How to write a business plan: A beginner's guide
A business plan is more than a document. It’s a guide that helps you outline and achieve your goals. It’s also a management tool that allows you to analyze results, make strategic decisions, and showcase how your business will operate, and grow.
A well-written business plan holds a lot of value. It’s where your ideas start to take shape and the direction of your new enterprise becomes clear – but it can seem intimidating. Business plans require focus: you’re stating why you’re doing what you’re doing, and how you expect to do it. There can be a lot to note down.
What is a business plan?
In short, a business plan is a description of your business and everything that goes into it. As well as helping to clarify the business idea that you have, it brings into focus elements like financing, staffing, revenue targets, and marketing strategies. Business plans aren’t exclusive to startups, either. If you’re regenerating an existing company, a detailed and structured plan is enormously useful. You’ll ideally need to achieve the following with your business plan:
- A clear vision and purpose for the business – why is it important?
- A guide that can be used as a reference throughout the company’s growth.
- An objective outlook on the market potential of what it is your business is doing.
1. Keep it short
Business plans should be short and concise. Your business plan should be a tool you use to run and grow your business. An excessively long business plan is a huge hassle to revise—you’re almost guaranteed that your plan will be relegated to a desk drawer, never to be seen again.
2. Know your audience
Write your plan using language that your audience will understand. Accommodate your investors, and keep explanations of your product simple and direct, using terms that everyone can understand. You can always use the appendix of your plan to provide the full specs if needed.
3. Test your business idea
Working through your business plan, and starting with a one-page pitch, can help you test the viability of your business idea long before launching. As you work through everything from your branding and mission statement, to your opportunity and execution, the best thing you can do is get feedback and test different elements of your business. This can be as simple as having a mentor or partner review elements of your plan, or conducting market research and speaking directly to your potential customer base.
4. Establish goals and objectives
You should know what you want to get out of your business upfront. Are you wanting to turn a side hustle into a full-time business? Trying to expand your team or launch an additional location? Knowing what you’re trying to accomplish, and having questions like these in mind, can help you develop your business plan specifically to reach these goals.
Now, you may not have every milestone or even specific steps in mind to reach your goals before starting. But that’s the beauty of working through your business plan. It will help you define metrics of success, flesh out your goals and further develop elements of your business to meet specific objectives. You just need a vision or even aspirational goals to start with to better hone in on what’s important.
5. Don’t be intimidated
Writing a business plan may seem like a big hurdle, but it doesn’t have to be. You know your business—you’re the expert on it. For that reason alone, writing a business plan and then leveraging your plan for growth won’t be nearly as challenging as you think. And you don’t have to start with the full, detailed business plan that I’m going to describe here. In fact, it can be much easier to start with a simple, one-page business plan and then come back and build a slightly longer, more detailed business plan later.
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