Writing a business plan is one of the most if not the most important part of starting a small business. You need to know where you are starting and set yourself goals and milestones to grow into a successful business. Businesses can take years to become truly profitable. To get to that important moment in a small businesses life you need to plan and account for the next few years, yes you heard me, years.
We are going to breakdown the important moments of planning and writing your business plan.
Step One: The Business Overview
Now that you have settled on the idea and are sticking with it, you need to know that idea like the back of your hand. You need to decide on important things such as
- Executive Summary (Like a contents page)
- Company Description
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Step Two: The Market Analysis
So, you have spoken about who you are as a company, and the small details and now you need to develop them further. In the Market Analysis, you discuss in depth, the industry in which you operate. For example, if you run a movie theatre, you operate in the entertainment industry and therefore you speak for that industry as a whole. Find out who your market will be and refine that. Furthermore, look into the competition and learn all you can about who they are, how they do it, what they do and how you can compete with them.
Step Three: The Service or Product
What are you offering? You need to nail down all the aspects of the service or product that you will be supplying. In order to gain confidence from investors or partners, you need to know these small details to show your idea has been well thought out.
Step Four: Marketing
How will you be marketing this business given its existence in the grand scheme of the industry as a whole? It is also important to take into account things such as;
- Location – where you are is a big indication of how you will market. You won’t spend money on something that doesn’t work in the given location.
- Demographics – who are you targeting. Men? Women? Kids? Adults? How you speak to each of these demographics will be different and knowing that voice is important.
- Competition – who is the competition and how do you plan to challenge them? Fast Food restaurants are the perfect examples of competing brands Burger King vs. McDonald’s, Wendy’s Vs. Everyone. They use these feuds to benefit their own brands by targeting their competitors and stating why they are superior. People enjoy seeing the comedic value of these feuds and rebel in the satirical humor. At the same time, they actively discuss both brands creating word of mouth marketing one of the most powerful forms of marketing around.
Knowing the competition is a vital part of developing your business. You need to ascertain if the business is a viable option. Is there too much competition? Is the market oversaturated with this business model?
Step 5: Money, Money, Money
In order for you to be able to execute your business what will you need to start? Beyond that what will you need for the next three to five years? Investors and partners are generally how small business are started. Owners put in the starting capital but beyond that might need more funding. Big or small, never devalue the business plan. Map out your immediate expenses, consider monthly expenses and consider what the business needs to make to breakeven. While the goal is to make a profit, it should also be to breakeven anything below that, is dangerous.
Project earnings for the next few years and supply balance sheets with supporting evidence backing up your claims.
There you have it, some of the tips to writing an award-winning business plan. You can practically smell the profits.
Beyond the statistics, it is important to set goals for yourself and your business. Work towards a set of goals that apply to your business. It can be sales related, reaching targets, customer satisfaction, all of the above. Do not, however, set unrealistic goals that are unachievable. Be realistic in setting goals and work hard to make the business a success.