If you are thinking about opening a business, planning is key to getting started on the right foot. A thorough and well-written business plan makes all the difference in organizing and marketing your business, seeking funding, and measuring your success.
That being said, developing a business plan can seem daunting at first, even if you have an MBA or background in business. The fact that there are so many templates for business plans can also exacerbate that overwhelming feeling. Fortunately, you can choose the format that is tailored best for you and your business. It just needs to have the following components.
1. Executive Summary
Every business should be able to be summarized in an elevator pitch so think of this as a high-level introduction to your business and your reasons for starting it. Your executive summary should include your mission statement of your business’s aims and values, the product or service you are selling, and your business’s name and location.
As we should individually do so in life, you should set short- and long-term goals for your business. A way to distinguish between the two is to set short-term goals for the next four to six months and long-term ones for the next one to three years.
Defining the target audience for your products or services is crucial to your success. Taking the time to determine if you are targeting the general market or a particular demographic based on age range, gender, or race, and whether it is local, regional or national will help guide the next two components of your business plan.
Now that you have determined your business and its audience, you need a full understanding of the sphere where it is operating. Look at ways your particular business can improve upon existing models in your market and fill market gaps. In addition, you should fully understand your competitors and how your product or service is different from what they offer.
With these previous areas defined, it is now time to determine how you will market and promote your product or service to your target audience. In developing your marketing and promotion strategy, determine the tactics best for reaching your audience. Social media can advertise your business with little to no cost, but newsletters, pay-per-click ads, email marketing, or search engine optimization are also cost-effective options.
6. Budget and Expenses
The final step of your plan should include a budget with operational expenses, monthly and daily expenses, marketing, and any debt related to the business. It should also include future financial projections, along with current financial performance.
These components will lead to a plan to help launch your business and bring it to life. Once you complete your business plan, I recommend having it carefully reviewed by a business partner, advisor, or accountant before moving forward with it.