Starting a business can be an exciting and intimidating experience all at once. You have the enthusiasm to share your unique gifts with the world, but you may feel overwhelmed by all the things you need to do and don’t know where to start. Don’t stress, I’m here to help!
Creating a business plan is a great way to get all your amazing thoughts and ideas on paper. However, the thought of writing a business plan makes many cringe. But regardless of your business type, having a clear and thought-out plan will help you stay focused and set you up for success.
What is a business plan?
Before we dive into how to write a business plan, let’s first define what a business plan is. According to Bplans, “a business plan is a guide—a roadmap for your business that outlines goals and details how you plan to achieve those goals.” You’ll use your business plan to develop, manage and expand your business.
Why is it important to create a business plan?
Writing a business plan is a critical step for any aspiring entrepreneur. Investing the time needed to carefully think through all the vital elements of your business is crucial. Here are a few reasons why you should write a business plan.
- A business plan helps to define and focus your business objectives and goals. It will provide you with a roadmap to achieve your desired results.
- Writing a business plan encourages you to think through every step of starting and managing your business. It helps you to anticipate potential problems and plan for their resolution.
- A business plan helps you to anticipate and plan for changes in the marketplace, customer needs, and competitive pressures.
- It can be used to attract potential investors, partners, and lenders and obtain a loan or other type of financing.
- A business plan can help you stay focused and flexible throughout the life of your business. It can provide a benchmark to measure progress and identify areas where changes are needed.
How to write a business plan
Now that we know what a business plan is and why it is important, let’s dive into how to write a simple business plan.
Here’s a list of the key sections you need in a business plan and what goes into each of them.
1. Business summary
The business summary reviews your business’s why and what. In this section, provide a brief overview of your company’s:
- Purpose and mission
- Vision statement
- Core values
- Legal structure (sole proprietorship, LLC, S Corp, corporation, etc.)
2. Business goals
Write down the goals for your business. What do you want to achieve over the next couple of months? It would be best to break these up into short-term and long-term goals. For example, you can set goals for 3, 6, and 12 months to start, and then you can re-examine where you are after a couple of months and make any necessary adjustments.
3. Target market
Your target market describes the industry you’re interested in, current trends, your ideal customer, and your competitors. To get a good understanding of your target market, you must do some research.
Understanding your target market will allow you to identify gaps in your industry and evaluate your competitors’ strengths and weaknesses to uniquely position your company to stand out from the competition.
4. Products and services
Go into detail about the products or services you will be offering and how you will differentiate yourself from other competitors in the market. You should include information about your pricing structure and the benefits your products or services will provide to your target customer.
An excellent way to think about this is to start by describing the problem you’re solving. Then, go into how you plan to solve it. You can look at what other companies are providing solutions to this particular problem and what sets your solution apart from theirs.
5. Marketing strategies
This section will allow you to think through and draft a marketing plan. How will you grow your audience, advertise, and promote your business to customers? Will you use social media, email marketing, paid ads, print advertising, press releases, etc.? Whatever marketing strategies you use, ensure they are tailored to your target audience’s needs and interests.
In this section, you’ll describe how you’ll finance your business over the next few months.
First, you’ll need to write down your startup costs. Startup costs include money spent on registering your business, getting a website, leasing office space, etc. Pretty much anything you need to get the company up and running.
Second, you’ll need to figure out how you’ll fund the business, whether you’ll be using your savings, credit cards, bank loans, etc.
Third, write down how much money your business will need for future growth and estimate your operating expenses and revenue.
Pro Tip: Start lean, don’t overspend on things you do not need. Ensure you have enough money to keep the business going for at least 6 to 12 months without dipping into your profits.
Update your business plan
Lastly, when creating your business plan, remember that it is a living document. As you begin to operate your business, it will grow and evolve. Allow your intuition to guide you through this process. Pay attention to the parts of your business that you love and where your customers are getting the most significant benefits. You may need to update your business plan to reflect any desired changes in your business goals.
Need a resource to guide you through how to write a business plan? Grab our free business plan template below.
As you go through the exercise, give yourself time to think through your “why” and the impact you would like to have in people’s lives.
Final thoughts on how to write a business plan
As you work through your business idea, don’t forget to have some fun and enjoy the journey. You are absolutely amazing, and we look forward to the magic you’ll create in the world (popping virtual champagne). Cheers!
Have questions or additional tips for creative entrepreneurs creating a business plan? Please drop us a note in the comments section.