Defining “Business Plan” and 5 Steps to Build the Ultimate One

A business plan is essential for startups and other small businesses to find success early on. Here’s what the term means, and how you can go about building one.
by
Entrepreneurship
October 16 | 2 Minutes

We define “business plan” as “a document that outlines a company’s business goals and plans for achieving them, often used as a roadmap for marketing, sales, finances, etc.” What does this mean? Here’s how you can create a business plan that will bring your small business success in five steps.

Business plan

Source: Unsplash

1. Research Your Market

The first thing to consider when developing a business plan is what the needs of the market are. Research your space as much as possible, including current trends and how you’d like to change it. Look at how the competition is succeeding, and how they’re falling short. You’re ultimately creating a product or service for the customer, so knowing what they want will inform you of your business plan’s goals.

2. Develop a Clear Purpose

You are pitching your business plan to get funding, so your purpose needs to appeal to investors. What does this mean? They need to have a clear idea of the direction you’d like the business to take. Share with your investors what you hope your company will achieve and what benefits your product will offer customers. You also need to figure out how your business stands out from the pack. Communicate all this information in the most focused and succinct manner possible.

3. Get Into the Nitty Gritty

Sharing your purpose with potential investors is vital, and how you plan on achieving that purpose is equally important. Delve into the details of your business. This element of your plan should present information like cash flow, expenses, earnings, and revenue forecasts. Make sure not to skim on the more granular factors such as licensing agreements and legal considerations.

4. Prepare a Marketing Strategy

Every investor wants to know how you plan on selling your brand, and that’s why developing a marketing strategy is so important. Write down plans for future product releases and how you plan on optimizing your product. From a financial standpoint, unveil ways to increase profit margins, and how you can increase prices without sales dropping. Other elements such as PR initiatives, content ideas, and social media goals also matter.

Marketing Strategy

Source: Giphy

5. Don’t Forget the Human Element

When investors put their money into your brand, they’re hoping to make money, and they’re also buying into you. Look within and find out why you’re passionate about your product, what your values are, and how you hope they’ll improve the lives of your customers. At a deeper level, a business is not about money–it’s about people. And if you’re aware of this element when creating your business plan, investors are more likely to buy in. 

The Takeaway

There’s no perfect formula for creating a business plan, but keeping these elements in mind increases your chances of crushing it out of the park. Think about your market, how you plan to make money, ways to market your brand, and how you will connect with customers. Once you bring all these elements to the table, your business plan will be in a much better place moving forward.

Header Photo Credit: A Research Guide

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