Congratulations on venturing out to start your own business. Now it's important you keep the momentum going by drafting a business plan. Creating a business plan is one of the first things you do to set a path for your business. Quite honestly, most new business owners aren't motivated to create one, or don't know how to write a business plan.
The average first timer have a specific goal in mind; create a useful service to make money. There's nothing wrong with that, but for all intents and purposes, to accomplish your business service or financial goal, you need a solid plan. For beginner's sake, let's get started by outlining how to create a business plan. For those who want to dig deeper, I give more details in my other post on business plan etiquette to wow investors.
How to Create a Great Business Plan
Basic format of the business plan includes - Step by step sections with your business marketing strategy being the most significant aspect. If you're looking for basic business plan templates to get started, there are several good ones available for free download online. A quick search will yield relevant results, but we'll take you through the steps to create your own starting with the six sections.
1. Mission and vision
2. Business description
3. Marketing strategies
4. Analyze your Competition
5. Who will manage the business
6. Plans for seed money or capital investment
Mission and Vision - Give a precise description of the entire business and all activities since its inception. This section must be compelling enough to capture the readers attention within the first minute of reading it, otherwise chances are they won't bother reading the rest.
Business Description - Describe your target industry and related markets. You should describe the level of need and demand for your particular business in those markets, and any advantages or disadvantages to your business in those markets. Make sure to provide only factual information and realistic expectations of what your business might accomplish in all target markets of a particular industry.
Marketing Strategies - Define specifics of your market and demonstrate how you will promote your business product or service within that market. List specific methods you will use such as direct mail, search engine marketing, list building, and other effective marketing strategies.
Analyze your Competition - Identify the main competitors in your niche. Breakdown their major strengths and weaknesses, and business advantages or disadvantages.
Who will manage business operations - Describe who will manage different aspects of the business and how authority they will hold. Management breakdown is critical if outside investors are a consideration for the business.
Plans for seed money or capital investment - Show how the business as a whole will be funded or financed. Examples include bootstrapping (out of pocket funding), angel investment, financial firm startup capital (small business loan), or any other means of business funding.
Reasons Many New Business Owners Refuse a Business Plan
Many new business owners choose not to draft a business plan because they don't intend to attract outside investment capital. Some are also confident they have their business strategy mapped out mentally, but a business plan is not just to impress investors. It's useful as a roadmap for your startup business. It doesn't have to be perfect, it simply functions as a flexible blueprint for your startup. It illustrates your goals and strategies for getting from point A to point B to market and grow your startup. Your business plan is not written in stone, you can amend and revise it as many times as you want.
Specific Reasons for updating or revising it generally include:
- A necessary change in marketing tactics
- You might acquire new investors who suggest changes.
- Your business service might have evolved over time.
- Your target demographic might increase, decrease, or change completely.
- You have a change of heart about your business goals.
The first step towards any business is a perfect business plan that you can follow and move on step by step. And marketing is the most important thing in this plan as it is important to promote your business.
There's no pressure to create a business plan, but it's a good rule to have one. Even a descriptive paragraph about your business on a napkin could serve as a plan, that's how mega-social networking giant Twitter started. There's no perfect business plan, only an amendable one that states the facts and intentions of your business.
A solid business plan is a lot to brag about. You'll attract the best employees and top notch investors. Here's how to create that killer business plan every small business owner craves.