So, you’ve decided to dive headfirst into the glamorous world of small business. You’ve got a brilliant idea, unbridled enthusiasm, and maybe even a fancy logo. Now, all you need is a business plan.
Yes, that’s right—the dreaded business plan. That 200-page manifesto that will convince investors you’re the next Jeff Bezos and not just someone who’s watched “Shark Tank” one too many times.
The Two Greatest Myths About Business Plans
Myth 1: A Business Plan Must Be Hundreds of Pages Long
Reality: The length of a business plan should be determined by its purpose and audience. Most effective business plans are concise and focused, often ranging from 10 to 20 pages.
Myth 2: Business Plans are Only for Startups Seeking Funding
Reality: Business plans are valuable for any business, regardless of its stage. They help in setting strategic goals, planning for growth, and navigating challenges. Established businesses can use them to explore new opportunities, pivot strategies, or manage operational changes. And even if you aren't seeking external funding, a Business Plan is useful for your own use to make sure you've considered all aspects and done your due diligence.
Business Plans don't have to be War and Peace. BreathEasy provides a Business Plan Template that you can use and modify to suit your needs. The Tradesman's MBA also explains in depth how a business plan is written.
Let’s walk through this together, shall we?
Step 1: Company Description—Bragging Rights
Here’s where you get to toot your own horn. Describe your business in detail. What’s your mission? What are your goals? Who’s in your dream team? This is your chance to make your company sound like the next big thing, even if right now it’s just you and your cat working out of your garage.
Step 2: Market Analysis—Homework Time
Market analysis is where you show that you’ve done your homework. Investors want to see that you understand the market, know your competitors, and have identified a real, unsolved problem. You've done your SWOT, right?
Step 3: Organization and Management—Who's in Charge Here?
This section is all about showing off your team’s expertise. No, your mom’s testimonial about how smart you are doesn’t count. Highlight the credentials of your co-founders, advisors, and key employees. The goal here is to make investors believe that your team can actually pull this off.
Step 4: Service or Product Line—Your Big Idea
Now, let’s talk about what you’re actually selling, the meat at the center of the burger. This is where you detail your offerings. Explain how your business will operate, what services it provides and makes it unique. Be clear, be concise, and for the love of all that is holy, don’t use jargon that only industry insiders understand.
Step 5: Marketing and Sales Strategy—The Master Plan
How are you going to get the word out and convince people to buy your product? Lay out your marketing and sales strategy in this section. Are you going to rely on social media influencers? Will you have a killer SEO strategy? Maybe you’re planning a guerrilla marketing campaign that will have everyone talking. Whatever your strategy, describe it here. Incidentally, the Tradesman's MBA teaches you marketing fundamentals. You've read it, right?
Step 6: Funding Request—Show Me the Money
Here’s where you detail sources and uses of funds. Be specific about how much funding you need and what you’re going to do with it. Investors want to know that their money will be put to good use, not blown on extravagant launch parties and custom hoodies. Break down your funding needs and demonstrate how this investment will help you hit your milestones.
Step 7: Financial Projections—Crystal Ball Time
Finally, whip out your crystal ball and provide some financial projections. This is where you show that your business is not just a pipe dream but a potential goldmine. Project your revenue, expenses, and profits for the next three to five years. And remember, optimism is great, but delusion is not. And using key financial metrics such as NPV, IRR and other metrics will assist you and others to assess the feasibility of your company. The Trademan's MBA teaches you these metrics, use them!
Step 8: Executive Summary—The Elevator Pitch on Steroids
This is the section where you pretend you can summarize your entire groundbreaking concept in one page. Investors are busy people, after all. They have yachts to sail and IPO parties to attend. So, keep it snappy. Explain what your business does, your target market, and why you’re different from the other thousand startups with the same idea.
The Executive Summary is placed at the beginning of the Business Plan, but we do it LAST. The reason for this is because after you’ve written your masterpiece, summarizing it becomes much easier to do.
Summary
So, there you have it—a step-by-step guide to crafting a business plan that will (hopefully) have investors lining up to throw money at you. Just remember, while a great business plan can open doors, it’s your passion, persistence, and hard work that will ultimately turn your startup dream into reality.
And if you're still unsure about all the particulars of crafting your own business plan, BreathEasy Business Consulting and Bookkeeping is there to come along side and set you up for success. Why not reach out today and buy me a coffee?
Good luck!
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