Read articles about finances, saving and community news.
Access all the commercial banking resources your business needs to succeed.
June 07, 2016
June 07, 2016
You’ve probably already spent hours dreaming of starting your own business. So, let’s get serious and take the first step: creating a real plan. Getting an official business plan down on paper will help you get one step closer to making your dreams reality.
A business plan is a strategic document that defines where your business is starting from, where it wants to be three or five years from now, and the steps you will take to reach that goal. Having a well-prepared business plan can help you request financing and will improve the chances of getting the funds you need.
Your strategies and statements should be well thought out so that they can serve as a guide as you navigate reaching your business goals. The process of creating a plan will make you consider issues that will help determine your business’ success. So what goes into making a solid business plan?
Start with a cover. It seems simple, and maybe not worth mentioning, but a cover with your company’s and your contact information will help whoever is reading your business plan, for whatever purpose, be able to identify and reach you. It can also give a little character, or set the tone, for the information within it.
You’ve only got one shot…the executive summary. Many investors and potential partners won’t make it past your executive summary. Take that as a challenge. This section should grab your audience’s attention and pull them in. Simply put, an executive summary is an overview of your business. It should give your reader a sense of what the rest of your business plan has to say. It should be compelling, succinct and direct in telling your business’ story. Think of your executive summary as a sneak peak that convinces your audience to read the rest of the document. What’s unique or exciting about your business? What’s one of your business’ strengths? Start there.
Company overview: answer the five Ws. Give your reader the who, what, where, when and why of your business. Your company overview should include basic information like when the business began; current or planned locations; details about your product or service; your goals and objectives; and any other pertinent details about the current state of the business. Think of it this way: your reader got past the executive summary. Now he or she wants to get to the next level of understanding your business. Give people the basic details they want.
Prove you know what you’re getting into with industry analysis. This section should indicate your understanding for the market your business is part of. What trends are you seeing? What does your competition look like? Is there demand for what your business will provide? This section should include the challenges of this market, but also point to the opportunity for your business to shine.
Design, develop… One section of your business plan should detail how your product or service will be designed and implemented. This area will really spell out the logistics of what your company will do and how it will distribute that good or service. Describe how your business will make what your selling come to life.
…then market! But, it’s also important to detail who you’re selling to. What will your potential customer base look like? What kinds of people are most likely to buy your product? How will they find out about it? It’s important to get a clear idea of who you’re appealing to. That customer picture will also help you document your plans for reaching them. If your customer base is younger and tech savvy, you’ll know that online and social media marketing channels are the way to go as opposed to print materials or flyers around town. Be as detailed as you can about how you’ll get the word out about what you do.
These are all just ideas until you have a plan for operations. Every investor or stakeholder wants to know how you’ll actually make your business run day-to-day. That’s why your operations section of your business plan is so important and needs to be well thought out. This section will help you think logistically about how things will run on a continuing basis. So, what managerial roles will you have? What kinds of tasks will need to be accomplished and by whom? This will also help you get a picture of who you’ll need to hire.
Make a plan. Plan to make…money. The financial plan for how your business will make money is key to this document. This section will outline your financial projections and identify what kind of funding you’ll need to make it happen. You need to document how much money you’re looking for to get the business up and running and how much you’ll need to reach the milestones you’ve set for yourself along the way. It’s also helpful to really detail how the funds will be used.
And, finally, an appendix. The last section of your business plan is the appendix, which provides the supporting documentation for everything you claimed throughout your business plan. Pretty important, right? Include any details about patents, customers, market analysis, permits, contracts…basically, anything that will help prove to stakeholders that your business is a solid, well-thought-out investment.
Make sure you know what you’re getting into. A business plan is not easy. It requires that you think through a lot and that you’re prepared to back up your decisions. This process can take a lot of time but, the hard work you put in now, will ensure a solid foundation for your business later. Happy writing!