Business plans aren't always necessary, but writing one can help you turn an undeveloped idea into a successful business.
A business plan acts as a road map for starting and growing your business. Writing your plans down will help you uncover the potential hazards and opportunities in your market.
Once you know what to expect, you can decide if moving forward is worth your time. A good business plan can even help you keep moving in the right direction after your business is up and running.
It's important to recognize no two business plans are exactly alike. Templates can get you started, but don't just fill in the blanks and call it a business plan. Your business plan should reflect your dreams and goals. Taking the time to express them will create a plan you’ll be excited to follow.
While every business plan is different, there's certain information that you should always include.
Executive summary. Provide a brief overview of your plan as a whole. This will be the first part of your plan (although it's generally written last).
Company description. Provide details about your company and its operations. Include items like location, size, products and/or services, and goals.
Products or services. Add more detail about your products and services, along with the value they provide to customers.
Market analysis. Provide an overview of your chosen industry and where your business will fit in it. Include the major players, trends, and the size of the market. Support your claims with relevant statistics.
Competitor evaluation. Identify your direct and indirect competitors. Assess their competitive advantages and how you can best position yourself to compete. Include both online and off-line competition, as these may be different.
Customer evaluation. Outline who your product or service is for. Create a profile of your ideal customer:
Marketing plan/s. Build on your market analysis, adding details about your sales strategy and promotion activities, pricing, and your product's benefits.
Operations. Outline the daily needs of your business:
Financial plan. Include short-term and long-term financial planning:
Make your estimates as accurate as possible, but remember it’s better to overestimate expenses and underestimate revenues than the other way around.
Management plan. Detail your business’ legal structure, your internal management team, and any external resources you’ll need.
Appendices and exhibits. If you have graphs, statistics, or other relevant data supporting the other sections, include them here.
Entrepreneurs with business plans have several advantages over those who jump in without a plan.
A solid grasp of the market and potential entry challenges. Writing a plan forces you to think about these things.
A nearly complete marketing plan. In writing your plan, you’ve had to flesh out your product and the problem it solves. You know your customers and how to appeal to them. You know how to position yourself as unique within your market.
Time to change course if needed. If you discover major problems with your initial idea, it’s easier to rework it before you’ve invested money and resources in it.
A better shot at financing. Banks and investors want to see evidence your business is likely to succeed. A solid business plan can help.
In other words, a business plan is both an internal roadmap and your first marketing piece for selling your idea to financiers or backers.
All this planning can feel overwhelming for new entrepreneurs, but help is available:
Visit business or entrepreneurship centers. Many schools have these, offering support services to new small businesses.
Find a mentor. Potential mentors include faculty members, career counselors and alumni. Your school’s entrepreneurship center may also offer mentoring. People with experience in your chosen industry can be especially helpful.
Take business classes. You don't have to be a business major to take business classes in business fundamentals, marketing, and finance.
Writing a business plan may be hard work, but making the effort will increase your chances of success.