Ironically, the best way to start a business is to develop a business plan – a written narrative about your business. In writing a business plan, the author not only tests how complete his/her ideas are for developing a business, he/she also tests how clearly and succinctly the plan can be explained to a reader.
In developing a business plan, it’s essential each would-be business owner cover a range of topics that matter most to the business.
A good business plan can be broken up into three major sections: (1) What the business will do, (2) How the business will do what it will do, and (3) How much it will cost to do what it will do and the associated revenue/profit projections. Each section can be broken into more specific topics. Below, I’ve outlined a viable, bare-bones approach to presenting a business plan:
- Executive Summary: In less than one page, clearly outline your business in a compelling manner.
- Business Description: Use several pages to detail your business, and include all its distinct and unique aspects.
- Product/Service Description: In this section, provide detailed information about your product, is advantages, and your demand analysis.
- Competitive Analysis: Provide a detailed review the market, is size and scope, list your competitors, and the segment of the market you’re targeting.
- Strategy & Execution: This section is the action section. Here you pull together the descriptive information provided and lay out your plan to create action and leverage your ideas.
- Management Team: In this section, provide detail around your management team (if applicable), their experience, and qualifications. There should be an implicit argument made here that the team can deploy your strategy.
- Financials: Often, financials are tough – pinpointing costs and projecting revenue can be difficult. In this section, ensure you have a reasonable methodology for developing your numbers and be prepared to back them up.
In the end, a business plan is as much for the business owner as it is for an investor. So, regardless of your plans to raise money (or not), develop a business plan. Otherwise, you’ll find yourself in hostile territory without a map or a route to safety. Think about that for a minute…