Picture yourself in a place you’ve never been before. The charge on your smartphone goes dead. You don’t have a GPS or map with you, and you have no idea where to turn to ask for directions.
Entrepreneurs starting their own businesses for the first time often experience this frightening, helpless feeling. Fortunately, there is a perfect solution for avoiding this nightmare – a business plan.
A business plan is critical to give you a detailed roadmap of where you are headed with your new venture.
Include the following sections in your business plan prior to formally opening your doors and making your first transaction:
1. A basic company profile
The first section of a business plan may need to actually be constructed last. That’s because you should begin with a table of contents-style introduction that, in very general terms, explains your business plan and your small business itself. Include how the business will function, the products or services you plan to offer, an overview of your target market, and any other relevant information from a broad perspective.
2. An in-depth description of the business
After beginning with a basic company profile, take it a lot further in this section. Determine how your company will differ from others offering similar goods or services. Decide on the infrastructure of the business and where it will be based. What will your day-to-day responsibilities include? Will you hire a team of W-2 employees or 1099 independent contractors? If so, when will they work, what will they do, and how much will you pay them? Iron out these specific details in this section so that you have the proper foundation in place for the best chance of being successful.
3. Overview of your target market, competitors, & industry
Defining the specific groups of people who could benefit from what you sell is critical. How old are these potential customers? Are they primarily male, female, or both? Where do they live? How much money do they make, and what is their buying power? Where are they more likely to shop – in a retail store or online? In addition, do plenty of research on your industry to determine its past, present, and future. Then determine who else is out there in your line of work and what they are doing to enjoy financial prosperity. Consider how you could approach things a little differently to gain an edge on your competitors.
4. A detailed description of your products and/or services
In this section of your business plan, delve deeply into your products or services. Describe them using as many adjectives and keywords as you can. Think about why someone would want to buy what you sell. Weigh your options on prices or rates for these offerings. It’s important to get as detailed as possible, especially so you can use this information for sales and marketing purposes.
5. A thorough marketing plan
How do you plan to get the word out about your small business to make others aware of what you offer? Develop a list of all potential marketing strategies you think best apply to your customer base. Perhaps you’re thinking about buying Facebook ads and setting up an Instagram account for the company. Maybe you think running TV commercials on your local stations would be more effective. Or, you could always put up a digital billboard on a busy road in town or buy ad space in a relevant publication. Keep all of your best selling points in mind when crafting a marketing plan. Also, be sure you have an ample budget for these practices, assuming you think you’ll be doing lots of advertising either initially or on an ongoing basis. Put yourself in the shoes of a potential customer and think about how they’d find out about your company and why they’d want to purchase from you instead of someone else.
6. A financial plan with business expenses and profit projections
The main reason startups fail is due to a lack of funding and proper financial planning. Make a reasonable estimation of how much startup funding you will need to get everything up and running. Explore loans for small businesses, government-provided grants, and crowdfunding. Determine every single startup cost you may face for any equipment you’ll need, rental space in an office complex or storefront, and marketing. Consider the manufacturing fees for your products and the price tags you will place on each item. Finally, make projections about your profits for the next 3 months, 6 months, a year, 3 years, and even 5 years ahead.
7. An appendix or reference section
A formal business plan should conclude with some kind of reference section or appendix. This could consist of important paperwork like resumes, permits, leases, and business-related financial records. You may also want to include a list of important people in your professional network and copies of any research materials you’ve uncovered. It’s important to keep all of these documents in order for easy access when you need them. You might want to maintain both hard copies and digital scans of these documents and your business plan as a whole to make sure these records are kept safe.
Tying Your Business Plan Together
Once you’ve spent enough time crafting all of these sections, you should have a solid business plan in place that you can use now and in the future. Keep a hard copy and digital version of your business plan so that you can easily access it at home or on the go.
For assistance in crafting the perfect business plan and building an effective financial foundation for your venture, turn to the experts at 1-800Accountant. Call 1-800-222-6868 or check out the “Services” page on www.1-800Accountant.
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