Most soloprenuers don’t NEED a business plan. However, I think it is a good idea to have things mapped out. A business plan is like a road map. What is your business purpose? Who do you want to serve? Who are your competitors? How will you market your business? How much profit would you like to make your first year? These are the questions a business plan can answer.
A business plan is a type of work plan for an organization that outlines its vision, mission, goals, and strategies to achieve them. It helps organizations understand the basic financial needs and resources needed to implement their plan. Business plans are also used to justify and obtain financing for the business project. A business plan is typically a written document that has been prepared by an experienced person or company in order to help a company or organization start, manage, grow, and/or close.
You most likely WILL need a business plan if you plan on getting a loan from a bank or if you need business investors. If you aren’t a soloprenuer and have a business partner, it’s probably a good idea to have a plan.
It’s not hard to create a business plan. You can keep it simple. Here is a simple business plan template.
What to Include in Your Business Plan:
Mission Statement: A brief statement of what your business seeks to accomplish
Company Information: Founding date, names/roles of founders, number of employees, number of locations
Company Highlights: Growth highlights of the company (financial or other) and hard numbers and charts
Product/Service: Short description of what you sell and who you sell to
Financial Information: Financing goals and any current sources of funding
Future Plans: Quick glimpse of where you’re headed (expansion, new products)
Industry: A quick description of the industry you’re in
Target Market: Your primary customer base
Competitive Advantages: Describe any competitive advantages you may have, such as expertise or location.
Industry Information: Size of industry, past growth, projected future growth, current trends
Competitors: Top competitors, strengths and weaknesses, total market share
Target Market: Specific customers you are targeting (current needs and existing solutions, demographic information)
Target Market Size: Amount target market spends, frequency and timing of purchases
Organization and Management
Key Stakeholders: Who are the key stakeholders in the business, and how do they relate to one another (include organizational chart)?
Legal Structure: Describe whether your company is an LLC, S-Corp, C-Corp, or other legal entity.
Employee Background: Background information about key stakeholders that demonstrates expertise/value
Key Hires: List any key hires that you will need to make to succeed.
Market Share Potential: Amount of market share you believe you can acquire
Barriers To Entry: Things that would make it difficult to succeed, such as strict regulations or high tech costs
Products and Services
Description of Product/Service: A clear description of what your product/service is
Benefits: A thorough description of how your product benefits customers and stands apart from the competition
Pricing Structure: Explanation of how you will price your product
Proprietary Information: Any intellectual property, patents, or proprietary information you possess that will contribute to your success
Supply Chain: Suppliers/vendors you rely upon, along with key information like how often you receive supplies and the method by which you receive them
Marketing and Sales
Positioning: How you will position yourself relative to your competitors (lower cost, superior quality, superior service)
Promotional Methods: Specific tactics you’ll use to spread the word about your product or service
Success Metrics: How you will evaluate the results of your marketing efforts
Sales Strategy: Method(s) you will use to sell to customers (cold calling, in-person meetings, other strategies)
Sales Team: Description of who will be selling to customers
Budget: Amount of money to be spent on marketing and sales efforts
Current Financial Status: Income statements, balance sheets, cash flow statements, debt documentation, and other pertinent details
12-Month Financial Projection: Projected sales, cost of goods sold, profit, expenses, net operating income
Cash Flow Projection: Projection of how much cash you’ll have on hand at given points over the next 12 months
Projected Balance Sheet: Projected balance sheet in 12 months
Break-even Calculation: Projection of how much sales volume you’ll need to cover costs
Request Details: Type of funding you are requesting along with the amount of funding and terms
Use of Funds: How you will be using the funding (inventory, payroll, other)
Future Plans: How and when you will repay the investment, any plans to sell the business
You might not need all this in your business plan, but this is a good start!