When you are starting a new business there are many different steps to complete prior to opening your doors. One of the most important steps includes writing your business plan, so you can properly identify if you should start a business and how to make it successful.
Learning the entrepreneurship basics is very important for future, and sometimes current, business owners. In part two of this miniseries, we highlighted some of the best tactics for naming your business.
In this installment, we discuss how to write your business plan and how it helps set the foundation for your business. Once your business is on paper you will hopefully be well prepared to begin building it brick-by-brick.
As an entrepreneur it is important to include the following elements into your business plan to determine if the business is ready to move forward. Use this guide to help document your plan and begin preparing for your journey into becoming an entrepreneur.
Business Plan Essentials
Executive Summary/Company Overview
This section of your business plan provides a basic summary of the business as a whole. Make sure to describe the business, its products or services, key financial information, key objectives via a mission statement, and a vision for the future. Since this is the first part of your business plan, the summary should be short to ensure individuals will be able to quickly review and understand your business model.
You must demonstrate your market knowledge by highlighting the research you conducted on the industry and marketplace. Describing your industry with past, current, and future growth statistics and other determining characteristics is vital. Develop a description of your business’ target market that includes customer size, competitive market share, as well as key persona characteristics to help you understand how to further direct your business toward its market potential. This section should also include an analysis of your competition by conducting multiple swot analyses.
It is important to show the structural organization of your business on paper, including listing the legal business structure (part one in our miniseries), the breakdown of ownership, and the assigned management tasks with company job titles. It is also important to highlight key individuals within the organization to show their education, career backgrounds, and essential skills/knowledge that the business will benefit from.
You will need to describe the overall marketing and sales strategy for your business. Identifying your business tactics for entering and growing within the marketplace is important. For more information on creating your marketing plan, read the final part of our entrepreneurship basics miniseries.
You must be able to project where you believe your company’s achievements lie, via projected financial data reporting, to be successful in the first five years. By making financial projections you will be able track the progress of your business toward reaching those short and long-term growth goals. The data will also help potential investors, such as other individuals, VC’s or banks, to further understand the value of investing in you and your new business.
This part is optional, but you may include an appendix to provide information to readers on an as needed basis. The appendix should include relevant information that only key individuals, such as investors or creditors, may want access to. Check out the appendix page on SBA.gov for more information.
There is no denying you need to put lots of time, consideration, and research into writing your business plan. Upon completing the written breakdown and analysis, you should be able to determine if you are ready to take the next step toward starting your business.
Learning these entrepreneurship basics is important because no business is fail proof. Hopefully, by writing your business plan you will be able to see how you can guide your business toward success.
Watch out for the final installment of our Entrepreneurship Basics miniseries titled, Developing a Marketing Plan.