Now that you’ve decided to take the plunge into business ownership, you need to organize your thoughts and put your business plan down on paper. Sometimes novice business owners think that the business plan is something that can be skipped. It shouldn’t be. There are many benefits to your business and to yourself as an entrepreneur, to having a business plan.
Many times, excellent business ideas are conceived but lack a critical element. Writing a business plan can help you realize that you’re missing something as important as funding, marketing, supplies, and so on. Writing a business plan can be intimidating, and it's hard to know where to start and what to include.
Let’s walk through writing a business plan together, step by step. Research will be a key component to each step, so be prepared to spend the time and do the work. It will be worth it in the end.
Your executive summary will set the tone for your entire business plan. It should serve as a concise overview. If you write this section first, be sure to review it again when you are finished, to be sure that it offers an accurate description of your business as you envision it. The summary should be short and to the point; not drawn out or rambling. It should include things like your business’ name and location, a mission statement, and the products and or services you plan to offer. It should also clearly state the purpose of your business plan. Is it to outline your business strategy; or is it a plan you hope to send to potential investors?
This section should be a detailed overview of your business. It should start with a brief history of your business and what needs you plan for it to meet. It also should include information about its legal structure. Are you operating as an LLC, a corporation, partnership, or a sole proprietor? It should also include summaries of your products, services, customers, vendors, growth plans and goals, financial projections, and long-term business goals.
Products and Services.
It’s in this section that you should lay out in detail your plans for the products and services that you plan to offer. Your language should be clear and concise. You should include information about your pricing structure, suppliers and the revenue that you plan to generate. It’s okay to be opinionated to an extent. Include the benefits of your products or services, as well as why your offerings are better than the competitions. It’s also important to include any patent, copyright or trademark information here. If you have plans for future expansion, including new products or services, include that in this section as well.
This section will most likely require a large amount of research. If written well, it will demonstrate your knowledge of the market and how you plan to achieve success within it. It will include demographics of your target market as well as specifics about your industry. Here, you will evaluate your competitors’ strengths and weaknesses as well as devise a marketing strategy of your own. Include information on both your planned and historical marketing efforts.
Design and Development Plan.
This is perhaps the meat of your plan. This is where you should go into detail about your sales strategy. How do you plan to reach your target customers? How will you penetrate the market? The design and development section should outline exactly how you plan to operate your business throughout the entire cycle. It should include information on acquiring supplies and products, manufacturing, sales, delivery and so forth. For a small business, this section can also include information on employees and management structure. If you are planning on hiring a team, this section should outline the organizational structure and responsibilities of the team.
It is a good idea to solicit help from a certified accountant when preparing the financial section of your business plan. It should be one of your last steps after you’ve reviewed market analysis and outlined your business’ overall goals. The numbers here should back up everything else that you’ve included in previous sections. It should include projections of profit and loss, cash flow, and balance sheet.
All fantastic business ideas have to start somewhere. Writing a business plan can help you sort out if your idea is a fantastic one or an unrealistic one that will require more resources and time than you have available. It can also make the picture clearer as to whether you need to be hired help or can manage the business creation alone.
What questions or suggestions do you have for writing a business plan? We would love to hear from you!
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Dawn Berryman is the founder and owner of MarketMommy.com and Market Mommy:: The Blog, online marketing resources for mom entrepreneurs. Market Mommy shows moms how and where to market their businesses. She holds a B.A. from Indiana University in English, communications, and journalism and has worked in the marketing/communications field since 2002. She resides in rural Ohio with her husband, three children, and their Wheaten Terrier. Dawn has operated an online business since 2006 and has worked from home full-time since 2017. For more information, please see: Market Mommy.