If you fail to plan, you are planning to fail. Those words are as true now as they were when Benjamin Franklin penned them more than 200 years ago, and they are especially true in the world of entrepreneurship.
Your business plan is your plan for success. No matter how great your business idea may be, it won’t amount to anything without an actionable plan to take it to market. Sitting down to spell out a business plan forces you to calculate and confront numbers, markets, competitors, and steps for creating and growing your venture. It helps to organize your thinking and produces a document you can share with lenders, investors, and stakeholders.
Are you ready to spell out your new business’s strategic plan? This guide on how to create a business plan will get you started on the path to success. Make sure your business plan includes the following:
This appears first in your business plan, but you should write it last. The executive summary is a 1 to 2 page section that summarizes the points you make elsewhere in your plan. It should introduce the reader to your business idea and sell them on your product and methods without getting bogged down by the details. Potential investors and partners will either keep reading or throw your plan out at this point, so make sure it is clear and solid. The executive summary should state the problem your business solves and how, the target customers, financial forecast highlights, and an introduction to the founders.
Every business should offer a unique solution to a real problem. In your business plan, describe in detail a problem facing customers and how you plan to solve it. Instead of just describing your product or services, explain the market needs and demonstrate how your business fills that need.
Include some sort of proof of concept that demonstrates how your idea can succeed as a business. This might involve results from market research, a successful crowdfunding campaign, or any early feedback or sales from first customers. Investors want to see that there is a market for and interest in what you are selling.
Who is going to buy your product or service, and who is your competition? Discuss your potential customers and their demographics and needs, where they live, and how best to reach them when it comes to marketing and delivering your product. You’ll also need to outline potential competition—no matter what industry you are in, there will always be competition, and you need to know who yours is and why what you are doing offers customers a better alternative. What sets your brand apart, and is there room for your business in this market?
How will you execute your business? You need to outline all of your strategic plans for logistics and operations in running your business. It is your roadmap for how to get your business up and running, and how to move forward from that point. Include information about:
- Developing and introducing new products
- Expanding the market for current products
- Plans for expanding sales to new areas
- Plans for boosting sales
- Plans for acquiring new customers and retaining current customers
- Product pricing, supply chain costs, and profit margins
- Marketing strategy
- Manufacturing information and product delivery plans
- Key metrics used for evaluating success
This section should also include details on your business location, even if it is solely online, and any facilities or specialized equipment you need.
Who are the people behind your company, and what is your origin story? How many employees do you have, and what is the legal state of your business? Answer all these questions and detail the background and qualifications of each member of the founding management team.
Outline the numbers in this section, including:
- Profit and loss projections
- Cash flow tables
- Balance sheet
- Sales forecast
- Employee wages
- Budget and overhead costs
Keep your profit projections realistic. If you are planning to raise money to fund your business, include how much money you need and how that funding will be used.
Start with this outline, and you are well on your way to learning how to create a successful business plan. Find out more about how to create a business plan and other entrepreneurship skills by registering for a Daymond John’s Success Formula event.