The task of creating a full on business plan can seem daunting and is more than likely (along with some other factors of course) one of those things that stops people from actually turning their dreams of being an entrepreneur into reality.
In reality, there are actually two types of business plans, internal and external. Each of these types of business plans serve two different purposes. Internal business plans are meant for the business owner(s) and serves to clearly and concisely define your business. External business plans, on the other hand, are crafted with the goal of gaining financial backing from investors or bankers. The external business plans can be really tedious and time consuming.
So, in order to keep this process under an hour as promised, we will focus on the internal business plan. You can then use that business plan as a blueprint to hold yourself accountable and to guide you as you set out to start your business and build your clientele.
Here are 5 simple things needed in order to create your blueprint in 60 minutes or less:
Your executive summary is your opportunity to provide an overview of your business plan.
Although this is listed first, it will actually be written last, after you have written out the other areas of your business plan. The executive summary should include:
- Your mission statement
- Define what your company does, how it does what it does, and why it does what it does. For some examples of how mission statements should be worded, check this out.
- The company and management
- Introduce the company and ownership. List background and skillset of the owner(s) of the company and show what will be brought to the table.
- The services and/or products that you will offer
- Your competitors and how you will gain market share aka your competitive advantage
- How much your service will cost you, how much you will charge, and how much profit you will make
If you are writing an external business plan for investors, feel free to check out bplan.com for tons of heavily detailed executive summaries and business plans.
In order to succeed in any business, you need to know where the market stands and the potential of the market.
If you’re in the US, you can check out the U.S. Census Bureau, the Department of Commerce Bureau of Economic Analysis, and American FactFinder to find tons of demographic information, as well as stats on consumer income, spending, business activity, GDP and more based on location.
Just like you need to know the industry you’re in, you need to get familiar with your competitors.
If you plan on your business being local or on a state level, you can simply do a quick Google search based on your zip code or state to find out all the businesses offer a similar product or service in your location. I recommend keeping this list at 3 to 5 competitors. From there, quickly browse their websites and find one to two things that make each competitor unique.
If your business is going to be national or global, you will follow the same steps mentioned above, but instead of zip code or state, you will broaden your search to focus more on the product/service you offer.
If you want to dig a little deeper into studying your competition, this article, gives you a few more methods to gather more intel on the competition.
Every business needs to have an USP, better known as an unique selling proposition. This is statement will describe what makes your company unique and better than the competition. It should show how a unique quality that your company offers will benefit the customer.
Here are a few examples of the USPs of some well-known brands:
- Domino’s Pizza: You get fresh, hot pizza delivered to your door in 30 minutes or less or it’s free.
- NyQuil: The nighttime, coughing, achy, sniffling, stuffy head, fever, so you can rest medicine.
- Target: Expect More. Pay Less.
- Geico: 15 Minutes Could Save You 15 Percent or More on Car Insurance.
Once you determine your USP, you will be able to easily flesh out what your company stands on and what you want to tailor your marketing messages around.
Last but not least, you will need to figure out how much money you will make.
Start by figuring out your startup costs, which will include things like business registration costs, licensing, permits, starting inventory, required equipment and website costs.
You will also have your recurring monthly operating costs, such as restocking inventory and marketing costs (which can include website maintenance, or physical marketing materials).
Once you calculate all of your cost, you will need to calculate your revenue aka how much you will charge for your product or service. This will help you figure out your profit (revenue – costs), which will ultimately help you determine how much product you need to sale before you actually start making money to put in your pocket.
Now with all of that said, carve out an hour and get started on your plan today.
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