December is National Write a Business Plan month
Writing a business plan is an essential step in getting your small business off the ground, especially if you plan to apply for a loan or pitch to investors. The idea of creating a business plan can be daunting; however, writing it doesn't have to be difficult if you are clear about what you need to include.
Your business plan is the best way to communicate basic information about your endeavor. It should include what products and/or services you offer, your target market, your goals for the first few years of the business, and how you plan to accomplish those goals.
A traditional business plan tends to be quite involved and require extensive research. Depending on who your audience is and what the purpose of drafting your business plan is, you may have the option to put together a business plan that is only one page.
A traditional business plan usually consists of:
- Executive summary-A general description of your business.
- Company description-Describes the business's location and size, your vision, and your goals.
- Service or product-A detailed description of exactly what you'll be providing customers.
- Market analysis-An overview of your industry, and details about your target market and the competition you face.
- Marketing strategy-Includes how you'll price and promote your products or services, and an outline of how your business fits into the current market.
- Management summary-Discusses your business's structure and who is involved.
- Financial analysis-Financing details, an operating expense estimate, and an idea of what will be needed for future growth.
A one-page business plan is a streamlined version of the traditional format. You will still need to do research and include most of the same information, but that information will be pared down to a few pithy sentences for each section, won't need to include any charts, graphs, or fancy projections and can be used as a starting point for the creation of a more detailed plan in the future. When creating a one-page plan, consider answering these essential questions:
- What is your business's mission?
- What is your strategy to meet your goals?
- How much start-up capital do you need, and how much do you already have?
- What are your anticipated expenses?
- How much income do you expect to generate monthly, and over the next six months, one year, and three years?
- What specific actions do you need to perform and when? What objectives will you need to accomplish, and by when will you need to accomplish them?
When writing your business plan, avoid the temptation to over-promise and over-estimate what your income will be. This type of puffery could work against you, especially if you are attempting to get a loan from a traditional bank or an alternative lender. In addition, don't forget basic Writing 101 rules; spelling and grammar errors will not help you to look like a competent professional. If you are not certain you can catch mistakes yourself, it is worth it to hire a professional copy editor to proofread your work.
If you are ready to get serious about your business, don't wait another minute to get started. Good luck!
The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or professional advice. You should seek the advice of a professional advisor and/or legal counsel to address your specific needs regarding the issues related to your situation. Popular Bank does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.