How to Create a Successful Business Plan

When I started my business, I didn’t even consider it a business. All I knew is that I needed to pay rent and eat, and writing helped me do that. As matters progressed, however, I realized that I had a business — and that a plan might be a good idea.

In my case, putting together a business plan was more about setting goals, and creating timelines for completing specific tasks, and figuring out when to buy new equipment for my home office. For many entrepreneurs, though, creating a business plan is a more involved process.

1. Know Your Business

Your first step is to do the preliminaries. What do you know about your business? What’s the competition like? What do you have to offer that others don’t? Learn more about the industry you plan to enter, and take the time to think about what you want your business to accomplish. This includes figuring out your target audience, and determining how you can provide what your audience wants.

2. Acknowledge Why You are Creating the Plan

Next, you need to figure out why you are creating a business plan. I created my business plan largely for myself, so it could serve as a roadmap. The business plan I wrote for my own edification is different from what I would write if I needed to line up small business financing, or attract investors.

Once you know what your business plan needs to accomplish, you can begin creating a plan that will help you reach your goal — while at the same time helping you identify a direction for your plan.

3. Know What to Include in a Business Plan

Now, you are ready to get started. When you present your plan to investors or lenders, you need to have a good idea of what they expect to see. You will attract more investors or lenders if they can see that you understand the process, and if you can show them what they expect to see. Your plan should include the following sections:

  • Mission Statement: This is a brief overview of the guiding principles of your company, and what you hope to accomplish with your business.
  • Executive Summary: This is a brief summary of the business and its owners, and mentions the industry and target market. Even though the executive summary is located near the front of the plan, you should wait and create this portion; it acts as a summary of the business plan.
  • Product/Service: Share what you plan to offer, and how it works.
  • Target Market: Analyze your target market. Your backers will want to know the population segment you are trying to reach.
  • Marketing Plan: You should have a pretty good idea of the marketing tactics you will employ to reach your target audience and increase sales. Detail your marketing plans so that your backers know that you have put thought into how you will sell your products or services.
  • Industry Analysis: Indicate that you know the state of your industry, as well as your major competitors. Analyze the industry and sector, as well as your competitors, and define how what you offer is different in the space.
  • Financials: Show how you plan to finance the business. You should share personal financial statements for each of the principals, a balance sheet, income statement, and cash flow statement. If you are starting up, most backers know that you are probably financing the effort yourself for now.
  • Staff: Share information about company principals, and other key staff. Resumes and experience are important.
  • What Financing You Want: This is where you detail what you want, whether it’s investment or a loan. Identify how much money you want, and what you plan to use it for.
  • Appendix: Supporting documentation and other information should be included here. This includes lease agreements, marketing research, insurance policies, tax returns, and other items that can back up the claims you make in your business plan.

Even if you aren’t trying to raise funding, going through the steps of putting together a business plan can be helpful, since it forces you to really think about your business, and what you hope to accomplish.

Comments

  1. says

    Miranda – Excellent tips for anyone looking to create a business plan. I would also add that the planning is more important than the end plan. When you are working on creating the plan is when you come across and realize number of issues and come up with ideas that you would not otherwise. Of course knowing your business and industry inside out as you mentioned in #1 is of paramount importance.

  2. says

    Hi Miranda,
    You wrote that the key to creating a successful business plan is to acknowledge why you are creating it in the first place. So true! So many guides for creating business plans take a one-size-fits-all approach, but of course a lot depends upon your business goals. Think about these and design your plan accordingly. Thanks so much for sharing this post with the BizSugar community!

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