A business plan is your dream on paper, where you consider your business from every angle and write it all down. It doesn’t need to be extremely formal, at least not at first. Let yourself have fun with this process while you’re creating direction for your business. Answering key questions for yourself will help narrow your focus and your ideas will start coming to life. I talk about the all-important business plan in my fourth episode of The New Entrepreneur:
A business plan will serve as a road map for you, and eventually you will use it to present your dream clearly to potential investors, and banks. Your plan is very important in the capital raising process – most investors will expect you to be professional and prepared when seeking their financial support. Be realistic about your chances for success, and be honest about positive and negative findings. Discuss any risks and don’t make vague or unsubstantiated statements. Investors will respect you more if you are completely upfront with them.
When working on your plan, break it into sections and concentrate on one at a time so you aren’t overwhelmed. When you feel like you’re done, leave it for a few days so you can reassess it later with fresh eyes. Use business plan templates as a checklist to see that you’ve covered all your bases, and have looked clearly at the big picture. Be prepared to spend weeks or months working on it! You want it to be as complete as possible. However, you should also try to be brief, and use lay-men’s terms to describe your business. An average business plan will be 10 to 40 pages long.
Anatomy of the official business plan:
- letter of transmittal – officially introduces your business plan to the reader
- title page
- table of contents
- executive summary & fact sheet
- body of plan
- appendices (supporting material)
That might seem intimidating, but it doesn’t need to be a scary process. Take some time to dream (and research) while you answer the questions below.
Don’t forget to measure your success on multiple bottom lines – use your business as a tool to make a contribution. Put your values in your planning process, right from the beginning. When looking at each of the questions below, consider how you can positively impact your community, your staff, your customers and the world by the way you do business. Write a powerful mission statement for your business and include this in the beginning of your plan.
Action Steps for Success: 20 Questions to Get Your Business Plan Started
- Who would be your ideal customer, and why would they buy from you – what exactly are you providing them?
- Can your customers access you easily (online or in-person)?
- How many potential customers would you have?
- How much would they pay, and how often would they buy from you?
- How will your customers find you?
- How will you advertise, and how much money will you spend on advertising?
- How will you use social media and traditional media?
- How will you present yourself and brand so that you attract the partners, staff and customers you want?
- How will you sell distribute and promote your product?
- Is there already someone else doing what you’re talking about?
- What is the size and nature of the competition?
- How are you different – what can you offer to make business stand out?
- Funding your business- If financing, what rates are you paying? If you are going through investors, what is the return to the investor
- How often will you pay yourself, and what percentage of the profits will you reinvest in the business?
- What is your profit margin? What are your costs vs. your potential profit?
- What will your start up costs be, and how many units do you need to sell before you break even?
- How much money will you need to run the business each month?
- Will your business be affected by the seasons – will some months be busier than others?
Challenges and Risks
- Are there regulatory requirements, testing or legal issues to address?
- Is there anything that could go wrong? Are there any other potential concerns?