Guest Post written by Jake Moreno
In this day and age, starting a business is easier than ever before. Of course, keeping that business up and running is another story, with studies showing that around 70% of small businesses fail within a few short years, but that should not stop you from trying (after all, that means that around 30% of businesses succeed!).
What causes most small businesses to fail is a lack of planning and preparation. Because it is so easy to start a business, people tend to get a little carried away and do things a little too quickly. If you are wanting to start a business, it is important that you remember to take things slowly, do your research, and focus on the fundamentals.
One of the fundamentals that are often ignored is to sit down and write out a Business Plan. There are a lot of benefits that come from writing a business plan and referencing it frequently. Without a clearly written out business plan, you will not have a clear direction, investors will not be very attracted to your company, and you will have a difficult time keeping it afloat when things get tough. So, for the aspiring small business owner, here is a brief guide to writing a killer business plan.
Step 1: Do Your Research
When it comes to business, knowledge really is power. You will need to know your company, your product(s) or service(s), your competition, and the market. In other words, you need to know how you are going to attract people away from your competitors and to your company. And the only way you can do that is if you know what you are doing.
Step 2: Determine Your Audience
Who are you writing your business plan for? That is a question you will have to answer for yourself, but usually, the answer is similar: for yourself, your employees, and potential investors. You and your employees will use the plan as a direction for the things you do and the initiatives you take. Your investors will be using it to determine whether or not your new company is a sound investment. In order to make a good business plan, you will have to keep all three of those people in mind as you write.
Step 3: Cover the Important Stuff
Here’s a list of the sections your business plan should include:
- Executive summary. As the name implies, this is a summary of your business and your plans to make it successful.
- Opportunity/market analysis. What need(s) are you filling? What problem(s) are you solving? Who is your target market? Who are your competitors? These are the questions you want to answer in this section.
- Action plan. This section clearly defines how you are going to take advantage of the opportunity you see. Be sure to include your marketing and sales plans, goals and key performance indicators, your day-to-day operations, and how you will measure your success.
- Product(s) and/or service(s). Here’s where you’ll list out everything your company does or sells.
- Management. Every investor knows good ideas are nothing without good people behind them. In this section, you’ll want to describe the structure of your company’s management, who will be filling those positions, and which positions you plan to have in the future.
- Financial plan. Here’s where you’ll give a plan for how much money you expect to make and how you’ll spend that money to help your business grow. It will also include how much money you are requesting from the investors over the course of the next 3 to 5 years.
Step 4: Be Adaptable
One of the most important aspects of a business plan is that they are adaptable. It’s important to remember that once you write your business plan, it isn’t finished. Don’t get discouraged if you approach an investor, business plan in hand, and are rejected. Take advantage of that opportunity to refine your business plan and adapt it to be more appealing to investors in the future.
If you start your business and realize that your business plan wasn’t accurate or useful in some senses, change it so it fits. Get feedback from your employees and adapt it to fit their needs, your needs, and what is reasonable. Don’t give up if your business plan doesn’t work the first time!
Let’s Chat > Do you have a killer business plan in place?