How To Start Your Business Plan – Your business plan is the foundation of your business. Learn how to write a business plan quickly and efficiently with a business plan template.
A good business plan guides you through each stage of starting and managing your business. You will use your business plan as a roadmap for how to form, operate, and grow your new business. It is a way to think through the essential elements of your business.
How To Start Your Business Plan
Business plans can help you get funding or bring in new business partners. Investors want to be confident that they will see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you – or investing in your company – is a smart choice.
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There is no right or wrong way to write a business plan. What’s important is that your plan meets your needs.
Traditional business plans are more common, use a single format, and encourage you to go into detail in each section. They tend to require more work up front and can be dozens of pages long.
Lean startup business plans are less common but still use a standard structure. They focus on summarizing only the most important aspects of the key elements of your plan. They can take as little as an hour to do and are usually one page.
This type of plan is more detailed, takes more time to write, and is more comprehensive. Lenders and investors often ask for this idea.
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This type of plan is high-level focused, quick to write, and contains only key elements. Some lenders and investors may ask for more information.
You may prefer a traditional business plan format if you have a very detailed guide, want a comprehensive plan, or plan to request financing from traditional sources.
When you write your business plan, you don’t have to stick to an exact business plan. Instead, use the sections that make the most sense for your business and your needs. Traditional business plans use some combination of these nine components.
Briefly tell your reader what your company is and why it will be successful. Include a description of your mission, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to apply for funding.
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Use your company description to provide detailed information about your company. Go into details about the problems your business solves. Be specific, and list the customers, organization, or businesses that your company plans to serve.
Define the competitive advantages that will make your business successful. Are there experts on your team? Have you found the perfect location for your store? Your company profile is a place to brag about your strengths.
You will need a good understanding of your company’s vision and target market. Competitive research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. What do successful candidates do? Why does it work? Can you do better? Now is the time to answer these questions.
Describe the legal framework of your business. State whether you own or intend to incorporate your business as a C or S corporation, form a general or limited partnership, or if you are a sole proprietor or LLC.
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Use a chart to organize who is in charge of what in your company. Demonstrate how each individual’s unique experience will contribute to the success of your business. Consider including resumes and CVs of key members of your team.
Describe what you sell or what service you offer. Explain how you benefit your customers and what the product lifecycle is like. Share your ideas for intellectual property, such as copyright or patent infringements. If you are doing research and development for your service or product, explain in detail.
There is no one way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs.
Your goal in this section is to describe how to attract and retain customers. You will also describe how a sale will actually happen. You will refer to this section later when you make financial projections, so be sure to describe your sales pitch and marketing strategies.
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If you are applying for funding, this is where you will outline your funding requirements. Your goal is to clearly define how much money you will need in the next five years and what you will spend it on.
Specify whether you want debt or equity, the terms you want to use, and the length of time your request will cover. Give detailed information on how to use your funds. Specify if you need money to buy equipment or materials, pay salaries, or cover specific bills until income increases. Always include a description of your future strategic financial plans, such as paying off debt or selling your business.
Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.
If your business is already established, include income statements, balance sheets, and cash flow statements for the past three to five years. If you have other collateral that you can put on a loan, be sure to list it now.
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Provide a prospective financial outlook for the next five years. Includes forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly – or even monthly – forecasts. Make sure you clearly define your forecasts, and match them to your funding requirements.
This is a great place to use pictures and charts to tell the financial story of your business.
Use your attachment to provide supporting documents or other materials that are specifically requested. Common things to include are credit histories, resumes, product images, letters of reference, licenses, permits, or patents, legal documents, permits, and other agreements. .
Before writing your business plan, read sample business plans written by non-profit business owners. Rebecca owns a consulting company, and Andrew owns an entertainment company.
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You may prefer the lean startup format if you want to explain or start your business quickly, your business is simple, or you plan to constantly change and adjust your business plan.
Lean startup formats are charts that use a few simple elements to describe your company’s value proposition, infrastructure, customers, and finances. They are useful for viewing transactions and basic facts about your company.
There are many versions of lean startup templates, but one of the oldest and most popular is the Business Model Canvas, created by Alex Osterwalder. You can search the web to find free templates of the Business Model Canvas, or other versions, to write your business plan.
Consider other businesses or services that you will work with to run your business. Think about suppliers, developers, contractors and similar strategic partners.
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List ways your business will have a competitive advantage. Showcase things like selling directly to consumers, or using technology to tap into the sharing economy.
List any resources you will use to create value for your customer. The most important assets may include personnel, capital, or intellectual property. Don’t forget to take advantage of the business resources available for women, veterans, Native American, and HUBZone businesses.
Describe how customers will interact with your business. Is it automated or personal? In person or online? Think through the customer experience from start to finish.
Be specific when naming your target market. Your business won’t be for everyone, so it’s important to understand who your business will serve.
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List the most important ways you will talk to your customers. Most businesses use a combination of channels and optimize them over time.
Will your company focus on reducing cost or increasing value? Define your strategy, then list the most important costs you will face in pursuing it.
Explain how your company will actually make money. Some examples are direct marketing, membership fees, and advertising space sales. If your company has multiple revenue streams, list them all.
Before writing your business plan, read this sample business plan written by legendary business owner, Andrew, who owns an entertainment company. It looks like you are using Internet Explorer 11 or higher. This website works best with modern browsers such as the latest versions of Chrome, Firefox, Safari, and Edge. If you continue with this browser, you may see unexpected results.
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A business plan is an important aspect for business success. A living document generally projects 3-5 years ahead and outlines the path the company intends to take to grow revenues.
These are the elements of a business plan, which are linked to more detailed descriptions, provided by the US Small Business Association.
Your executive summary is a snapshot of your overall business plan and outlines your company’s profile and goals. Read these tips about what to have.
Your company description provides information on what you do, what differentiates your business from others, and the products your business offers.
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What are you selling? How do you benefit your customers? What is the product life? Get tips on how to tell the story about your product or service.
How do you plan to sell your business? What is your marketing strategy? Read more about how to incorporate this information into your plan.
If you are looking for funding
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