Tuesday, July 2, 2013

How To Write A Business Plan

When starting your own business, it is essential that you have a business plan. You wouldn't start on a trip without a map, would you? Why would you want to start a business without some idea of where you are going?

There are different ways to create your plan. There are several business plan software packages available to help you with the process. I have never used any of them, so I cannot recommend one in particular. I am more comfortable just creating my plan myself. If that interests you, then read on to see how I do it.

There is a suggested order to your business plan elements and I encourage you to learn it. If you ever decide to look for outside financing or a business partner, they will expect to see all of these elements. For my own use, I am not quite as formal. I will teach you everything, though, so you can get familiar with it.

The first part of your plan should always be an "Executive Summary". This is the who, what, when, where, and how of your marketing strategy. Although it is the first part of your written plan, it is typically created last, after all of your marketing analysis has been completed.

Yes, I said marketing analysis. You will need some information about your industry and your competitors before you launch your business. This should be the second part of your business plan. You will want to research the strengths and weaknesses of your industry as a whole, plus your competitors. You need to find out as much as you can about them. Trust me - if they are successful in the business, they know all about you!

The third part of your business plan should focus on your products or services and your target markets. Information such as target market demographics, industry trends, societal/cultural trends, and the needs/wants of your target market go here. If you don't know how or don't have the time to do this yourself, you can purchase the information. Again, I have never done so. My husband loves spending countless hours on the internet researching this stuff for me, and he works cheap so I let him do it!

Next you will want to outline your actual marketing strategy. How will you get the word out to your target markets? What promotional activities will you use? What type of marketing programs? Will you be strictly online or will you use some offline marketing? What pricing strategies will you use for each of your products/services? State your overall marketing objective and then describe how you are going to get there.

You will also need to describe how you are going to measure whether your strategies are succeeding. Most formal business plans include this information in a separate section. Since no one sees my business plan except me and my husband, I just include it with the information above. But you do want to describe how you will monitor your progress and make adjustments if necessary.

The last part of your business plan is your forecast. This is where you will forecast your growth and financial analyses. Information to include: What does it cost to produce your product/service (including all overhead costs and other expenses)? How many of each product/service will you need to sell to make a profit? How long will it take to make a profit? What will you do if you don't sell enough? What will you do if you sell more than expected?

A business plan is essential for business success.  It's the road map that helps you get where you want to be.  It generally project 3-5 years ahead and outlines the steps you plan to take to build your business.  Follow the outline above, hire someone to help you, use an online template or a software package, check out the suggestions on the website - do whatever you need to.  But before you do anything else with your business, write your business plan.

No comments: