If you’re starting a business, you’ll need to have a business plan. This is true whether you’re planning to ask for funding or not.
A business plan tells the story of who your company plans to help, where you plan to do it, and how. It’s also a great first step to validating your business idea and clarifying your target market.
The Small Business Administration has outlined many steps for how to write a business plan, but getting started isn’t always so easy. Listed below are three things you need to know to start your business plan this year.
Don’t try to go at it alone
The idea of being “self-made” may sound appealing, but successful entrepreneurs know they need help from others to be successful. And this is definitely true when it comes to creating a business plan.
Enlisting other sources to help you write your business plan will benefit you immensely, primarily from the feedback you will receive. And now there are many free and paid resources that can help you create a good business plan.
For instance, there are now several apps available that will help you create your business plan. The Small Business Administration also offers a free tool that provides a template and gives you step-by-step guidance. There are also business planning resources specifically designed for women, veterans, and Native Americans.
[For a detailed guide, see How to Write a Business Plan.]
Enlisting other sources to help you write your business plan will benefit you immensely, primarily from the feedback you will receive.
Identify market trends
A common trap that many entrepreneurs fall into is starting a business without verifying that there’s a demand for their product or service. Just because you build a product doesn’t mean that consumers will want to buy it. That’s why a good business plan will identify your target market and also point out key market trends.
Questions you may ask yourself include, ‘Maybe there is a demand for my product or service now, but how quickly is that segment growing?’ ‘Am I entering an industry that’s already oversaturated?’
If entering an oversaturated industry, it’ll be harder for you to differentiate your product or service.
This will be the most in-depth section of your business plan and it will take the most research. You can use the following resources to help you:
- Trade journals
- Focus groups
- Competitor research
- Bureau of Labor Statistics
And once you have a website and are regularly producing content, Google Analytics now offers a “new users” segment. This allows you to view your data through the perspective of a first-time visitor.
Consider your audience
When you’re writing a business plan, the most important thing to keep in mind is the audience it’s intended for. This is especially true if you are seeking small business funding.
When lenders are considering your business plan, they are looking for a few specific things:
- Your financial projections
- The products or services offered
- Your marketing plan
- The number of employees
- Your business’s collateral and other assets
Fortunately, recent trends seem to indicate that it’s becoming easier for small businesses to get funding. In March 2019, the number of small business loans given out by large banks hit an all-time high of 27.3%.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
