Many people have dreams of starting their own company. Being a small business owner can be rewarding. But setting yourself up for success before you begin this new and exciting adventure is essential. Many people are so eager to jump into a new lifestyle that they don’t do proper planning. Here’s one thing you should consider doing before starting your small business.
A business plan is a must for every small business
If you hope to take out a small business loan, your lender will likely require a business plan. But even for soon-to-be entrepreneurs who don’t need help with funding, a business plan is a powerful business tool. Anyone who is considering running a small business should have one.
A business plan is a document that outlines your business goals. Drafting this document will give you more time to consider your goals and set expectations. It will guide you through the many stages of your business, including when you first start and as you continue to grow.
What to include in your business plan
Here’s an overview of some of the elements that you should include in your small business plan.
Executive summary
This section will give an overview of your business — think of it as a quick introduction. It should highlight your mission statement, provide information about the company’s ownership structure, and describe the products and services you will offer.
Company description
In this section, you’ll describe your business, what it is, and why you’re creating it. You should also outline who your business will serve and what problems it will solve. Don’t forget to include your official company name.
Market analysis
The market analysis section is where you’ll discuss the details of your target market and explain why they need your products and services. You should also discuss your competition, obstacles you may face when entering your industry, and how you’re prepared to overcome them.
Organization and management
This is where you’ll explain your company’s structure. You should discuss who will be running the business, provide insight into the other people involved in its operations, and explain why each person is a good fit for their role.
Products and services
In this section, outline the products and services your brand will offer. You should also include information about future products and services you hope to provide as your business grows.
Marketing and sales strategy
Next, you’ll describe your marketing and sales strategies and discuss how you plan to promote your company and its offerings. To succeed, you’ll need a solid plan to get the word out about your offerings.
Financial plan
Many small businesses fail because they lack a solid financial plan. Finances are a big part of any business. You want to make sure that you consider the costs associated with running your company and how you will afford to stay afloat.
You should provide insight into your current financial situation and include future projections. If you’re hoping to get help with funding, this is an essential section of your business plan that should be detail-packed.
What could happen if you don’t draft a business plan?
As I mentioned earlier, those who don’t need funding may be able to get away with not developing a business plan. But that’s not recommended. Outlining this critical document can help your business succeed and give you the direction and clarity you need.
Here are some issues that may arise if you don’t create a business plan for your small business:
- You may waste time guessing your way through critical business decisions
- You may struggle to raise funding for your small business endeavors
- You may feel “stuck” and lack direction
- You may not get the results you want
Spending time on this vital document is worthwhile for best success. Check out our small business resources for additional tips to help you navigate your business journey.
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