A business plan isn’t just a formality. When done right, a business plan is a master document that outlines the future of your business and acts like a roadmap to help you get there. When you’re about to launch a business, it can often feel like there are a million rapidly moving parts. Having a business plan is like having a compass to guide you on your way.
Do I Need a Business Plan?
Just about any business owner should draft some kind of plan. It can be useful both if you’re an entrepreneur aiming to launch a business, as well as an established company seeking new sources of funding. A business plan can also come in handy if you’re an existing business running into a significant shift, moving to a new location, under new leadership or ownership. It could be that you’re facing changes in technology, policies, or consumer tastes. It will give you confidence that you’ve researched your market and have a thorough understanding of the strategies required to succeed.
Our partners at .BIZ domains help us break it down. Basically, a business plan is a roadmap that communicates your business goals. It contains the strategies you’ll use to achieve those goals and potential challenges you might run into along the way and ways to overcome those obstacles. It also examines how your business is structured and organized (every employee’s titles and responsibilities) and the amount of money you need to keep your business operating until it turns a profit.
A Business Plan Will Help You Become a Better Leader
- A business plan will force you to look inward. As you work through the components outlined below, you’ll have to address your business concept and structure, identify the industry you work in, outline your value proposition as a product or service, and describe what will make your business a hit.
- A business plan will force you to look outward. First and foremost, you’ll have to describe and analyze your target customers: Who are they? What demographic is most likely to want your product or service? What encourages them to make purchases? You’ll also have to know your competition just as much—and what makes your product or service better.
- A business plan will force you to face the financial realities of starting and running a company. You’ll need to look at your income and cash flow statement, balance sheet, and other financial information to understand where you stand and what you can afford. This part may require professional assistance from your accountant.
Your Business Plan Needs to Have Seven Key Components
Most business plans contain the elements below and follow a general format that includes a cover, title page, and table of contents.
- Executive summary: Distills your entire business plan in a succinct, single page
- Business description: Your business model, vision, and mission statement
- Market analysis: Thorough market research to understand the size and depth of your market, and where your company fits within it
- Competitive analysis: An examination of competitors’ strengths and weaknesses
- Marketing plan: Explanation of the steps to spread the word about your business—this section can include pricing strategies
- Operating plan: The steps you will take to turn your idea into a concrete product/service and how you will reach your customers
- Financial factors: If you’re a new venture, this section will need to include your financial projections, if you’re an existing business, include your financial past, present, and future finances—this is where you’ll include an income statement, balance sheet, and cash-flow statement
The Secret to an Impressive Business Plan
Small details can go a long way in creating an impressive and useful business plan. First, know your audience. Are you writing this for an investor, potential partner, or perhaps a consultant? Craft or tweak your message to suit the reader. If you’re writing for an external audience, your plan may require more research versus if you’re writing for yourself and your team. Just as you might need an accountant to help with the financials section, you might need to also invest in data and independent research to understand your market. Last but not least, make sure the voice and style is strictly professional. If you’re not a good writer, turn to a trusted person in your company to help keep the tone consistent, or consider hiring a professional writer or editor.
A Business Plan Will Guide You to Success
While a business plan seems like lengthy homework (typically 15-20 pages), it’s not a college paper where you drone on just to fulfill the format and word count. Keep every section succinct, clear, and to the point. After all, the future of your business depends on it. Ready to get started? Step into the future of business today, secure a domain name with .BIZ and get to work on your plan.