If you’re thinking of starting up a small business, you’ll need to create a small business plan.
However, most new business owners don’t understand the purpose of a business plan and why it matters. To create a business plan that’s truly useful it’s important to understand a few things first.
What Is A Business Plan?
A business plan outlines the basics of your business. It details out the products, services, marketing, audience, and goals you have for your business. It also helps you outline and understand how you’ll achieve those goals.
The business plan is one of several important plans to put in place when starting your business.
Other important plans include your marketing plan and your financial plan. Your business plan should pull together all of these in one place. It should help you have a comprehensive picture of your business through the startup phase (or the growth phase if you’re revising an existing plan).
Why Do You Need One?
There are many reasons you need a business plan. These reasons will vary by the type of business you’re starring and how you intend to use your business plan.
Some of the reasons you may want to create a business plan are:
- Attaining funding for your business
- Test out your business idea
- Assure the success of your business
- Know what action to take in your business
- Have all of your important information in one place
Traditional or One-Page Business Plan?
There are many types of business plans. In the Free Business Toolkit we provide a template for you to follow to write a traditional business plan.
However, there are also:
- Start-up plans
- Internal planning documents
- Strategic plans
- Operations plans
- Growth plans
Each of these types of plans will either be in a traditional or one-page format.
A traditional business plan is a more in-depth detailed document that goes into each aspect of your business.
A one-page business plan is a streamlined summary that you can use as a starting point for your business. However, be prepared when writing a one-page plan. You may still need to create a traditional plan depending on what you need to use it for.
Components of a one-page business plan:
- Vision – Where your business will be in 3-5 years.
- Mission – Why you’re starting your business.
- Objectives – The SMART goals of your business and how you’ll measure success.
- Strategies – What are your strategies for growth and your unique selling proposition?
- Anticipated Expenses and Start-up Capital – How much money you have to begin and how that compares to your expenses in the first year.
- Desired Income – How much money you wish to make in specific time frames (1 month, 3 months, 6 months).
- Action Plan – What steps you’ll take to achieve the above.