Thinking of starting a business or are you already in business? Learn how to develop a business plan in the following easy steps.
Why Creating a Business Plan is Important
Creating a business plan is the foundation of your business and is important to your success. It not only helps you think through all you need to consider when starting a business, but it helps explain your business idea to others. Creating a business plan will help you:
- Identify how much start up and working capital is needed to start and operate a business in the early stages until you make a profit
- Point out the areas of business management where you’ll need assistance
- Demonstrate to potential investors and lenders you’ve considered everything
- Attract potential employees, vendors, and advisors
- Get a better understanding of your competition, the needs of your target market, and your strategy for reaching them
Creating a business plan does not have to be a difficult and time-consuming endeavor. Oftentimes people will start a business, experiment with different strategies, then have a better understanding of how to lay out a plan. The information for creating a business plan may be already in your head. By writing down your business plan, your strategy for your business will become clearer to you and those who want to help you succeed.
When Do You Need a Business Plan?
Besides the obvious need for a plan to help you think through all aspects of your new business, you’ll need a business plan throughout your business life. A business plan will come in handy when you:
- Want to encourage family and friends to invest in and patronize your business. It will show you’re serious and dedicated to being successful
- Expand your relationship with your banker. You’ll need a business bank account and perhaps a line of credit. A business plan will be the first thing your banker asks for.
- Expand your business with additional employees, space, inventory, and equipment. Attracting vendors and staff means showing them you’ve crunched the numbers and their trust in you is well placed.
- Deciding whether to add new products, fine tune your marketing, expand to another location, and delegate your workload so you’re being as efficient as possible
What is included in a Business Plan?
To create a business plan, your plan should include:
- A description of your business products or services, and how these differ from what is offered by your competition
- An analysis of your competition and competing circumstances including an understanding of any outside influences that could affect your ability to be profitable
- An evaluation of your one-time start-up costs, your fixed overhead, and a projection of when you’ll break even and start making a profit
- A breakdown of your pricing that demonstrates you’ve covered your direct costs, your overhead, and your goals for profitability
- An operations plan that describes what you’ll need to get your products or services to market such as staffing, location, equipment, inventory, and transportation
- Your marketing strategy such as direct mail, signage, social media, and special offers
Creating a business plan is not an exercise for only a new business and once created, it’s not set in stone. Revisit your plan at least once a year and update it with any changes you’ve noticed regarding issues such as your customer needs, the competition, and whether your pricing needs adjusting.
Now that you are fully aware of what is needed to assemble a terrific business plan, let’s get you the help you need to put it together. The Microenterprise Collaborative offers a Small Business Assistance Tool to help you find a counselor or a workshop to help you with business planning. Access the tool here >>
To access a number of business plan templates and other business planning resources, log onto the business plan page of the Inland Empire Small Business Development Center:
SBDC Business Planning Resources
Additional Business Plan templates can be found here:
SCORE Business Plan Template for Startup Businesses
SBA Write Your Business Plan Guide
Don’t Go It Alone
Starting and growing a business can feel like a solo endeavor and a lot of responsibility. But there’s no reason why you need to feel like creating a business plan is all on your shoulders. Some business owners don’t seek the advice of counselors because they don’t want someone telling them their idea isn’t viable or they’re worried someone will steal their business idea. Please know the small business counselors working for the agencies you’ll find in the Small Business Assistance Tool are professional and come with years of business experience. They are there to help your dream of starting a business become a reality. Stay connected to other programs and opportunities for gaining skills for your startup by signing up for the informative newsletter. You are becoming part of a larger community of business owners in Inland Southern California. Find the support you need to be successful in the long run.