After finding your one million dollar idea, one of the most powerful ways to finally start a business that will lead you to actualize your dreams, reach your potentials and find fulfillment is to start by learning how to write a business plan that works.
A well written business plan does not merely help you to find your path to success; it provides the needed roadmap to follow thus making your journey smoother, more predictable and easier to navigate.
Considering that majority of entrepreneurs with big ideas are still struggling with ideas on how to evolve a workable plan for their businesses, in this guide, I’ll walk you through the steps you need to create a realistic business plan that will deliver the much needed success for your small business.
Why Do You Need a Business Plan?
Before we proceed, let’s clarify the role of a small business plan. Specifically, a business plan is not merely a document for investors, loans or fund raising. It’s a tool meant to guide your business success. Here’s how:
- Offers Clarity: A business plan gets you to clarify what matters most to your business. for example, it clearly outlines your business idea as well as goals, and strategies.
- Optimizes Focus: By defining your mission, vision and values, your business plan helps keep you on track.
- Improves Funding Chances: Be it for lenders or investors, your plan is an important document that must be provided before you can access funding. Getting it right improves your chances.
- Enhances Prompt Decision-Making: As a working business document, it provides a solid reference point for making crucial decisions.
Now that you know why you need a small business plan, in the following paragraphs, we’ll discuss the steps you can take to write a business plan for a small business.
Executive Summary
Table of Contents
Before you get to write a business plan, one of the first things you want to pay attention to is your executive summary.
Although you might write it as soon as you get started or after you’re done, it usually forms the first part of a business plan.
That said, executive summary is a concise summary or overview of your business. One of the key things to include as part of executive summary when you write a business plan for a small business is the name of the business, its mission, vision statement and a summary description of the products or services.
As you write your executive summary, keep in mind that this is like a summarized version of the business plan itself. It is a key aspect of the entire document and the way you put it together can determine whether a potential investor will read past that section or not.
So as much as possible, keep it simple, straight to the point and captivating.
Business Description
Your business description is a summary of what your business does its main purpose and direction as well as the unique value proposition that differentiates it from other businesses. It comes immediately after the executive summary.
In this section, you want to give more details about your business. Start with outlining your company’s history, how or why it was formed, the company structure as well as its objectives, values, mission etc.
To create a strong impression when you write a business plan for a small business, include in your business description, aspects of the business that makes it stand out and different from the competition or other businesses in the industry.
Furthermore, to make your business description stand out, you can also outline what drives you, the passion behind the idea and the very things you plan to achieve or change as a business.
PS: This is where you can get to inspire your reader (investor or lender as the case may be) and find ways to get a buy in.
Market Research
You can’t create a business plan without conducting a market research. Specifically, you want to identify your key target audience, their location, their tastes and preferences in relation to your product or services as well as their strength and weaknesses.
You can also use surveys, questionnaires, polls etc. on either online or offline platforms (or both) to further conduct a realistic market research.
This will aid you in positioning your business to be able to create a solution that’s not just appealing but custom made for this specific audience.
Remember, you can’t successfully write a business plan for a small business without analyzing your competitors. Your analysis of their pricing, service delivery and other aspects of market realities are core part of what should boost the need for the new solution you’re offering.
PS: Whether you’re creating a business plan to seek funding or for your personal business use, conducting a thorough market research is very crucial. Your success here can make or mar the overall success of your business.
Products and Services
What’s your offer? What are the product or services you’ll be offering clients as a business? This forms the next part of your plan.
In this section, outline the product or services you’re offering and then go ahead and describe in details, their features and benefits.
As part of your key strategy to further justify the need for the business when you write a business plan for a business, identify the major variables that set your products or services apart from other brands in your industry.
Also, pay attention to outline this part in a way that will justify the need for your business. And of course, why an average user will be interested in it.
Sales & Marketing Strategies
Every business exists to attract customers. In this section, identify the key strategies you will use in getting visibility, reaching new leads and actually converting them to paying customers.
Specifically, outline clearly how you plan to market your product or services, the preferred marketing channels as well as your pricing strategy.
Additionally, one of the important steps to write a business plan for a small business is to include a realistic marketing strategy that will evolve based on market realities.
So, you want to keep your sales strategy flexible and easily adaptable to prevailing market realities, customer tastes and preferences as well as market trends and economic leanings.
For example to get this part written, you can say something like “Using Y strategies, we plan to get an X number of clients over a Z period of time“.
The key is to make this part research backed (after conducting a market research) and very realistic otherwise it may come off as unrealistic.
Business Organization & Management
This section introduces the people behind your business, their role, and qualification and possibly, why they can be trusted to run the business successfully.
To write a business plan that will certainly fly, outline the structure of your business, key roles and responsibilities, indicating clearly how these responsibilities are divided and how each section will lead the team to achieve the overall goal of the business.
Some roles are not always necessary at the initial stages. Be sure you’re able to identify the key roles that are crucial for your business at every growth milestone you’re setting for it.
This is crucial as you might have need to justify it, especially where you’re looking at getting external funding. Preferably, keep this as lean as possible if you’re starting on a shoestring budget.
Financial Projections
Financial projections are part of what will cover your expenses, income and possibly profits. This section also forms part of your forecast as regarding your financial performance.
One of the ways to realistically write a business plan for a small business is to map out clear financial forecast for all your activities over a certain period of time.
Create income statements based on your market research, target market and pricing strategy. Evolve your revenue projection and break even analysis and find ways to include your projected income over a certain period.
PS: A realistic financial projection is a great way to demonstrate a business’ sustainability. Getting this right could be a very decisive factor as regards whether or not an investor or lender will be impressed enough to support your business.
Funding Requirement
Although all business plans are not meant for fund raising, most business plans are actually written for the purpose of raising funds.
Whether or not your business plan is entirely written for funding, you have to outline the funding requirement for your business.
Include the steps you plan to raise funds (This might not necessarily be source from investors. It can also be personal funds) for the business, ways you intend to utilize the funds raised and how you plan to recover the funding.
As part of the funding requirement, outside your repayment plan, outline the potential returns on investment for your investors whether it be equity or financial gains, be categorical.
Where you’re looking at getting funds from personal sources, indicate how you’re going to recover your expenses. And the projected duration that should take.
The Appendix
While an appendix may not be entirely necessary, while writing a business plan for a small business, you can use this section to make an even stronger case for your plan.
Use this section to include any supporting information you might want to add to the plan. For example, a research data, team member’s resume, product catalogue etc.
You can also use this section to make a strong closing. This is very important.
Final Words
Like millions of other successful entrepreneurs, starting your own business could be an exciting journey that will finally lead you to actualize your dreams, reach your potentials and find fulfillment but, you need a robust plan as a foundation to achieve this.
Now, even after writing a business plan, you have to keep in mind that no plan is cut in stone. At interval, revisit your plan to re-strategize, map out areas that are not working any more as well as recalibrate the success of the strategic plan in delivering on your outcomes.
Additionally, as a small business, instead of working on creating an unrealistic plan for the sake of having one, make effort to put together an easy to use and flexible document that will guide your business as you build the success it deserves.
And of course while building on marketing strategies for your business plan, keep in mind we are at your service to create robust digital solutions that will deliver your business growth outcomes as well as build websites that will connect you with your target audience. Reach out to us here.
Now, it’s your turn! What’s your biggest challenge when it comes to writing a business plan for a small business? Drop your comments below.
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