How to Make a Business Plan
As a business owner or aspiring entrepreneur, you’ve probably heard this advice plenty of times before: “The first step to success with your business is making a business plan.”
This nugget of wisdom is thrown around a lot for a reason—it works. Having a small business plan does help your venture succeed by giving you a clear path of action.
The problem is that very few people know how to create a business plan effectively. Most write it just for the sake of putting one together.
Let’s change that, shall we? Today we’ll discuss how to write a business plan that leads to success.
Why You Need A Business Plan
Think of a business plan as a blueprint. It should be a detailed plan of how your business should run, what it should focus on, and, more importantly, how it will make money.
A business plan forces you to think of every aspect of your company before you even put it up. For starters, it tells you if your business idea is valid or not. It tells you if there are opportunities for your business to thrive, or if it will be a tough market.
You’ll also be able to look at how you’ll market your product or service, who your customers are, and how you’ll get financing.
The bottom line is that you can prepare for potential pitfalls that can kill your business. At best, you can decide to walk away from a business idea and avoid a costly mistake.
Business plans are also vital if you’re seeking financing, either with a bank or investors. It allows you to convince them of your business idea by showing them how it will make them money.
How To Start A Business Plan
Successfully writing a business plan means you’ve got to have the necessary elements in place. But before you dive in, there are some important steps you can take to set yourself up for success.
You should begin by doing lots of research. In fact, you should spend twice as much time researching as you do writing. Look at the current market offerings, and see if your product or service is filling a significant need. Spy on competitors. Discover the current trends in your industry.
Arm yourself with research data, and you’re 80% of the way to a successful business plan.
Another important factor to consider before you start is to determine the purpose of your business plan. Will it be used to attract investors or future employees? What you put in the plan will differ based on this.
Based on your research, you can now begin writing down aspects of your company. What’s your big idea? What products or services do you offer? Who’s your target market, and how do you plan to deliver your offering to them?
Once you have all these notes, it’s that much easier to put together the business plan.
How To Start A Business Plan: Step by Step
Creating a business plan sounds like an enormous task, but it’s not that complicated once you break it down to actionable steps.
Let’s start with what your company is. This is the “introduction” section of your business plan. It includes a quick overview of the nature of your business and what product or service it’s providing. This section can also include the critical distinction that makes your business unique or exciting.
Next, you’ll need to list down your company’s mission and vision. It states what your company stands for, and what your long and short term goals are. It’s useful for getting people on board with your idea.
Arguably one of the most important parts (at least to banks) of the business plan is the financial analysis of your business. It includes vital information like profit margins, sales projections, and how cash goes in and out of your company. This part is crucial to show how profitable your company is (or will be) to investors.
Lastly, your business plan should have a marketing section. It will detail how you plan to promote your product or service to customers. It tells you and investors how viable your business model is.
Tips and Tricks for the Best Plan
Finished writing your plan? Here’s how to make a business plan even better.
First, it’s okay to be optimistic, but try to keep things realistic as well. Your sales projections should be based on sound estimates and not because they’re what you want to see.
Next, try to keep your business plans as concise as possible. People hate reading long documents, so include all the main points, but keep it short. A document with 15-25 pages is plenty for a business plan.
Finally, proofread your business plan and check for any grammatical or spelling errors. You want the reader to focus on your business idea, and not on your writing mistakes.
Now that you have your business plan in place, it’s time to consider how you will finance your business. Schedule a one-on-one merchant funding consultation with L3 Funding and we’ll provide you with the best options for your business.