With the first step in our “how to start a business” guide out of the way, you can move on to step two: writing a business plan. Regardless of which business idea you decide to pursue, a strong business plan is essential to successfully starting a small business.
Although you may want to jump on your idea and get started right away, taking the time to sit down and write out a business plan is easily one of the smartest, most important steps you’ll take in launching your business. In fact, studies have shown that businesses with plans grow 30% faster than businesses without plans
Certainly, the idea of writing out a complex and detailed business plan might seem overwhelming, but luckily, there are a number of ways you can write your business plan—and you can complete the process by breaking it down into a handful of steps. Moreover, in the current business environment, a traditional business plan should only be 30-50 pages—and can be even shorter if you’re writing what the SBA calls a “lean startup” business plan. At the end of the day, the best business plans are substantial enough to convey essential information that a lender, investor, or prospective business partner would need to know, and no longer than that. Plus, there are plenty of resources online, like business plan software, that can show you what to include in your business plan and how to make it look professional.
is your small business for?: This is called your target market—the group of people whom your business is meant to serve.
The more specifically you can answer this question, the better you’ll be able to create products, services, and marketing campaigns that meet the needs of your demographic.
Who are your competitors?: As you’re starting your business, it’s extremely important to research and find out who your main competitors are and how their businesses are similar and different from yours. This research will save you from generating a business model that too similarly mirrors an already established alternative.
What is your unique value proposition?: In other words, what is it about your business that will cause your customers to choose you over your competitors?
How will your customers find you?: Your answer to this question will form the foundation of your business’s marketing strategy. You might think about paid advertising, social media, your online presence, as well as simple word of mouth.
What resources will you need?: You’ll want to consider what resources you’ll need to create your product or provide your service—including equipment, physical space, employees, and more. This being said, you’ll want to take the time to list out all the one-time and recurring expenses you’re likely to incur as part of your cost of doing business.