10 Steps to Starting a Business: Step 1
The Business Plan
I know many of you stumble upon my videos because you are interested in starting a business. Maybe you have a great idea and a great concept for a business, but just aren’t sure where to begin. If you are starting a business but don’t know where to start, start with the business plan.
The first step to starting a business is to draft a business plan. Now, I know that for a lot of business owners and aspiring business owners, making a business plan can be one of the toughest parts of starting a business. It can seem very daunting to have to think about every aspect of this business when maybe all you have so far is just an idea. But this is exactly what the business plan is for; it is meant for those juices to start flowing in your head and to get you thinking about every detail of your business, so when you do start it you know exactly where you are going.
Your business plan does not have to be a static thing; it changes. Your business plan should forecast about 3 to 5 years out, but along the way you may need to make changes and modify that business plan. And that’s okay.
Here are a few of the most important items that you want to put in your business plan:
- The Executive Summary. An executive summary is especially important if you are going to be seeking investors or a business loan to help finance your business. They are going to want to see your business plan and will most likely start or focus on the executive summary. An executive summary should highlight the best ideas and most important aspects of your business. For example, what makes your business unique, why is your business is going to succeed, and obviously a summary of what your business idea is. And it should really be just the most important parts of your business plan, that way if someone has just 30 seconds to read over your business plan, they can scan the executive summary and get the gist of what your business is about.
- The Industry Analysis. This Industry Analysis will show what the market looks like in your business’s industry, who your competitors are and their their strengths and weaknesses, who your target audience is and their demographic, as well as who exactly you are going to be aiming for with your business.
- The Marketing Analysis. Your business plan should also including a Marketing Analysis. The Marketing Analysis should describe how you plan on marketing your business and the types of marketing channels you are going to use, as well as any unique or special ideas you have for marketing your business. Those should all be included in your Marketing Analysis.
- The Operations Plan. Your business plan should also include an Operations Plan, which includes information as to what type of personnel you are planning on hiring and some of the processes you will need to follow in the execution of your business. The Operations Plan is also a good place to include some of the milestones or goals you are hoping to accomplish, i.e., if you want to reach a certain goal milestone by year one or year two, then put that in there because it will help to keep you on track to reaching those milestones.
- The Financial Plan. Finally, you will want to include a Financial Plan that highlights what your budget is going to look like: how much money you are starting with and how much money you think you’ll need just to get the business going. Try to budget out what your business is going to need, make some financial projections for your business, including what you think you can make within a given amount of time and what you expect to bring in and spend. This is also a great place to put some goals if you hope to reach a certain amount of income by a specific date; put those goals in the Financial Plan and that will help pull you towards that goal. Also include information on pricing, i.e., how you are going to price your products or services and how that pricing compares to some of your competitors’ pricing.
The Business Plan is meant to be a road map to help guide you along while you are starting and growing your business. It can be altered and changed as your goals might change, or maybe you try something out with marketing and you find out that doesn’t work… that’s okay! Scrap it and try something else.
There is a lot of information online about how to write a business plan. Free templates and free information are out there if you need assistance writing your business plan.