Small businesses, defined as those with less than 100 full-time employees and less than $5 million in annual sales or gross receipts, account for about half of the private sector employment and turnover in the United States.
While there’s no single way to start a small business, it makes sense to make a plan before you begin. If your company is already up and running, use these tips as a starting point for writing your business plan. Here are some things to think about:
Ask yourself why you want to start this kind of venture. Do you enjoy working with people? Do you like exploring new ideas? Are you looking for independence and flexibility? Consider whether your company will be buying or selling goods or services (or both) and whether your approach will grow revenue or cut costs. Once you’ve made these decisions, you’ll be able to move on to the more detailed planning stages of your business plan.
Where do I start?
Business plans are most valuable when they’re written for a specific audience and purpose. For example, an entrepreneur starting a new company needs a different plan than someone applying for financing or looking for investors. And if you need funding, consider that some entrepreneurs have found their plans were more persuasive after being edited by professionals who had experience writing them for other businesses. If possible, find out what kind of plan is expected before you begin so no delays later on.
If funds are available, hire an expert business writer to help you. Or find a business person to act as an adviser; this person could be your attorney, accountant, or banker, but it could also be someone with experience in the field in which you’re hoping to become involved. Getting a second opinion may help you avoid costly mistakes or misinterpretations of the market so refer to RemopteDBA.com.
The business plan checklist
These 10 points are all elements that should be included in most business plans:
- Company overview, history, and description
- Target market and marketing strategy
- Management team and organizational structure
- Business environment analysis (including industry factors)
- Competitive analysis (see how your company stacks up against the competition)
- Projections (cash flow, sales goals, employees needed) and financial data (balance sheet, profit & loss statement)
- Start-up expenses and assumptions about timing for start-up tasks to be completed before the launch date (e.g., build a website, sign contract for office space, hire critical employees)
- Appendix (a collection of useful or exciting background materials that support your plan’s conclusions) (related to creating a successful business plan).
- Financial statements (balance sheet, profit & loss statement, cash flow statement).
- Legal issues and risk factors (e.g., intellectual property protection).
Before you start to write the lengthy narrative portion of the plan, spend some time developing this list so it will be easy to refer back to at any point during the planning process. Most business plans are written between 25-40 pages long; if yours is substantially longer than this, consider whether it can be simplified or broken into smaller components to make it more manageable.
Determine which components are most important to include, and consider how you will present the information. Having the numbers in black and white is vital for making a plan more convincing to lenders or investors.
Business Plan Checklist – A Business Plan Overview
A business plan should clearly describe your company’s purpose in the market, its unique selling proposition (USP), your products and services, anticipated revenue, expenses, staffing requirements, and equipment needed to run operations. The plan should also contain assumptions about various factors affecting your business model, such as expected economic conditions in your industry or geographical location. Once completed, the business plan should cover all major areas required for effective planning so your business can become profitable sooner rather than later.
The business plan is a roadmap detailing what you intend to do and how your company will succeed. The process of writing a business plan can produce several benefits:
- It identifies potential problems. It’s easier to fix a minor problem early in the formation process than after launch, when it may be more difficult or expensive to make changes.
- It provides focus, direction, and motivation for your entire team by translating lofty goals into practical objectives that can be achieved, followed by specific actions steps required for this achievement.
- It makes you think critically about your target audience, competitors, pricing strategy, and other vital components of your business model. Hence, you better understand the market in which you compete for customers and skilled employees.
- It helps avoid costly mistakes. A well-thought plan will surface potential problems and suggest ways to resolve them before they become a real issue.
Whether you need a business plan for your small business or a personal plan to achieve other goals, the time invested in planning can bring many benefits.
The process of writing a business Planning is all about being prepared by thinking ahead about what could happen, especially if things don’t go as expected. Every detail you include should be tied back to something that could impact the success of the company. A good plan has both concise information and insightful analysis so someone reading it can understand your thought process and supporting facts and figures necessary for completing tasks related to running the company.
What is the summary of the business plan?
The summary of your business plan provides an overview of what your company does, who it serves, and how it makes money. The summary should be less than 500 words in length but provide enough information to communicate these basics about your small business. It’s also a good place to describe all products or services you offer, along with pricing for each one. You can include competitive advantages in this section if they help make your success case — such as “low overhead costs” or “years of industry expertise.” Your executive summary should include three key sections: 1) An Introduction to the Company; 2) A description of what you do; 3) A description of why others should care.
What is the Company Overview?
The company overview discusses your company’s mission, vision, and approach to the market. It should be between three and six pages in length and focus on describing why you do what you do as a business and the history of the organization. Important considerations are how you make money, why others will buy from you — as opposed to competitors — and what differentiates your approach to this particular industry or product/service category. You can include anything that shows you have a comprehensive understanding of the marketplace and your place within it.