Writing a business plan can seem like an intimidating prospect if you’ve never done it before. Starting a business is both exciting, because you get to pursue your passion every day and make something out of nothing; and terrifying, because starting from scratch requires an enormous amount of work and planning if you want to succeed. That’s why having an excellent business plan is so critical to the success of your small business; it will help you stay on track and achieve the goals you set out in the beginning. In this step-by-step guide, we’ll explain what a business plan is and show you how to write a business plan to help you get started in no time.
Knowing where you’re headed is a big step toward actually getting there. You’ll be able to present your plan with confidence, and secure in your knowledge of your business and its goals. With your business plan in hand, it’s much easier to obtain financing or attract investors, who will see how serious you are about starting and running your business.
Writing a business plan helps you to create a formal structure of your idea and can help you to streamline the process of getting yoru business started. It allows you an opportunity to sit down and think things through. Plus, having a plan will help you feel prepared when the unexpected happens. This guide will walk you through the process of writing your own business plan in five easy steps that take no more than an hour.
What is a Business Plan?
A business plan is a document that outlines your company’s mission, goals, and objectives. It also includes information about how you will achieve those objectives. You can use it to convince investors or lenders that your business idea is sound or to make sure you have everything you need before getting started. And because it documents the steps involved in starting your new venture, it can serve as the blueprint for future success.
In addition to outlining the steps you’ll need to take on your journey, this document will also help you estimate your start-up costs and calculate what taxes you’ll owe. And as we all know, taxes are one of the most important considerations when starting any business.
Let’s face it, starting a business has it’s own stresses, but when you add the prospect of taxes into the mix, things can start to feel overwhelming. One of the most important things you can do as an entrepreneur is to make sure you’re aware of what taxes apply to your situation and how they will affect your business.
The first step in writing your business plan is developing the business idea. This can be done through brainstorming, surveys, interviews, or observations. Once you have an idea of what you want to do, take time to think about it and decide if this is the right time for your idea. You should also consider whether you will be able to make money off of the idea by doing market research, talking with people in your field, etc.
A Step-by-step Guide to Write a Business Plan
Step 1) Create an Executive Summary Section
For the first page of your business plan, you will need an executive summary. This is a brief statement that acts as a short introduction to the plans and purpose of your business. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.
Although your investors will read the executive summary first, it can be easier to write it last because you can then highlight the information you’ve identified as you write other sections.
Step 2) Describe Your Small Business
Your next step is to write your company description. You’ll want to include some specific information in this section. Explain how your company will be organized and lay out the overall employee structure.
- The type of business you plan to operate. This could be a sole proprietorship, a partnership, or a corporation.
- The registered name of your business.
- The address of your place of business, or your preferred location if space has not yet been secured.
- Members of your business and note their unique skills or area of expertise.
- Include any investment partners as well as how much stake each owner has in the business.
Lastly, it should outline your company’s past, its present-day status, and goals for the future. Doing so prepares readers for what to expect from the next section of your business plan.
Step 3) Outline the Products or Services Section
The next step is deciding on your products or services and designing them into something that people will buy/use. When designing products or services make sure that they are different from competitors’ products and design them so that customers would buy them again.
Step 4) State Your Goals for Your Business
Here you will list your overall objectives for the business, such as profit projections and other company-related goals.
Create a list of all the resources you’ll need to complete your business plan. In this step, list anything from finances to raw materials that you will need to both start and complete your goals. List any capital investments that might be required for your business as well.
For example: if you’re opening a restaurant and investing in kitchen equipment or new furniture for the dining area, including those expenses in this step. List any costs that might not be evident in later steps of the process (for instance, advertising campaigns). Finally, estimate how much money it would take to start up the business and keep it running until it becomes self-sustaining.
5) Financial Projections Section
Before you can create an accurate business plan, you need to know how much money you’ll need.
This section includes the total projected cost of the start-up. Show the amount that the owner plans to or has already invested. Include any additional investors, their invested amounts, and any of their expected return on investment (ROI). Also, include any additional business loans you may have for this business as well as the interest rate attached to each loan.
Score.org is a free resource providing mentorship as well as resources for helping you get started with your own business.
Capital Required is what you’ll need to get started. This includes things like the amount of money needed for equipment and inventory, advertising and promotional expenditures, etc. Working Capital is money you’ll need to keep your doors open. It’s calculated by determining how much cash your business will burn each month and dividing it by 12. This will give you an average monthly figure that you can use as a baseline calculation.
Step 6) Marketing Strategies Section
In this section, outline your general plan for marketing your business.
Marketing is how you get people interested in your product or service. Three main strategies can be used: advertising, public relations, and sales. Advertising includes things like TV commercials and print ads, while public relations include getting your business in the news, attending networking events, speaking at a business engagement, or seeking professional or client referrals. Marketing involves making connections with people who will eventually buy what you’re selling.
Now that you know how to write a business plan, it’s time to get started. Start by brainstorming your idea and outlining the goals of your business. Once you have that figured out, it’s time to write up an executive summary and create a mission statement. From there, research your market and competitors, determine the value proposition of your product or service, and figure out what kind of company structure would work best for you. Then, determine what your financial situation is, and what your needs are in terms of investors and loans.
This information is not intended as legal or tax advice. Cowdery Tax and its representatives does not offer legal or tax advice. We offer services for business bookkeeping, payroll, tax payments, and personal tax filings. We share information that is publicly available. Tax laws may change with or without notice that may alter or change the information contained in this publication.