what is a business plan
A business plan is a written document that describes in great detail the businesses future objectives, and how they’re going to achieve their goals. It’s a thoroughly laid out roadmap covering all areas such as marketing, financial planning, etc.
A business plan will attract potential investors as they’re able to see what your plans are for the company. If the company has no proven track record, then the only aspect investors can analyse is your business plan. It’s also a good way for companies to keep on track and going forward.
Business plans are essential for a small business or a startup as they’ll need to keep organised. Although, bigger companies usually have business plans that are reviewed annually or whenever their targets have been met. This is a good way to see if you’re hitting your expected goals. Once the goals have been reached, you’ll create a new business plan and keep moving forward.
Before You Start Your Own Business
Building a plan for a business you would like to open is something you should do long before you start looking for funding to get things started. Entrepreneurs who carefully take the time to develop a creative, in-depth plan for their businesses tend to have much more success because they have already thought about a lot of the things they want to do and a lot of the goals they would like to achieve. It does not hurt to think ahead when you are planning to run a business and hoping to have the most success with it. If you are ready to get started with your business plan, you should ask yourself the following questions and then use your answers to create a detailed outline.
10 steps to setting up a business plan
1. dECIDE WHAT TYPE OF BUSINESS YOU’RE GOING TO RUN
You should always know more about the type of business you are most interested in running long before you get started with seeking funding and trying to get everything together for a grand opening. There is a good chance that you already have quite a few good ideas on what you are going to do, whether you are going to offer custom T-Shirts, beauty products, handmade items, or even food to the public. Once you know what type of business you are planning to run, you should add it to your outline and then include details on the things you will need to have if you want to get started. Deciding whether you want a PLC or LTD company would be vital as well, look at how much you wish to invest in the company and where you see it in the future.
It helps to create a list of the different inventory you may need to invest in to get your business started. For example, if you are going run a food service business, you are going to need different types of equipment to produce food in a restaurant environment, such as ovens, mixers, stoves, and more. If you are going to make your own clothes and sell them, you are going to need to get different types of fabric, materials, and thread to put these items together. Make a detailed list of everything you are going to need to get your start in the industry.
2. aNALYSE YOUR COMPETITION
It is only realistic to be fully aware of the competition you are going to deal with after you open your own business. The competition will depend on a few different factors, including the people you are targeting and the specific products you are selling to them. If you have a restaurant and you are planning to open it in a specific area, you should be aware of how much competition you are going to have in that area. It helps to know what the competition is like and how much of it you are going to end up dealing with based on where you plan to open your business. Some areas may have a higher competitive marketplace than others and after analysing it, you may find it may be better to open elsewhere.
Dealing with some competition is not necessarily a bad thing. However, you must be wise about your decision to open a business in an area where there is a lot of competition because then you are going to need to work even harder to make an impression on the customers and to get the customers to visit your establishment instead of any of the other establishments that are offering similar items to the ones you are currently selling.
3. Are You Going to Open a Store or Stick to E-commerce?
The next thing to include in your business plan is your plans for the location of the business. You may want to open a physical store where people can come into the establishment, look around at what you are selling, and then decide if they would like to buy something specific from your store. If you are interested in running a food business, opening a physical store would likely be the only way for you to do business with the customers. However, based on what you are planning to sell to the public, you may be able to stick with the e-commerce route, just select one of the best e-com platforms to host and manage your website on. You could even test your product online, then open a physical store depending on the results.
If you do decide to open an e-commerce store as apposed to a physical store, then Shopify is a beginner friendly platform to host your store. Shopify also has plenty of side apps such as Printify which will benefit you if you’re planning on opening a clothing store. An e-commerce store may work out just as good as a physical store as you won’t have as many overheads such as rent, electrical bills, etc. All’s you’ll have to pay is the advertising, and the monthly fee to keep the store open.
Many outsiders think e-commerce is just dropshipping, this is wrong. Although, you could dropship a variety of different products to see which one works the best, then customise it to yourself, but e-commerce isn’t just restricted to dropshipping.
4. WILL YOU HAVE BUSINESS PARTNERS?
Make sure to include details on who will own the business and who will help with it. As the person who is focusing on getting things started, you may be the one who takes on the role of the CEO. You can choose to work alone, or you can choose to have to help hands with different aspects of developing the business and getting it to grow. You should include the names of everyone you are planning to work within your business plan, whether they are going to take on roles as co-owners or take on other types of important roles within the business.
5. FUND RAISING
Finding out how to get the funding to get your business started is one of the most important things to include in your business plan. Without the proper funding, it would be nearly impossible for you to get things started. If you cannot afford to open your startup, you would not be able to follow your dreams of becoming the entrepreneur you have always wanted to be, which simply is not fair. It is the reason why it is so important for you to make a list of all the different funding options that are available to you. There are plenty of resources, so it is only a matter of using those resources to your advantage.
