Launching a small business comes with a flood of advice: register your name, choose a business structure, and secure permits and licences. Essential as these steps are, creating a business plan is the key to starting, growing, and evolving your venture.
Does Your Business Really Need a Business Plan?
A business plan acts as your business’s roadmap, guiding you through problem-solving and crucial decisions related to marketing, competitive strategy, customer understanding, and operational logistics. Below are some of the major reasons to create a business plan.
Establishing and communicating goals
A business plan provides a tangible way to review and set business goals. By putting goals in writing, you are more likely to achieve them and communicate them effectively to employees and investors.
Making strategic decisions
Creating a business plan forces business owners to think strategically about the business. It helps assess the market, understand the business’ competition, and make informed decisions.
Securing funding
A business plan is often required to secure funding from investors or lenders. It demonstrates the business’s potential and helps investors feel confident in their return on investment.
Key Components of a Business Plan
Executive summary
An executive summary should recap all of the material in your business plan. This sets the tone and includes the company description, mission statement, and a concise detail of your plans.
SWOT analysis
This should list down all your business’s strengths (S), weaknesses (W), opportunities (O), and threats (T). For a useful analysis, thoroughly understand your business, industry, and market by researching, consulting with your team, and gathering client input.
Marketing plan
This section provides a comprehensive explanation of your strategy for convincing clients to purchase your product or service. Crucially, you must also clearly articulate the reasons why your offering is superior to those of your competitors.
Leadership plan
Identify the key people needed for business growth, determine the optimal time to bring them on board, and develop effective leadership strategies.
Financial plan
Your financial plan should involve defining financial goals, assessing your current financial situation, and creating a strategy to achieve those goals while also preparing for unexpected financial risks.
Remember, business plans aren’t one-size-fits-all. Choose a format that suits your specific needs, because the most important thing is that the plan works for you.