Write A Business Plan In 6 Easy Steps.
Have you written your business plan yet? I know... you keep putting it off because you're too busy. Besides, you really don't know how to write one anyway, right?
Most people are so busy with the details of starting their business that they put off writing their business plan until later. Well, that's a big mistake! You wouldn't start a road trip without a map, would you? Don't start your business without a plan for success.
I took a year-long class about planning your small business start-up. We wrote beautiful, comprehensive, HUGE plans. It only took us a few months. Well, in business, a few months is a life-time!
That complicated business plan was probably overkill for most small businesses. (That's business blasphemy, right? Sorry.) I'm not saying not to plan... but to be realistic and "get 'er done."
What most entrepreneurs need is a quick and easy way to write their plan in a couple of weeks... or even a few days! But how would you do that?
Well, when I was in grade school, we were taught to use the words who, where, what, when, why, and how as prompts for journalism and other kinds of writing. I don't know if this is still taught at school, but I've always used that basic idea as a way to organize my thoughts. And they're a great way to build a simple business plan!
This simple business plan isn't what you'll need to get a business loan, but it will help you collect your thoughts. And it will help you make plans that make sense.
By writing a business plannow you'll get your business off to a good start. So get out your pen and paper, or open your writing program on your computer, and lets get started.
"Why" is the word I start off with first. A business plan helps clarify your intentions by asking you "why?" For example, why do you want to start a business?
- Do you need a job for full-time income?
- Are you looking for a little extra spending money or LOTS of money?
- Are you passionate about something that you want to create work with?
Whatever your goal is, that's your 'why'. Write it down in this section of your business plan, and think about it.
Starting a business can be a simple thing, but you should be clear about your goals now before investing your time and money. A good 'why' in your business plan now can even be turned into your mission statement later. You may find that your dreams, goals or passions change, but you should begin now with a definite goal.
This is a good time to mention this... if your 'why' isn't strong enough, you probably won't bother answering the rest of the questions. And unless you're very lucky, your business may not thrive or survive.
"What" is next. No, that sentence doesn't sound right to me either! There's a few "what questions for you in this section.
- What kind of business will you run... is it wholesale or retail? Are you selling goods? Is it a service-based business? If you're selling some "thing", where will you get it? Do you make something yourself? Buy it wholesale to re-sell it? If you want to run a service-based business, what are you selling? Do you need to be licensed? Hopefully your business is something you are skilled at and want to to do yourself. See 'who' below.
- What will you call your business? You'll need a legal name that belongs only to you. On the state or local level, that's called your DBA or "doing business as". If you plan to do your business online, you want to register a domain name too.
- What kind of business will you be for tax purposes? Sole proprietor, some kind of corporation, a partnership? Do your research now. You may want to talk to your lawyer or accountant now.
"When" do you plan to start or open your business? That's pretty easy. The answer is usually "as soon as possible"! The only other "when" I could think of is the hours you're open to the public if you're a retail business. That leads directly into the next section of your business plan...
"Who?" Actually, this section asks three "who" questions...
- Who is your customer? Do a little demographic research now. What's that? Demographics just means the study of people. That's what the US census is for. Every 10 years the government in the US does a study to find out about who the US citizen is. Those answers are totaled and interpreted, and the results are available to the public. This is the part of your business plan when you decide who your customer is likely to be, and how you will market/advertise to them.
- Who will do the work? You'll do it yourself? I'll assume you have the skills or you wouldn't be choosing this kind of work. Who will help you if you need help? Employees add an extra layer of paperwork to the business owner. That can be a burden in both extra time and money. And the consequences of doing it wrong are massive! Think this through really carefully now.
- Who is your competition. Online or off, you will have competition. Your competitors need to be identified now. You'll want to study them to see what they are doing well, and what you can do better. Do it now... don't be surprised later. That's what the business plan is for... to eliminate surprises.
"Where" will you be located? Will you work at home or from home? Will you have a home office but do the actual work in different location? Here's an example of what I mean. I work at home, in my eBay and other internet businesses. My husband works from home with his plumbing contracting business. His office is in the home, and he parks the truck here, but the actuall plumbing work is done at other locations. There's zoning questions for some home-based businesses and you'd better find out these answers before you get any further with your plans! Contact your local authorities for information.
Do you want your own website? Will you build it yourself? Hire the work out? Who will maintain the website... that is, who will make changes to the site, add things etc. Is your computer up to the job? And is your internet service fast enough? Dial-up is fine for emailing Aunt Martha, but it's s-l-o-w for business.
Could you use an existing site at first, like eBay for instance? Think about it now. There are lots of inexpensive
websites to sell on besides eBay.
They're just the most well known.
If you're starting a business with a physical location, where will it be? Will you be located at a shopping mall, strip-mall or stand-alone building? Will you lease or rent month to month? Is there parking for your customers? (that was a nightmare for my skateboard shop on Main Street!) What kinds of signs will you be allowed to use? Ask yourself and others LOTs of questions now, while you're still writing the business plan.
"How" is the real workhorse of your business plan. This is where all the details are.
- How will you find the merchandise you plan to sell if you're retail? Can you buy it wholesale? When I saw my first wholesale catalog, I thought they'd sent me the wrong one! After I'd signed the lease, I discovered how little profit there was in what I was planning to sell. That was a great time to find that out. The problem I had was that I couldn't get a wholesale catalog until I had a street address for my business. (That was 10 years ago, and things have changed with the internet.)
- How will you advertise, market or otherwise tell people that your business exists, both online and off?
- How many of your widgets will you have to sell in order to be profitable? Figure that out ASAP!
- How will you get your widget to the buyer? If you're selling online, the answer to this is important! The shipping department will probably be YOU at first. Better figure out shipping costs and methods.
- How will you get paid? With cash or credit cards? Paypal, google checkout or a private credit card processor if you're online? When will you be paid? At the time of the sale or when your service is completed? Maybe you'll send an invoice later? Think about them, plan for best and worst case scenarios, and write it in your business plan now.
I've probably left some things out, but I think you get the idea by now. I'm sold on writing a quick and easy business plan whenever I think about opening a business.
This plan is easy enough for anybody to do without taking a lot of time. Work with it, look at it often, change this or that... it's your plan for your business.
I've been involved with small businesses all of my adult life. Having a business plan that you thought about and wrote yourself will give you the confidence you need to open your business.
You'll have eliminated most of the guesswork, and be able to handle more of the surprises that happen. By having a business plan, you increase your chances of success.
You can either take a road-trip without a map and get lost or never arrive at your goal, or you can plan every single detail of your perfect trip and never get the car out of the driveway! I want YOU to start on the road to success with a basic business plan. Perfection is optional. Get a move-on! And good luck with your business plan!
Return From Writing Business Plan To Starting A Business Checklist
Return to Hungry Entrepreneur home page from Business Plan