Before jumping in with both feet, most successful business owners take a moment to research their business ideas. This involves learning about their target audience, what problem their product or service will solve, their competition, and their business model. This research, and subsequent written outline, is called a business plan.
Of course, you’ll hear about those rare businesses that got started with little more than scribbled ideas on a napkin. However, your chances of being such a unicorn are slim. The more you know about the idea you have and how consumers will respond to it, the more likely your new business is to succeed. Let’s go over some of the important aspects a good business plan should include.
- Start with a Summary
By summing up your business plan in a couple of short, informative paragraphs, you can catch investor attention and entice them to continue reading. This summary should include things like your business concept, your current and projected financial situation (including workers comp insurance quotes, material costs, etc.), business goals, descriptions of your products and/or services, target audience, your marketing strategy, how much money you need, and other core factors.
- Describe Your Company
In this section, give all the information about your company that answers two questions: 1) Who are you? 2) What do you plan to do?
Answer these questions in-depth to give you and your investors a better understanding of why you are in business, why you are different from the competition, and why you’re a good investment opportunity. Even if you don’t have any investors lined up, you should include this section as it helps clarify your business ideas, principles, and philosophies.
- Conduct Market Research and Analysis
You may think your product is great, but unless the right consumers agree, your business doesn’t stand a chance. Take the time to research the market to find out how your offerings will fare. This is crucial for winning over investors and validating your own assumptions about the need for what you are selling.
- Detail the Management and Legal Structure of Your Business
Let your readers know who will be running your company and what kind of structure you will operate under. Will your new business be a sole proprietorship, an S corporation, or a limited partnership? Chart the management structure of your business, including each person’s role, responsibility, and relationship to the team.
- Describe Your Products and Services
Although you already described your products and/or services in the summary, use this section to give in-depth details about the things you plan to sell. If you plan to offer many products, you might supply general details about the product lines. If you only offer a few things, then you can provide more detailed information. The key is to show the profitability potential of your offerings.
- Cover Logistics and Operations
What workflows will you implement to bring your ideas to life? Even if you are writing this plan only for yourself, this section is important to ensure you don’t forget any aspect of the business startup. Talk about suppliers, production, equipment, facilities, inventory, fulfillment, and shipping.
Not every successful business begins with a written business plan, but taking the time to research and write out your ideas, especially if you need funding from investors, will help you and them see the potential in your new company. Now that you know what a business plan is and the important things it should include, put pen to paper and get started!
