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Once you have your concept and market research completed, the next step to starting your own business is putting together a business plan.
Once you have your business concept market research completed, it’s time to move on to the next step of starting your own business—the business plan. A business plan is an extensive document that is critical for anyone looking for outside financing, but even if you intend to self-fund your business, your business plan is the heart and soul of your business.
Work Up a Business Plan
A business plan is one of the most important documents you’ll create for your business. While the main function of a business plan is typically to inform potential investors and financial institutions on how your business is expected to run, what it does, and how it is expected to profit—it is also invaluable for keeping you on track and keeping company management informed on how your business is supposed to operate.
This document should be very in-depth and cover a wide range of areas of your business, outlining your plan for each aspect.
- Executive summary: This is a quick summary of your business plan, so it should focus on the main points. It goes at the beginning of the document, but it should be the last part that is written.
- Company description: This is an overview of your company’s products and services and how your business plan intends to utilize these in a new way that fills a gap in the current market.
- Market analysis: This provides an overview of your current competition in the market and how your company is positioned against them based on your business concept.
- Structure: This portion is mainly focused on which business structure your company will be—a sole proprietorship, a partnership, or an LLC, for example. The structure you choose should align with the risk management and organizational strategies you’ve established for your business.
- Mission and goals: Your mission statement goes here. You should also outline several goals that you hope your business is able to achieve. A common term for how to create appropriate goals is SMART: specific, measurable, action-orientated, realistic, and time-bound.
- Products and services: This section will clearly outline the products and services you intend to offer. It also needs to go over how much you will charge for these products and services, how you will source them, and how much they will cost to make (or perform, in the case of services).
- Background summary: This section is a compilation and summary of all of the research you have done on trends that have the ability to positively or negatively impact your business. Do not rush this section—you should do extensive research to ensure that you have a wealth of information to base your business expectations on.
- Marketing plan: While part of this section is intended to analyze competitors, the focus is on your own marketing strategy. How you will market your products or services, how much of your business funds will be allotted for marketing, and how long each marketing campaign will last.
- Financial plan: The point of a business is to turn a profit, so your financial plan is the core of your business plan. It should include an overall budget and a 5-year financial projection that includes an income statement, a balance sheet, and a statement of cash flows.
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