Starting a business is risky. It requires a lot of time, energy, and capital. It’s important to take your time, do your research, and map out what you want to achieve. With a good business plan, you have guidance, direction, and an opportunity to secure investments.
A good, thorough business plan illustrates your vision for the company and what its journey looks like. It outlines your goals and how you will achieve them. Your knowledge, combined with the research you have collected, will help build your plan’s foundation. The structure of your plan can impact how effectively vision is communicated to others.
Survey of the Industry
Unique Product or Service
Plan for Success
Cash Flow Statement
This is where your research comes in. Before beginning any business, you should have a good understanding of what already exists. Find out who your competitors are and what they do well. Then you can identify what makes your business different.
Your business structure influences everything from your day-to-day operations, how much taxes you’ll owe, what legal protections you’ll have, and what benefits you qualify for. To learn more about which business structure you should choose, check out this resource.
Highlight the products or services your business will provide and detail what makes it better than your competition. Ask yourself the following questions: What need does your product or service satisfy in your target market? Will your business be able to maintain a competitive advantage? Other information to include is scheduling, costs, and whether personnel is needed to deliver your product or service. Also, outline any potential risks and how you plan to deal with them.
Starting a business is a considerable risk. Nearly half of all new businesses fail within the first five years. Set yourself up for success by outlining the steps you will take at each stage of growth.
Knowing your customers is the key to a successful business. Understanding who they are and where they are will help you create a strategy to keep them engaged. For instance, if you are selling coffee, you need to figure out who your target market is (I.e., early birds, employed, income over $50K, has children, environmentalist). All this information will help you determine your marketing strategy, your price point, and where to set up shop.
You must do your research on your competition so that you can identify how to stand out. There are two main types of competition: direct and indirect. Direct competitors are in the same industry and offer the same product and service as you. Usually, their target market and price point are similar to yours. Indirect competitors may offer the same product or service but use different strategies to do so. Maybe they sell at a lower price point or market to customers that can afford luxury items.
The marketing strategy details how you will identify and attract customers. Outline how you plan to grow your business; distribute your product or service, and communicate with your target market. For example, you may want to run a TV ad campaign or do social media marketing.
A cash flow statement shows exactly how much cash your business takes in and how much it spends. Usually, it shows any money you receive for your product/service: your revenue. Your statement can also include funds you have available due to credit. A cash flow statement is used to determine how well your business can pay its bills.
An income statement shows your business’s total revenue and total expenses. This statement is used to determine how well the business is doing. For example whether the business makes a good profit or lost a lot of money.
The balance sheet shows the total assets of your business and how those assets are financed. It can also be called a statement of net worth or a statement of financial position. Your balance sheet tells the total value of your business.
Depending on the scope of your business plan, you may want to include other relevant financial ratios. Ratio analysis can mark how your company is performing over time by comparing it to another within the same industry or sector. Ratios offer useful insight into a company to get a better understanding of your business’ financial health.
Overall, your business plan should be roughly 15-20 pages. However, if your business is more complicated or you have more goals, you may need a more comprehensive plan. For example, as a new business, you might need to include research to prove that your idea can succeed. In comparison, established firms with a successful track record might not need to validate their concepts.
If you are unsure of how to move forward, the Small Business Administration is a federal agency that provides free resources to current and aspiring small business owners. Visit www.sba.gov to find out more.
If you’re a current or aspiring business seeking financial investors and support, apply to become a CSD Social Venture Fund partner! SVF invests in and supports innovative companies that place jobs for the deaf at the core of their business model. Questions? Contact us today.