How to Create a Business Plan
If you are planning to start your small business, then you need to know how to create a business plan. According to a study, planning can help a business grow up to 30% faster and improve the overall performance of a business.
It is integral to write a business plan because this will serve as your roadmap or blueprint to guide you to your business. It will create a vivid picture of how your business will be, what possible roadblocks you may encounter, how your business will work and generate money, and most especially, how it will grow.
Although it sounds overwhelming to even start writing your own business plan, it is much simpler than you think. To help you write, you first need to identify the purpose of your business, second is your target market, and third is to take action. Once you have this information, you will enjoy writing your business plan as you will find it much easier.
Initial Steps in Writing a Business Plan
1. Determine your vision
Having a vision for your business is important. It’s best if you have a clear goal in your mind and what you need to do to achieve it. Goals are usually driven by dreams and passion that create your sense of purpose. It also serves as a guide or the “North Star” of an organization, which therefore creates a sense of direction and belongingness. When properly aligned, it helps the organization to work harder and increase productivity and efficiency, leading your business to success.
2. Set your goals and objectives
Setting goals help you stay motivated to turn your vision into reality. Like your vision, it gives you a sense of direction and takes charge of the future of your business. But your goals and objectives are more comprehensive than your vision because this somewhat serves as your step-by-step guide on how you will achieve the intention of your vision.
Your goals and objectives should be SMART:
- Specific – straight forward and well-defined goal
- Measurable – quantifying your goals
- Attainable – the measurable goals are achievable
- Relevant – your goals should be important to you
- Time-specific – goals should have a deadline to create a sense of importance
3. Classify your unique selling proposition (USP)
Pinpoint what sets you apart from your competitors or what extras your customers are getting from you. This way, you will know what your advantages are against your competitors. Also, this will help you attract and retain customers.
To help you identify your UPS, you should:
- Know what your customers want by putting yourself in their shoes.
- Identify the motives of your customers for availing your product or service.
- Discover why your customers keep coming back for your product or service.
- Find out how your product or service solves your customers’ problems or fill their needs.
4. Study your market
Your research in your market can make or break your startup business. Studying your market can help you reduce the risk of failure because you will have a better understanding of your target customers and what makes your product or service stand out compared to your competitors.
The elements of your market analysis should include:
- The industry of your business you are in, such as type, characteristics, size, and demand.
- Your competition, specifically, who are the largest players in your industry or business that have a similar service or product line as you have.
5. Know your customer
The more you know about your target customers, the more you will know where to find them, how to reach them, how to talk to them, and what you can offer to them.
These four elements can help you profile your target customers:
- Geographics. This is the country, state, region where your customers reside.
- Demographics. This is the age, gender, ethnicity, income level, and marital status of your customers.
- Psychographics. This is the lifestyle, personality, interest, and attitude of your customers.
- Behavioral pattern. This is the buying behavior or decision of your customers.
6. Research the demand of your business
In every business, there is a need or demand that needs to be filled. So before you start building your business and spending time and money, you must know if your customers want to purchase your products or avail of your services.
How would you know if your business will sell to people? It should answer these three critical questions.
- What are the problems and needs of my potential customers?
- Does my business help them solve their problems or fill their needs?
- Why would they buy my product or service?
When you have the answers to these three critical questions, you can create value for your product or service, and that will classify your unique selling proposition.
7. Create a business structure and team
If you are operating alone, then this section can be disregarded. However, this section is essential to include in your business plan if your business structure is a partnership or multi-member limited liability company (LLC).
In this section, you only need to cover the following:
- Organizational structure. The hierarchy of individuals in your team.
- Management team. The details and responsibilities of each team member, including the CEO, board of directors, managers, etc.
8. Showcase your service or product line
This part of the business plan should clearly describe the product or service that you will provide–but that’s not all. You should also define and showcase the benefits your customers will be getting with your product–its quality, value, and how it is going to compete in the market.
The service or product line section should include:
- Your product or service description
- What you are offering or planning to offer
- Comparison of your product or service to your competitors
- What you plan to provide for your future products or services
9. Just do it
“Plan your work and work your plan.”
A business plan will not take effect if you do not start working. You have created a business plan, so might as well work according to your plan.