How To Write A Business Plan For Your Small Business

Competition in most domains and industries is fierce, even moreso for small businesses and startup companies. A business plan is the blueprint for your entire business model, and can help your small business identify the critical factors that will lead to long-term success. A strategic business plan outlines the company's financial statements, targets customers, highlights key marketing efforts, and provides relevant industry information. It can serve as the pivotal presentation when looking for financing or convincing investors to take part in the business's future. A well-written business plan can help persuade the right people to join in the venture, and will also provide a framework for the core objectives as the company launches and grows.

Finding a way to measure success is difficult for most enterprises, but a small business that can continually analyze and review its performance accurately will have a stronger chance of success. This begins with the ability to forecast and set realistic goals, as well as creating an effective reporting system. All of these items will be a part of the business plan, even before operations have begun. Forecasting will become a part of the executive summary, the first page of the business plan. Goals, financial statements, reviews of the industry, marketing objectives, and a final mission statement are the other key areas. Here are ten steps to writing an effective business plan for your small business:

Step 1: Defining A Clear and Concise Executive Summary. This is essentially a conclusion or briefing of the entire business plan. It highlights the main proposals and statements of the company, and should be readily available for potential customers, as well as lenders or investors.

Step 2: Presenting an About the Company section. This statement clearly defines the owners, business partners, and employees of the business This will also be the place to explain where the vision or mission statement was developed, and what it is.

Step 3: Presenting Company Goals. A few paragraphs in this section will define the key services or products of the company, and how these will benefit the primary customer segment. This section may also highlight the company's growth potential.

Step 4: Identifying Employees, Management, and Owners. This is an in-depth summary of Step 2, and will identify each key member of the business as it starts. This will include names, backgrounds, experience, and other relevant information that identifies who the company's managers and leaders are. This section may also include job roles and responsibilities.

Step 5: Identifying Core Products and Services, and highlighting the Unique Selling Proposition. The USP is often the hardest part of the business plan, but this can help with a variety of marketing efforts and goal-setting endeavors. Identifying core products and services should include all initial inventory, projections of growth, and long-term investments.

Step 6: Outlining Market Potential. This is the area where any demographic information about your customers, survey results, or market research reports can be added for reference. These serve as the key indicators for market potential in the small business's domain, and can provide valuable insight when developing the right marketing approach.

Step 7: Clarifying the Marketing Strategy. This is where you will outline exactly how the business will reach its target customers, and where marketing dollars will be spent. Making this portion as realistic and accurate as possible will help create a comprehensive, cohesive marketing plan that can work in both the short and long-term.

Step 8: Establishing Financial Projections. It may be helpful to hire an accountant or financial advisor for this section of the business plan, as they can help plot the balance sheets, income projections, and periodical forecasts for the future. Some software and statistical packages can help you do this on your own, but if you don't have basic accounting skills, this can be very intimidating. Financial projections will help you create a predictive model to set some clear, realistic goals and outlines for each year of operation.

Step 9: Appreciating the ‘Worst-Case Scenario' section. This is an often-overlooked section of most business plans, but is vital for understanding the business and its future. Every business has a chance at success; but it also must think about what will happen in case of failure. This section can outline the specific points or stages in the life cycle where there will be no further growth. As hard as it is to think about, it's important to factor in key indicators of failure in case it's time to shut down the business and move on.

Step 10: Finishing with the Closure and Mission Statement. This section can summarize the key points and goals of the business, and finish with the business mission statement. The mission or purpose statement should be a short, 2-3 line definition of the business's core message and ideals. It can be as poetic or simplistic as necessary, and can be associated itht eh company's brand or image.