Creating a Small Business Plan
Items to Include in Small Business Plan
Starting a small business is a dream many people share. It frees them from the constraints of the daily grind of a 9-5 job that they hate and it gives them the freedom to go to work daily doing something they love. However, many small business never fully get off the ground or reach their full potential; leaving owners to unfortunately throw in the towel. But, it does not have to end that way with proper planning.
The first step in building a successful small business is creating a business plan. It is the most important part of the startup, however it is one that many people avoid. Yes, it's not fun and it can be very time-consuming and most people want to jump right in. But a business plan serves many important purposes. It helps you clearly define what your business is and what you want to focus on. It also keeps you accountable and on track by listing the goals you want to accomplish within your business and how you will get there.
There is some confusion among people who believe business plans have to be very complicated, long and extremely detailed, which is not always the case. Again, this all depends on the scope and goals of your business and can be tailored to fit your needs. But, the more risk you plan on putting into this business (such as if you plan to quit your job and need upfront financing), the more detailed you will need to be with your plan.
What to Include in Your Business Plan
- Title page: This page should include the name of your business, address, telephone number and date
- Table of Contents: Even if your business plan is small, you should include this page.
- Introduction: In this section, you will give a brief summary of what will be included in your business plan. Think of it as a way of setting up what is to come in the next few pages. It will also include your reason behind your business plan and what your business will do, how it will run and how you plan to make money. Even if you don't need any start-up funds, this is important if you ever want or need an investor. They will want to know how this will be profitable before they sign on.
- History of the Company: I know that your probably thinking, I am just starting a business, but its a great way to look back in a few years and see where you started and how far you've come. It also appeals to potential investors if you need them down the line. Include when you founded your business, the type of business, where it will located and finally what your overall goals for your company are. It is basically a short summary of what you previously covered but it is laid out in a way that it is easy to look over and grasp the concept.
- Products/Services: Here you will describe what products/services you plan to sell at your business. You need to also include why any potential customers would want to pay for your services or products.
- How you will sell your products/services: Here you need to think about marketing and the real expenses in selling your product. If you spend all that you make on any of the above, your business will not ever make any money.
- Market: Now that we have discussed your products/services and why people would want them, you need to discuss who you plan to market to. Explain who your potential customers are: their ages, gender, location, or any other description of who will be interested in your products. You also need to estimate how many customer you plan to get that will want to use your business. This section should also cover who you are in competition with. How are your products/services better than theirs to where customers will choose you? How is what you offer different? Here is where you need to do a lot of research because it is important to keep an eye on market trends because it can greatly have an impact (negative or positive) on your market and its success.
- Operational Plan: How will you get the products you plan to sell? Will you make them yourself (or offer them if you sell a service) or will you need to acquire them or hire on extra help? If you have a clever idea, how will you protect it? Finally, how do you plan on delivering your products/services? Will it be through a building, website or both?
- Business Structure: This is where you need to identify which type of business you are and how it will run. Some of types of business structures are: S Corporations, Regular Corporations, partnerships, LLC, etc. Again, research is important in this area because will greatly impact the legal aspect of your business.
- Financial Plan: This is probably the most dreaded part of the business plan. Here you will need to cover your projected sales, cost estimates, sales, and how you plan to pay for all of your operational costs. Also include past and projected cash flow statements, balance sheets, income statements, and any other type of financial aspect of your business.
That covers the basic summary of what you should include in your business plan. Start off small and take frequent breaks so that you do not get overwhelmed. Do a rough draft and don't do each section on the same day, otherwise you may burn out and nothing will come from it. There is also nothing wrong with asking questions to people who have done a business plan before. Ask your banker, consult with government websites or your tax professional. It sounds like a look of time and effort, but trust me when I say, you will be happy in the end.