Applying for loans is a great way to get the funds you need to open your business. Numerous loans are available, including options from the Small Business Administration as well as private lenders. Decide which types of loans you are looking forward to applying for and then include a list of those loans in your business plan. In addition to various types of loans that you can apply for, you may want to obtain a business credit card that you can start to use to make purchases for different types of inventory and other essential expenses.
While loans and business credit cards are fantastic options for entrepreneurs looking to get funding for their ventures, there are even more options available, including crowdfunding sources and private investors. You can always choose to reach out to different investors who may have an interest in your business. The only thing about having investors provide funding for your venture is that they are going to want to own a share of the profit you start bringing in from your sales, so it is a good idea to find out more on their expectations before you agree to take money from them for your startup.
6. HOW WILL YOU ADVERTISE?
You are going to need to devise a strategic marketing plan that works in favour of your business. Your plan should include all the different ways in which you are planning to start marketing your products, including traditional marketing methods as well as digital marketing methods that are becoming increasingly popular. You may have a few different ideas when it comes to advertising in a traditional manner, such as having commercials created, buying billboard space, and even sending out flyers or postcards to people in the area where you may plan to open your store.
While some of those traditional marketing methods may work well in the beginning, you are going to need to have a good digital marketing strategy put in place, too. Too many people are going online and browsing the internet for you to pass up on the chance to reach them. The great thing about digital marketing is that it gives you even more opportunities to build a bond with the consumers while easily targeting the right people. You need to target the right people if you want to get more customers and start having a lot more success with your business.
There are different ways to market your business online. Some of these different methods include using social media sites, such as Facebook, Instagram, Pinterest, and even YouTube. You would need to create content for each of these different social sites, working hard to get followers on the various different platforms. The more followers you start to get, the better chance you have of successfully running a profitable business. Along with advertising on social media, you can purchase ad space and even get involved in forums, providing advice relating to the stuff you currently sell.
7. Will You Create a Website?
You need to decide if you are going to create your own website. It makes the most sense to have a website developed for your business because that is one of the ways people will start to find you on the internet. If you are going to have a website created, you should include details about it in your plan, including the name you plan to use, the way that you want the site to look, and the content you are planning to put on it, including blog posts, images, infographics, and even short videos relating to the products and services in some way.
You should include a few more details in your business plan, such as where you plan on getting hosting for the site, how much you can afford to pay, and who you plan to have helped you with the website design. If you are not familiar with designing websites, you should leave it up to a professional to help create a design that looks neat and displays everything you are selling the right way. These details are worth including in your plan because you may need to look back at them at some point, especially when you are finally having your site developed.
8. SETTING GOALS
Always set goals and include them in your plan. There are a few good reasons to set realistic goals for the business. You need to have something written down on paper to keep you motivated and working hard. If you see the specific types of goals you have set for yourself, you are going to want to continue completing tasks and pushing forward to see the fruits of your labour. It will feel good to reach a single goal and once you reach one goal, you may feel even more motivated to reach additional goals.
While it is important to set some goals and jot them down in your plan, you need to make sure you are being realistic. Overestimating and writing down unrealistic goals will only cause you to feel frustrated and upset when you do not reach them by a certain time. Some of the goals may include making a specific number of sales by a set date and bringing in a certain amount of money by a specific date. These are just a few of the many different goals you can set for yourself and include in your business plan.
9. Do You Know Who You Are Going to Target?
Do not forget to include details on your targeted audience when you are building your business plan. There are certain people who can benefit the most from the items you are selling. Figure out which groups of people would benefit the most from what you are selling and then include details about their demographics in the plan. For example, you may want to market to pregnant women or women who are engaged that may end up pregnant in the future. It all depends on what you sell because you want to target people who can benefit the most from what you have to offer.
10. What Kind of Work Will You Complete Daily and Will You Hire Employees?
Make it a point to include details on the work you will need to complete regularly while operating your own business. What are some of the things you are going to be responsible for handling? In addition to making a list of all the different things you are going to need to do as the person who runs the company, you should also decide if you are planning to hire additional employees to work for your or not. Deciding to hire employees will all depend on a few different factors, including the number of funds you have available to use and the amount of work you are currently handling all on your own.
If you would love to become a successful business owner, one of the best things you could possibly do in the very beginning is create a detailed business plan that outlines all the different things you want to do and are planning to do to achieve each of the different goals you have. While some business owners end up failing within the first few years of operating, it is usually because they did not spend enough time creating a plan for their businesses and ended up making a lot of mistakes because of it. If you are careful enough to get these different details figured out in advance, you may have much more success.