If you are embarking on the journey of starting a small business, you are in for what might be one of the most exciting (and overwhelming) experiences of your entire life! At first, you will likely feel as though there is no shortage to the number of steps you should take — it can be impossible to know where to start or what is truly a priority.
What can prevent a lot of the overwhelm and confusion that often occurs in the initial start-up stage is having a clear and focused business plan. Your business plan will be a critical component in getting your business up and running, and something you refer back to and update frequently throughout your first year or even few years of business.
Today on the blog, we’ll be breaking down what a business plan is, why you need one, and how to create one. Let’s dive in!
What is a business plan?
A business plan is a documented strategy that highlights your business’s goals and how you plan to achieve them. While business plans are rarely identical in format or structure, a strong plan will typically include the following:
- Key business details (registration, contact, etc)
- Your business vision, mission, and core values
- Key team members in the business
- Product & operations details
- Assets details
- Market plan & analysis
- Pricing details
- Risk management details
- Financial forecast
Why do you need a business plan?
I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work…” or “I’m not really a planner — can’t I just wing it?”
The answer is yes, you really do need a business plan and no, you can’t just wing it! Though it may sound tedious and time-consuming, drafting a business plan is going to set your business up for success and serve as a roadmap that you can return back to whenever you need a reminder of what you need to be doing to reach your goals.
There are countless reasons why you need a business plan. Let’s go over the top 6:
A business plan legitimises your idea.
There’s a difference between a business idea that you daydream while grocery shopping and an actual, feasible business idea that you’ve put real thought into and feel has the potential to succeed amongst a specific market. Your business plan will help you determine if your idea falls into the latter category — after hours of documenting thinking of the business idea, fleshing out growth tactics, and calculating financial projections, you’ll soon realise whether or not it’s truly possible.
A business plan documents your business goals — and explains how you’ll achieve them.
Writing a business plan allows you to lay out significant goals for yourself ahead of time and document the steps your business will have to take in order to reach those goals. To demonstrate that you’ve addressed every question and thought through every possible scenario, you should clearly outline the marketing, sales, and operations strategies you plan to use to achieve success.
A business plan helps with critical decision-making.
As a business owner, you will be faced with difficult decisions time and time again. Sometimes, sitting down and weighing the pros and cons and potential ramifications of any given decision is simply not possible. This is where your business plan comes in — when you are forced to think about the most major components of your business before you get started, like your marketing strategy or product operations, a lot of tough decisions become pre-determined so that you don’t need to worry about them later on.
A business plan allows you to avoid potential mistakes.
I’ve reminded you of the alarming statistics surrounding the success rate of new businesses in the past, and while I’m not here to keep drilling it into your head, there’s no denying facts: most small businesses do end up failing within just a few years due to avoidable mistakes, such as…
- Lack of capital
- Lack of market impact or need
- Unresearched pricing (too high or low)
- Explosive growth that drains all your capital
- Stiff competition
The exercise of creating a business plan can help you circumvent falling into a similar trap by spotting critical gaps and pitfalls like the ones outlined above before they turn into big problems.
A business plan can help you secure financing from investors.
Did you know you’re 2.5x more likely to get funded if you have a business plan? Your documented business plan is your way of showing potential investors or lenders how their capital will be put to work and how it will help your business thrive. It is standard practice for banks, investors, and venture capital firms to ask for a business plan before handing over any money — so if you seek external funding, a business plan isn’t optional!
Having a comprehensive knowledge of your own business is obviously important, but what you may not know is that it’s equally important to understand the rest of the market as well — AKA others in your industry who are targeting a similar audience with a similar solution. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in so that you know what you need to do to stand out as the go-to option in your niche.
At the end of the day, the purpose of a business plan is simple: to explain your business idea and why it will be successful while outlining how you plan to achieve your goals. And now that you know why you need one (and yes, it is a need), it’s time to move forward with confidently creating your own business plan!
The OJC Downloadable Business Plan
Look, I’m going to be honest with you. As a business and marketing consultant, I’ve helped dozens of brands create their own business plans. It is a time-consuming process to start from scratch, and the last thing I want is for you to get hung up on the “nitty gritty” of what exactly to include and how to plan it all out.
This is the exact reason why I spent months of time creating, researching, + refining a Downloadable Business Plan that you can customise to your own business in just an hour or two!
I wanted to nail down a surefire way to make the process go from painful to painless while still documenting everything you need to know about your business in your plan. And let me tell you…we CRACKED THE CODE with this simple, fill-in-the-blank document that ALL new business owners will gain value from if they’ve yet to create a plan for their business.
You can purchase the Downloadable Business Plan here for just $47. This is one of those no-brainer business purchases that will serve you for years to come! I can’t wait to hear what you think.