It's the cornerstone of your business — and you'll likely need one when you seek financing.
If you’ve never written a business plan before, you might be a little intimidated by the process. Traditional business plans can be up to 30 to 40 pages in length, extremely detailed, and are written three to five years out into the future. How can you fully predict what the future looks like for your business when you’re just getting started?
The truth is no entrepreneur has the preternatural ability to accurately calculate how their business will fare. It’s a much better approach to view your business plan as a blueprint instead. Once you have a better idea of the foundation your business is built on, it’ll make it much easier to make subtle changes and revisions since the existing foundation is already solid.
Ready to draft a business plan? Make sure to follow these seven steps that allow you, and everyone else viewing the document, to have the best possible understanding of your business.
1. Write your executive summary
Who are you? Why should we care about your company? Your executive summary will sum up everything a newcomer needs to know about who you, and your business, are, what you do, the industry you’re in, where you’re located, why consumers should be interested in your offerings, and how you will make money. You may also consider including a value proposition that clearly sums up the value that your company brings to its market.
2. Add a description, concept, and strategy
Now that we have a better understanding of your business, focus on its details. Use this section to describe how your offerings work, what helps them to stand out within their market, and where your idea came from for the startup. If you’re still ironing out the kinks, make note of where you’re at currently in your development stage. Then, share your goals for the future of the business and strategy for how you will reach them.
3. Include an industry analysis
Who is your competition? You probably already know what they’re offering and have studied their marketing approach carefully. This area is devoted to the extensive research you’ve conducted on competitive businesses in your industry.
4. Provide a market analysis
Who is your audience? Define what your target demographic looks like and how your business will attract, capture, and retain its audience. One approach that can help out? Utilize census data to create consumer personas.
5. Define your organization and management
You’ve defined your business, your competition, and your audience. Now it’s time to talk about your team! If you’re running a startup alongside any other individuals, make sure to include their biographies and information about their responsibilities.
6. Include financial projections
Time to talk money — which can sometimes be the most intimidating part of your business plan. Within your financial projections should be tables and charts that outline your cash flow and profits and losses. Fresh startups should also include their 12-month income statement, sales forecast, expenses budget, and break-even analysis.
7. Add your financing request
If you’re seeking funding from an investor or lender, be direct about the amount that you will require in order to successfully run your business. “Ask and you shall receive” doesn’t necessarily apply here, though. Your request must include information about how you plan on spending the money and the manner in which it will be spent.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @mycorporation.
Posted: April 2, 2018