Creating a detailed business plan is one of the most important things you can do for your business — and it is essential to do it right.
What is a business plan?
A business plan is a document that outlines your business’s mission, structure, goals and plans. According to the Small Business Administration, there are two main types of business plans: a traditional plan and a lean start-up plan. The traditional plan is usually very comprehensive and many pages long, while the typical lean start-up plan briefly covers key elements.
Why do you need one?
As a business owner, your plan provides direction and inspiration for your business. It is also a tool that helps others – like lenders, grant funders and investors, for example – understand your business, how it’s structured, how it operates and how it generates income and profit.
Short term planning for long-term success
There are no set-in-stone rules of the timeframe covered in a business plan. Two popular planning styles are to focus on a one-year plan or a three-to-five year plan.
Developing a one-year plan is a valuable method of setting tangible, achievable goals for your business to reach over the next 12 months. This shorter-term plan can feel more doable for business owners just getting started.
A three- to five-year plan encourages business owners to think more strategically over a longer period of time. Building out the planning and strategy behind a longer business plan, can add credibility to your business when approaching investors and applying for loans.
Elements of a traditional business plan
Like many tasks associated with owning a business, it can be daunting to start writing a business plan. However, taking the following bite-size approach can help you write a successful business plan, section-by-section.
Step One: The Overview
The first section in your business plan is the overview, which should provide basic facts about your business. Important items to include are your business’s name, structure, location, mission, value proposition, number of employees, key financial information, and a chart of accountability for key employees or managers.
Step Two: Products or Services
In this step, you will want to detail exactly what your company does and how it operates. Some questions to answer in this section include:
- What problem does your business solve?
- What customers does your business serve?
- How does it serve them?
- How competitive is the product or business?
- Who does your business work with (manufacturers, suppliers, etc)?
Step Three: Market Analysis & Strategy
The third element explores marketing research. Collect data from your business’s research and competitive analysis, and compile it to identify where your business is positioned in the market. This section should analyze similar businesses, their strengths and weaknesses, and your points of differentiation. It should explain how you will grow your business, what customers you will target, your marketing strategy and how you will outperform the competition.
Step Four: Finances
The fourth element in your business plan should detail your business’s finances including expenses, income, goals and financial projections. This section is imperative when applying for funding with loans or grants.
Not sure where to start? Professional advisors can help you navigate the creation of a plan for your business. At Gift CPAs, our team of experts is here to help you know your numbers as you develop business plans for your business. Because of our relationship-based approach with clients, we make sure we thoroughly understand your business needs, and will offer sound advice to help you plan and achieve your business goals.
If you’d like to meet with a professional and get personalized advice, contact Gift CPAs to learn more about our business planning services. Make an appointment to meet virtually or at one of our five locations in Harrisburg, Mechanicsburg, Myerstown, Ephrata or Lancaster!