So, you want to start a business. Amazing! Starting a business can prove to be a wildly enriching experience.
But how do you ensure that you're set up for success?
Or that you'll be able to receive funding?
Or that your strategy is spelled out, that you're ready to take the plunge into the deep end of small business ownership?
Enter: the business plan.
Your business plan opens many doors for a person looking to start a business. It gives potential investors a good look into your plans and how they can expect to recoup their investment. Even if you've been in business for years, having a detailed plan can help your team stay true to the goals and strategies laid out in your business plan allowing you to track your progress and reach your goals easier.
If you’re at square one, looking to build a business plan, it can be a lot of information to digest. Use this short list to help you on your way to building a successful business plan.
1. Determine the type of business plan you need.
Although business plans can take many different shapes and formats, there are—broadly speaking—two kinds that suit most organizations:
A traditional business plan is typically detailed and lengthy. It offers a near complete look at your strategy, which will be beneficial when looking for potential investors. This is a good option when you’re seeking funding or need to communicate the vision and plans for your business in depth.
A lean startup business plan is much more concise, usually a single page. This document focuses on only the key elements. (You’ll want to have additional details and documentation upon request, just FYI.) A lean business plan is great for getting across the general pitch behind your business if you have limited time or resources.
2. Build an executive summary.
Provide your mission statement and any other pertinent information like current company size, location, etc.
3. Describe your products and/or services.
Go into detail about pricing, lifespan, customer benefits, production, research and anything else a potential investor may want to know.
4. Describe your market.
Lay the scene of today’s market backed by data. Ensure you are accurately describing your potential consumer base, market projections, and potential roadblocks.
Outline your strategy for capturing a portion of the market. Show consumer interest and anticipated campaigns/programs to increase sales.
5. Deep-dive into your financials.
If you are starting a new business, provide financial targets and estimates for the first five years. Include any funding requests and detailed breakdowns of where that money would be spent.
Established businesses should include financial statements, balance sheets, and any other major financial information.
Make sure to consider potential investors’ needs. Including a section on ownership percentages and a cash out timeline could prove beneficial.
The Harvard Business Journal suggests building your business plan and presentation with three major viewpoints in mind.
Yours, the entrepreneur, the business owner, the rockstar! What do you need? What is your ask?
- The market, including both existing and prospective clients, customers, and users of the planned product or service. What does the market need? What are potential consumers looking for solutions for?
- The investors, whether financial or providing other resources. What type of return will make your investors happy? Make sure to outline how you can make that happen.
Whether you are starting a new business, or changing your approach, having a detailed and comprehensive plan is the first step towards success. It can seem like a lot of work, and it is, but it also has the chance to be wildly rewarding and fulfilling. At the end of the day, it is worth your time to develop a strong business plan.
For more resources on starting or managing your small business check out the Ruby blog—the perfect destination for someone looking to level up their business.
