A good coffee buzz on a Saturday morning can quickly spiral into a decision to become an entrepreneur. You think you’ve come up with a good idea—something original. You grab a piece of paper and a pen and start jotting down an outline. You’re creating a road map for how you’re going to make this little daydream transform into a reality.
The reality of the situation is that most daydreams don’t convert into a business. You see, launching a small business isn’t easy, and it requires time, thought, and some capital. Where money is concerned, if you plan to have other people fund your endeavor, then they’ll probably want to see your business plan. Even if you plan to support the operation from your own pocket, it’s still a good idea to create a business plan.
So what exactly is a business plan? Well, simply put, a business plan is a document detailing a company’s goals and the strategies to accomplish those goals. The purpose of your business plan is to give some direction and remind you of your goals throughout launching your business. Business plans can be pre-made (using a template), or they can be custom. You can also take a successful business plan template and alter it to fit your needs!
So, where should we start? Let’s begin by finding out your type.
What’s Your Type?
To create the perfect business plan and get organized for the road to success, you first need to decide what kind of business you’d like to create. When you envision your future business, do you have many of the details about how you’ll reach each milestone? Or, are you more of a big-picture dreamer? Either way, there is a business plan category for you.
If you feel like the Devil is in the details, and you need to plan each and every factor of what should occur as you launch your business, then your business plan category would lean toward the traditional type. This simply means you’ll include a lot of detail in your business plan and your document could end up being quite lengthy.
The good news is it does the work on the front end, instead of coming back later on and saying, “Oh, I hadn’t thought of that.” There are plenty of business plan templates you can use that include a lot of space for details, so it’s just a matter of sifting through the options to find what you need.
Big Picture Oriented
If you’re on the other end of the spectrum and aren’t afraid of the trial-and-error method, then your business plan would fall into the lean startup category. Keep in mind this type of business plan is not a bad or lazy way of creating a layout. Your plan is less detailed, and in some ways minimizes disappointment because you don’t get your hopes set on any one thing, and you’re flexible to pivot. There are also business plan templates available for the lean startup, so rest assured there is something that will fit your specs.
Regardless of which business plan category you fall into, just make sure you include all necessary elements of your business plan within your document.
The Elements of a Business Plan
Before you can begin creating your business plan, you need to know the specific elements! The elements of a business plan ensures the document answers crucial questions that the reader will encounter while reading.
At the minimum, your business plan will need to include the following elements:
- An Executive Summary – Consider this to be the intro of your business plan, which summarizes the essence of your business. Give a mission statement and the strategies for achieving your goals. This is your intro, so you’ll go into more detail under each of these categories.
- The Company Description – This is where you will provide the details about your company. Tell the reader what your service is, and who will benefit from it.
- The Market Analysis – How are other like-businesses performing in the market? What makes your business unique from those businesses, and how will you compete?
- Organization and Management – Outline the structure of your business from top to bottom. Who will run the company? How many departments will you have? How many people do you plan on employing?
- Service or Product Line – Go into more detail about your product or service. What kind of service will you be providing? Will you produce anything? If so, will you keep inventory, or will you create on demand?
- Sales and Marketing – The sales and marketing teams typically drive the sales for a company, so who is going to beat the pavement for you?
- Funding – As previously mentioned, sometimes it takes money to make money. So, are you looking for investors, or have you been saving money to launch on your own?
- Financial Projections – What will your overhead be, and how does this translate into your gross profit? What do you forecast your revenue to be the first year, and then year after year?
- Appendix – The appendix will include artifacts that support your claims or projections within your business plan. This might consist of items such as pictures, data sources, legal documents, and/or credit history.
Remember that the type of business plan you use (traditional or lean startup) determines how much detail you go into with these elements, or whether you will be including more factors than these in your plan.
Using a Template, or Going Rogue
Now that you understand the various business plan formats to choose from, it’s time to consider whether you’re interested in using a template, or going rogue with your own uniquely designed business plan layout.
Well, business plans are a tried-and-true way of presenting the information. Business plan templates are created by someone else—typically an expert in the field—and have become a commonly utilized document format. Business plan templates basically make life easier for you, they take the guesswork out of deciding what to include in your document, and they are pre-formatted. Pretty great right?
Some people, on the other hand, prefer to take a more custom approach. Therefore, they forego the business plan template. Designing your own business plan layout, however, allows you to create your business plan based on your unique business needs. You’re able to include or eliminate any piece of information that you do not feel is relevant or particularly useful.
The downside of designing your own business plan layout is that you will spend a little more time formatting the document. It’s possible that you might forget to include something pertinent in the report. One way to prevent the omission of crucial information is to use a business plan template to compare against the document you’ve designed. This way you get the best of both worlds—a unique record for your business, but you’ll know that you’ve included all the most necessary information because you’ve checked it against a business plan template.
Regardless of whether you choose to use a template or choose to design your own layout, don’t spend too much time stressing about whether or not you made the right choice. The important thing is that you’re creating a business plan. So make a decision and roll with it!
Sample Business Plan Template
If you search the internet for a business plan template, you’re likely going to find thousands (if not millions!) of results. Therefore, be sure to narrow your search by specifying your line of business. Determining business type can help you identify the business plan template that’s best suited for your business.
Make a Plan, Not a Wish
Antoine de Saint Exupéry famously said, “A goal without a plan is just a wish.” Launching a small business also requires the dedication that you are going to see it through, regardless of the obstacles you encounter. Know that creating a business plan—whether you use a template or custom-create your business plan—will require some research on your part. You can do it if you’re determined to achieve your goal!
So, stop wishing – figure out your business plan so that you can give those goals something to push them forward. Who knows? That coffee buzz could turn your ideas into the next big thing.