs, and their functions
- Policies, procedures
7. Financial Analysis/Projections
As a new business you may not have a lot of sales figures to work with (if any). It’s alright to have lofty goals just make sure they are reasonably attainable and you can show how you are going to get there. Things to consider.
- Start-up costs
- Sales forecasts
- Balance Sheet-Assets and Liabilities
- Income Statement, you don’t have the income yet but nail down your costs. Your variable costs will change but you can get exact figures for all of your fixed costs. Examples of fixed costs are:
- Interest expense
There are a lot of resources available to you as an entrepreneur, use them. Two of the best free resources available are the Small Business Administration
(a free mentoring and resource program). You will need professional help along the way, hire experts and hire them before you need them. We can’t be masters of everything, you may need to hire lawyers, designers, content writers, and payroll companies, just to name a few. The internet has countless templates and examples at your disposal, as well as places you can find the experts you're looking for.
The number one most important, absolutely critical thing to do is...breathe. Yes, it seems like a lot, and, I'm not going to lie, it is a lot. As long as you remember that you can’t write more than one word at a time
, you’ll be fine. Take all those entrepreneurial ideas and start getting them on paper -- one at a time. The more you organize your entrepreneurial thoughts on paper, the more organized and strategic your business plan will be. Your well thought out, detailed business plan will be your blueprint for success.