Everything you need to know before you write a business plan
One of the most crucial keys to success for a budding entrepreneur is a comprehensive business plan. It is a tool that can be used to develop a clear vision for the business, define goals, prove the viability of the business for potential challenges, identify strengths and weaknesses, outline the path your business intends to take to make money and grow revenue, and track progress.
Additionally, business plans can be used to secure funding or to form strategic partnerships with other businesses. The plan shows potential investors and partners that you have a clear idea of how to be profitable and give them a return on investment.
A business plan is an essential tool for both start-ups and established businesses. More often than not, the business plan may change over time as the business develops or if the objectives change. A good business plan guides you through each stage of starting and managing your business and serves as a blueprint for your business.
With that being said, before you start developing a business plan, here are a few questions to ask yourself:
- Why am I starting this business? A successful business requires a significant amount of dedication and hard work. By being honest with yourself about why you want to start a business, you can ensure that you are mentally, financially and emotionally prepared for the challenges and sacrifices you may need to make along the way.
- What is the vision or mission for this business? This should be a concise statement that everyone in your business knows by heart. It is a reminder of what you set out to achieve with starting the business.
- Who is my target audience? Is your business a business-to-business (B2B) or business-to-consumer (B2C) business? Are you marketing your offering to other businesses or the general public? Defining your target audience is the first step in understanding what their needs are, as well as what they feel is currently missing in the market.
- Who are my competitors? What currently exists in the market, and how does your offering differ? It is also helpful to be familiar with your competitors as you may be able to learn from their mistakes.
- What are my strengths, weaknesses, opportunities and threats? This is also known as a SWOT analysis. This technique helps assess these 4 aspects of your business and can be used to reduce the chances of failure by understanding what you're lacking and where you may be vulnerable. To get started, check out our SWOT analysis template.
- What products and services am I offering? Ensure you’re able to outline the ins and outs of each product or service that you’re planning to offer. Is your offering innovative, or are there gaps? This question is also a good way to determine how your products and services differ from the competition.
- How much starting capital will I need, and will I need additional funding? Even if you have been saving up to start a business venture, it won’t hurt to do your research on alternative funding opportunities that may be available to you.
- What are my short-term and long-term goals? Beyond simply making a profit, what are some of the smaller goals you have for your business? Is the end goal to become a franchise, or are you simply working towards having one storefront in a popular location? Understand what you want to achieve and map out how to regularly track your progress.
Drafting the perfect business plan can be a daunting task. Our business plan template is here to make things a little bit easier for you. I addition, a self-assessment can be helpful in gauging how prepared you are to start a business.
The above article, resource or tool is intended as general information and doesn’t constitute financial advice. You should take independent financial advice if you have any questions about your specific circumstances.