- The Ultimate Guide to Starting a YouTube Channel for Beginners
- 6 Stellar Services Small Businesses Need for Growth and Longevity
- How To Outsource Your Social Media Marketing And What It All Means
- A Step By Step Guide On How To Write A Business Plan For Financing
- 5 Lessons I’ve Learned That I Would Go Back And Give My Start-Up Self
A Step By Step Guide On How To Write A Business Plan For Financing
When you’re initially outlining your small business idea -- a simple, one page business plan is usually a great way to get started. You basically just want to capture the big picture overview of your business so that you know what you’re doing overall.
Starting with the one page plan can also help get your momentum moving forward without getting bogged down in feelings of overwhelm at attacking a full-on business plan you’ll need for financing (which will also be discussed). But first, the one page plan.
Start Simple With The One Page Plan
Dip your toe in the business plan waters and follow these five east steps to create your one page business plan.
Step One: What’s The Vision?
Your one page plan starts with the end. Why are you in business and what are you going to do with it? Are you growing this business to sell? Do you want the business to leave a legacy or end with you? Why are you starting this business? It’s important to start with the end in mind, your vision should summarize that well. This section doesn’t need to be long: a few well-written and laser-focused sentences should be able to convey your purpose.
Step Two: What’s The Mission?
This part is easy: what’s the mission statement for your business? This is the statement you see printed and plastered all over business lobbies and corporate websites. This tells the world and your staff what the mission is and reminds you every day to get on board toward that mission. As you can see, this can be as short as a well-thought out sentence.
“People working together as a global enterprise for aerospace industry leadership.” -Boeing
“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” - Starbucks
“To provide the best customer service possible. Internally, we call this our WOW philosophy.” - Zappos.com
“We’re in business to help improve lives.” - Toms Shoes
Step Three: What’s The Objective?
Think of the objectives for your business kind of like the overall bullet points of things your business hopes to achieve. For example, “we plan to occupy 10% of the energy drink market globally by 2020,” or a smaller HR objective like, “we plan to hire our first three full time staff members in these specialized areas by year’s end.” These should be the big goals you want to achieve and on top of that add your deliverable time stamp. Notice how all those objectives had deliverable dates? “By 2020” or “at the end of the year.” You need to attach dates to deliverables.
Step Four: What’s The Strategy?
So you have a fancy list of objective deliverables and the dates you want to accomplish them by… how are you going to do achieve them? Your strategies describe how you plan to reach your stated objectives. What’s the marketing plan? Sales strategy? This isn’t all the nitty-gritty detail just yet (that’s coming up next). For now, just define and outline an overall strategy for achieving your goals.
Step Five: What Are The Details?
Okay, now it’s time for details. You have the objective, you’ve decided on some winning strategies; now what actionable steps will you take to make sure your business reaches the manifestation of your big vision? These should be short-term actions, daily tasks, things that you can start doing now to work toward the end goal.
What kind of staff are you going to need in place? How about freelance or contract talent? How are you going to reach this goal in time, what resources do you need and who is going to help? This is the part where you talk more specifically about the daily work that’s required to get going.
See that wasn’t so bad? Something about a business plan being one-page can really get your creative and business brainstorming juices flowing… and odds are good if you write each section of your plan as you read it above, you’ve probably got WAY more than just a one page plan at this point. Awesome!
By biting off bite sized pieces of the massive business plan you can break down the process and start to see how achievable this part of your business really is for you to accomplish.
So since you did that part so well, let’s take it a step further and expand on your work… because if you’re like most small businesses, you’re going to need money at some point.
And if you need money, you’re going to need a finance-centered business plan. What does that mean exactly? Well in all honesty you’ve done the hardest part outlining your one page plan. You just need to take it to the next level and get some more detail in there to satisfy potential investors, banks and any other person or organization that you might approach for capital, loans or any other kind of money.
It won’t be too hard if we take it step-by-step again.
So here are seven simple steps outlining what you’ll need to do to that one-page plan to transform it into a finance-centered business plan.
One quick note before we start: make sure you save a copy of your one-page plan, as both the one-page abbreviated version and the finance-centered versions will be necessary for different situations. Have both at your disposal for your business.
Step One: The Executive Summary
First you’re going to need to provide an executive summary of your business plan for investors or lenders to read. Think of this like the “cliff notes” of the whole plan. Essentially, this is your one-page business plan that you wrote already. The bulk of that document now becomes your executive summary. It should cover the highlights and key summary of all the other areas of the plan you’re about to cover. Make sure that it’s brief enough they can get through it quickly, but also contains enough information that they’ll want to keep reading and get the sense that you and your business are a good investment (or lending risk).
Step Two: Business Overview
At this stage in your business plan you’ll want to outline what it is that your business is going to offer and what methods you plan to employ to make sure that it sells. It’s a high-level overview of the business’s make-up that should include the type of business you’re in, how and where you plan to sell your product or service (online? Retail location?) as well as the legal entity type you’ll be forming for your business. Are you an LLC, sole proprietorship or corporation (if you don’t know the answer check out this article on business structure)? It can be easy in the executive summary to stray from the high-level overview so make sure you stay on point and keep this very broad. You’ll get into the nitty-gritty details later in your plan.
Step Three: Management
If someone is going to invest or lend money to you, they want to know who the leadership team in place is that is going to run your business. Is it just you? What are your personal and professional qualifications for the job? What’s the rest of the advisory board or executive team like and how are they qualified. Spell out the management so investors know your business is in skilled, capable hands.
Step Four: The Market
This is a crucial step that so many well-intentioned entrepreneurs skip. They get so excited about their passion for the business they want to create or the product they envision that they forget to sink ample time and resources into doing the market research. No matter how much you’re in love with your idea, if there isn’t a market for it, it’s not going to sell -- which in turn means you’re business isn’t going to succeed. Find the need for your niche and amply describe your research for the market in this section to you and your potential investors know the market demand. Be prepared and don’t skip this critical step.
Step Five: Sales And Marketing Strategy
This is the stage of your plan in which you will get to expand on step two’s business overview. Now you get to really detail out how you plan to sell your product or service, what the marketing strategy is and how you’re going to create your specific success plan. Knowing your business and knowing the market thanks to your great market research will inform your decisions to set strategy here.
Step Six: Financials (This One’s A Biggie!)
The sixth step in your business plan is often the one that presents the greatest challenge for some entrepreneurs. If you’ve managed to get this far in your business plan you are going to need to see it through and do the financials. The finance-centered business plan comes down in a big way to this step as those about to lend you money or invest in your business are going to want to know that their investment is projected to succeed. Often entrepreneurs alone don’t have the skills and background necessary to map out financial projections so do yourself a favor and partner with a qualified, skilled CPA or Business Consultant who can help you with this part. Not only will that lend extra credibility to your business plan but it will help you set out the financial future to anticipate your business’s success.
Step Seven: Do Your SWOT
“SWOT exactly is that,” you might be asking (pun intended)? SWOT stands for strengths, weaknesses, opportunities and threats and is your acronym assault on market research! You’re going to have to analyze the market for the business and its competitors. This is your opportunity to show that you’ve put time and analysis into the success of your business idea. What will be the strength of your product and your management team? What are the weaknesses of your business and areas of vulnerability in your plan? What opportunities in the market are you planning to capitalize on and what threats already exist or might materialize from the competition? Don’t underestimate the threats and weaknesses section of this analysis. You’ll want to show you thought of every angle and are prepared with ideas and answers.