For aspiring business owners, launching a successful company is the ultimate dream. Starting a small operation and building it into something substantial is a challenge that tests the mettle of even the most experienced professionals. Everybody needs to start somewhere, and before your business can open its doors, you’ll need to have a business plan.
What Are Business Plans & Why Do They Matter?
Specifically, a business plan refers to a document that details just about every aspect of a small business before it even launches. This includes everything from its plan for growth to expectations for profits, returns, expenses, a high level overview, location of the business, what kind of space will be needed (if any), and much more.
Having a business plan is vital for a number of reasons. For starters, writing a business plan forces prospective owners to sit down and really get into the minutiae of how they plan on raising money, what they plan on doing with that money, and the type of business model they plan on following. A well-written business plan is a document that can (and should) be referred back to frequently to make sure a business is developing and growing as anticipated. If not, changes may need to be made or that initial plan may need to be re-visited.
Furthermore, since many small businesses will need some kind of financing or other investment to get off the ground, having a business plan is an important part of pitching a business to a potential investor. Without a business plan to send along with a request or application for funding, it’s not likely that any bank or investor is going to take you seriously.
Getting Started With a Business Plan
Writing a business plan is a time-consuming process, and these documents are generally not something that can be “cranked out” overnight; they required a great deal of thought and planning. And when there’s more than one business owner or stakeholder involved, it may take some additional time to reach agreed-upon decisions across-the-board. Still, there are a few tips worth keeping in mind throughout the process of writing a business plan.
For starters, those who plan on sending their business plans out to potential investors and/or banks should do their best to keep the plan concise and well organized. More than likely, these investors will be busy and may have several (if not dozens) of competing business plans to sift through. Making the document easy to skim through, if needed, can help improve readability and shows respect for the investor’s time.
It’s also key to understand (and include) all the basic elements of a business plan. This includes an executive summary, which should provide a general overview of the business itself. It can be helpful to write this last after reflecting on the rest of the plan. Other important components include the “opportunity” section (which should outline the problem or gap that the business aims to resolve) as well as the “execution” section that describes in detail how this will be done. This should include a detailed discussion of sales plans, operations strategies, and the like.
Including a financial plan is also key, especially to those pitching to investors. This portion of the business plan should include information on the funding being sought out, as well as financial projections for the first few years of operation. And of course, if there are charts, graphs, or other similar visuals, it’s always a good idea to include these in an appendix for easy reference.
Writing a small business plan can be time-consuming, but this document will be invaluable in the months and years ahead. By following these guidelines, it’s possible to develop a comprehensive plan for a small business in any industry.