A business plan can make or break a small business. A strong, detailed plan provides a clear road map for the future, forces you to think through the validity of a business idea, and can give you much greater understanding of your business’s financials and the competition.
Before digging into the best way to craft a business plan to help you crush it, and spending hours or numerous dollars on commissioning one, do you even need one?
What’s a Business Plan For?
A business plan is a written description of your business’s future. That’s all there is to it–a document that describes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you’ve written a plan, or at least the germ of a plan.
You should have a plan in order to get yourself organized, to ensure you have some type of viable commercial potential, you have focus and hopefully aren’t going to run out of money or starve before you get going. If you are planning to go to a local bank for a business loan, or are approaching your sphere of influence for backing who you know is accustomed to seeing legit business plans, then you know you probably need to create something that they understand in a format they are comfortable with.
Three Step By Step Guide to Creating a Business Plan
1.) Executive Summary
This is the first page of your business plan. It should include a mission statement, which explains the focus of your business, as well as a brief description of the products or services offered, basic information such as ownership structure, and a summary of your plans.
2.) Objective Statement or Business Goal
Content goes here. An objective statement should clearly define your company’s goals and contain a business strategy that details how you plan to achieve them. It spells out exactly what you’d like to accomplish, both in the near term and over the long term. If you’re looking for outside funding, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
3.) Marketing and Sales Plan
This is simply an explanation of what you are marketing strategy is and how you will execute it. Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business. This section can also highlight the strengths of your business and focus on what sets your business apart from your competition.
The Mini Plan
A mini plan may consist of one to 8 pages and should include at least cursory attention to such key matters as business concept, financing needs, marketing plan and financial statements, especially cash flow, income projection and balance sheet. It’s a great way to quickly test a business concept or measure the interest of a potential partner or minor investor. It can also serve as a valuable prelude to a full-length plan later on. Be careful about misusing a mini plan. It’s not intended to substitute for a full-length plan. If you send a mini plan to an investor who’s looking for a comprehensive one, you’re only going to look foolish.