After finding your one million dollar idea, one of the most powerful ways to finally start a business that will lead you to actualize your dreams, reach your potentials and find fulfillment is to start by learning how to write a business plan for a small business.
A well written business plan does not merely help you to find your path to success; it provides the needed roadmap to follow thus making your journey smoother, more predictable and easier to navigate.
Considering that majority of entrepreneurs with big ideas are still struggling with ideas on how to evolve a workable plan for their businesses, in this guide, I’ll walk you through the step by step guide to create a realistic business plan that will deliver the much needed success for your small business.
Why Do You Need a Business Plan?
Before we proceed, let’s clarify the role of a small business plan. Specifically, a business plan is not merely a document for investors, loans or fund raising. It’s a tool meant to guide your business success. Here’s how:
- Offers Clarity: A business plan gets you to clarify what matters most to your business. for example, it clearly outlines your business idea as well as goals, and strategies.
- Optimizes Focus: By defining your mission, vision and values, your business plan helps keep you on track.
- Improves Funding Chances: Be it for lenders or investors, your plan is an important document that must be provided before you can access funding. Getting it right improves your chances.
- Enhances Prompt Decision-Making: As a working business document, it provides a solid reference point for making crucial decisions.
Now that you know why you need a small business plan, in the following paragraphs, we’ll discuss the steps you can take to write a business plan for a small business.
Table of Contents
The first part of a business plan is the executive summary. It is a concise summary or overview of your business. One of the key things to include as part of executive summary when you write a business plan for a small business is the name of the business, its mission, vision statement and a summary description of the products or services.
As you write your executive summary, keep in mind that this is like a summarized version of the business plan itself. It is a key aspect of the entire document and the way you put it together can determine whether a potential investor will read past that section or not.
So as much as possible, keep it simple, straight to the point and captivating.
Your business description is a summary of what your business does its main purpose and direction as well as the unique value proposition that differentiates it from other businesses. It comes immediately after the executive summary.
In this section, you want to give more details about your business. Start with outlining your company’s history, how or why it was formed, the company structure as well as its objectives, values, mission etc.
To create a strong impression when you write a business plan for a small business, include in your business description, aspects of the business that makes it stand out and different from the competition or other businesses in the industry.
Furthermore, to make your business description stand out, you can also outline what drives you, the passion behind the idea and the very things you plan to achieve or change as a business.
PS: This is where you can get to inspire your reader (investor or lender as the case may be) and find ways to get a buy in.
You can’t create a business plan without conducting a market research. Specifically, you want to identify your key target audience, their location, their tastes and preferences in relation to your product or services as well as their strength and weaknesses.
This will aid you in positioning your business to be able to create a solution that’s not just appealing but custom made for this specific audience.
Remember, you can’t successfully write a business plan for a small business without analyzing your competitors. Your analysis of their pricing, service delivery and other aspects of market realities are core part of what should boost the need for the new solution you’re offering.
Products and Services
What’s your offer? What are the product or services you’ll be offering clients as a business? this forms the next part of your business plan.
In this section, outline the product or services you’re offering and then go ahead and describe in details, their features and benefits.
As part of your key strategy to further justify the need for the business when you write a business plan for a small business, identify the major variables that set your products or services apart from others in your industry.
Sales & Marketing Strategies
Every business exists to attract customers. In this section, identify the key strategies you will use in getting visibility, reaching new leads and actually converting them to paying customers.
Specifically, outline clearly how you plan to market your product or services, the preferred marketing channels as well as your pricing strategy.
Additionally, one of the important steps to write a business plan for a small business is to include a realistic marketing strategy that will evolve based on market realities.
So, you want to keep your sales strategy flexible and easily adaptable to prevailing market realities, customer tastes and preferences as well as market trends and economic leanings.
Business Organization & Management
This section introduces the people behind your business, their role, and qualification and possibly, why they can be trusted to run the business successfully.
To successfully write a business plan for a small business, outline the structure of your business, key roles and responsibilities, indicating clearly how these responsibilities are divided and how each section will lead the team to achieve the overall goal of the business.
Financial projections are part of what will cover your expenses, income and possibly profits. This section also forms part of your forecast as regarding your financial performance.
One of the ways to realistically write a business plan for a small business is to map out clear financial forecast for all your activities over a certain period of time.
Create income statements based on your market research, target market and pricing strategy. Evolve your revenue projection and break even analysis and find ways to include your projected income over a certain period.
PS: A realistic financial projection is a great way to demonstrate a business’ sustainability. Getting this right could be a very decisive factor as regards whether or not an investor or lender will be impressed.
Although all business plans are not meant for fund raising, it’s out of place to write a business plan for a small business without including a funding requirement.
Whether or not your business plan is entirely written for funding, you have to outline the funding requirement. Include the steps you plan to raise funds for the business, ways you intend to utilize the funds raised and how you plan to return the funding.
As part of the funding requirement, outside your repayment plan, outline the potential returns on investment for your investors whether it be equity or financial gains, be categorical.
While an appendix may not be entirely necessary, while writing a business plan for a small business, you can use this section to make an even stronger case for your plan.
Use this section to include any supporting information you might want to add to the plan. For example, a research data, team member’s resume, product catalogue etc.
Like millions of other successful entrepreneurs, starting your own business could be an exciting journey that will finally lead you to actualize your dreams, reach your potentials and find fulfillment but, you need a robust plan as a foundation to achieve this.
But even after writing a plan, you have to keep in mind that no business plan is cut in stone. At interval, revisit your business plan to re-strategize, map out areas that are not working any more as well as recalibrate the success of the plan in delivering on your outcomes.
Additionally, as a small business, instead of working on creating an unrealistic business plan for the sake of having one, make effort to put together an easy to use and flexible document that will guide your business as you build the success it deserves.
And of course while building on marketing strategies for your business plan, keep in mind we are at your service to create robust digital solutions that will deliver your business growth outcomes as well as build websites that will connect you with your target audience. Reach out to us here.
Now, it’s your turn! What’s your biggest challenge when it comes to writing a business plan for a small business? Drop your comments below.