Writing a business plan is an important early step for new business ventures. A strong written business plan can help a new owner outline goals, understand the marketplace and define measures for success. A business plan can provide direction and clarity for a new idea, as well as attract funding support.
As an aspiring business owner, how can you write a business plan that sets you up for success? Using a standardized template and following a few key tips will help get the writing process going.
Learn How to Structure a Business Plan
According to the Small Business Administration, a well-crafted, traditional business plan includes seven main sections, plus an appendix. Those main sections are: an executive summary, the company description, a market analysis, a detailed explanation of organization structure and management, a description of the product or service, a marketing plan, a request for funding and financial projections. The appendix is home to supporting documents and required pieces such as credit history, permits, licenses and contracts.
Research the Competitive Environment
A successful business plan starts with a good idea, then comes to life with market research. Whether you’re hoping to open a local cake shop or launch a national online service, you’ll need to understand what other companies are operating in the same space and how customers are interacting with them. Start by researching competitors, looking at their product lines, marketing tactics and what they’re doing well. You’ll also want to gather some background about the industry as a whole, to get an understanding of its growth potential or how risky it might be. From there, start narrowing down the target audience for your business idea. Is there a specific location, demographic or lifestyle segment that defines your proposed audience? With an audience in mind, you can start researching the buying habits, behaviors and marketing preferences of your future customers.
Find Ways for Your Product or Service to Stand Out
Going into writing a business plan, you likely already have a product or service in mind. Any business plan template will include a section to describe the product or service being offered and how that offering is different from what’s currently available. Strong business plans bring new ideas and show how they will work. Thinking about how a service can be delivered efficiently will make this section more powerful. Founders with additional training like a Lean Six Sigma certification will have an advantage here, in being able to come up with ideas for reducing waste and increasing customer service.
Write an Engaging Executive Summary
Similar to a pitch deck or an elevator pitch, an executive summary succinctly outlines why your business will succeed to a potential investor. SCORE offers a free template for putting together the executive summary, along with the other key pieces of the plan. Usually running 1-3 pages, the executive summary gives an overview of the company and its goals. It’s the first section a potential funder will see, and it’s important that it represents your business idea in the best way possible. An executive summary should include the highlights of your overall business plan and make a convincing argument for the viability of the enterprise. Sections typically include an introduction, summary of objectives, description of the product or service idea, a short competitive analysis, and a compelling justification of the business’s earning potential and funding needs.
Craft a Marketing Strategy
Any business plan needs to include a strategy for how customers will learn about your new product or service. Marketing plans typically include a list of broad business goals that will be achieved through marketing. A set of objectives supports each of those goals, and a list of tactics goes over how you’ll achieve each objective. The type of business, target audience and overall business goals should guide the marketing plan.
Marketing includes advertising, public relations, branding and any other public-facing piece promoting your business. Think about who you’re hoping to reach with each marketing goal and objective, then pick the appropriate channel for reaching them. For example, if the goal is to attract new customers age 25-34 to buy a cookbook, tactics could include a series of Instagram videos showcasing recipes and a public relations campaign to online food writers.
The marketing plan should mention areas for future growth, such as new or extended product lines, an expanded geographic footprint, or price increases down the road. These are objectives that can be supported by marketing tactics after your business has a successful launch.
Working through every part of a business plan will help you refine your idea, map out next steps and decide that you’re ready to move forward.