How to Write a Business Plan for a small Business

We may be well into the New year but it is never too late to write a business plan.

Whatever type of business you have or are planning, being prepared with plans and goals in place will help you start off with a clear road map, motivated and ready to go with confidence and purpose.

I am sure you have heard the quote by Benjamin Franklin “if you fail to plan you are planning to fail” Well sadly it is true. According to The Small Business Association ( SBA) 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10. Around only 25% make it to 15 years or more.

One of the main reasons for these disappointing figures is business planning problems. Another major factor is not investigating the market which I consider to be a major part of planning for a new business anyway.

This is such a shame because although planning may seem like a somewhat daunting task, it can be the deciding factor between success and failure.

A realistic business plan is the basis for any successful business. Creating the plan does not need to be daunting and completing it can be fun especially if you are passionate about your business. Once completed the sense of achievement is immense and when it’s done you can just get to work on following it and implementing everything, knowing that you have an even better chance of succeeding and getting to your destination.

Planning lets you brainstorm and look at the possibilities open to you in a controlled and rational way rather than last-minute panic and stress. It lets you look at the real picture and it can also be a deciding factor on whether you start the business in the first place which may save you a great deal of heartache in the long run. Plus if you are looking for investors or financing then you will always need to present a plan.

SO WHERE TO START?

1. YOUR WHY?

“He who has a why can endure anyhow”

Running a business day in and day out can be challenging and tough and you can forget sometimes why you even started. Being able to return to your original reason for why you started in the first place can be the most motivating and driving factor in helping you to keep going.

You may have many reasons. The easiest way to start is by filling in these blanks;

To…………………………………………………………………………………………………………………………………………..……………..

So that………………………………………………………………………………………………………………………………………………….

The first blank represents your contribution and the second blank represents the impact of your contribution

2. YOUR VISION

Next is to map out your vision so you have a clear picture of what you want to achieve. Vision is all about where and what and is future based and is meant to inspire you. A vision is a vivid mental image of what you want your business to be at some point in the future. It’s important to make your vision as visual as possible, You can do this by drawing images or even searching for images online or through magazines. It’s a good idea to create a vision for the first year and the fifth year. This helps you to be realistic about your business growth as well. A year sounds like a long time but in terms of a business, it is not.

Ask yourself questions like;
What is your life going to look like if your business is successful?
What sort of revenue do you want to generate?
What are your core values?
What will your reputation be?
What level of service do you provide?
Where will your offices be?
What will your business’s greatest strengths be?
What do you want to offer your customers?

An example of a vision is

'There will be a personal computer on every desk running Microsoft software.' (Microsoft's original vision statement)

3. YOUR MISSION STATEMENT

Your mission statement focuses on how you will get to where you want to be and it is based in the present. It answers the question, “What do we do? What makes us different?” It lists your broad goals for which the business is formed and its prime function is for you to define the key measure of your success.

4. YOUR BIG GOALS FOR 2023

Now you need to drill down and work out what your major goals are for 2020. What are the main things you want to achieve in your business this year? You need to make sure they are SMART Specific, Measurable, Realistic and the Time-based ( what is the time frame?)

Here are some examples of SMART goals:

Grow Market Share by 15% by the End of the Year
Create X in Billed Revenue by the end of 2021

5. GET CLEAR ON YOUR PRODUCT OR SERVICE

In order to be able to produce, brand and market your products you need to know the following

You need to be 100% clear on the following
You need to be able to describe your product is one sentence.
What problem are you trying to solve and how is your product going to solve that problem?
What is your USP ( Unique Selling Point)
What changes are you hoping to make in people’s lives?
What are your core values?
What do you need to produce your product?
How are you going to produce it
How will your product be delivered?
Who do you need to employ?
Are you thinking of introducing new products in the future?
What intellectual property rights do you need?
What markets are you going to sell in?
What is the personality of your business? What are you trying to portray? For example, it could be any of the following Value for money, high-end, Eco-friendly, Fun, Friendly, Trustworthy.
What sort of things do you want your customers or media to be saying about your business?
How do you want to be portrayed on social media?
How will you take payments?

6. COMPETITOR ANALYSIS

You need to know who the key players are in the market. Is there room for another player? What are their strengths and weaknesses?

7. GET CLEAR ON YOUR PRICING

In order to be profitable then your pricing needs to be accurate. In simple terms, this is how you need to work it out
Cost + Markup % = Price. But other factors you need to take into consideration are the market price of your product. Are you going to price the same, above or below? Also, don’t underestimate the cost of marketing and make sure you work that into your unit cost.

8. DO A SWOT ANALYSIS

This is a simple exercise to help you realize your business’s strengths and weaknesses. It helps you focus on strengths, minimize threats, know your limitations and take advantage of any opportunities available.

9. DEFINE YOUR TARGET AUDIENCE

“ Everyone is not your customer” Seth Godin
In order to create a successful business, you need to know exactly who your ideal customer is.
their demographics, interests, core values, and beliefs.

Once identified you can find them and craft every message to them. You need to know them inside out. A good way of finding out this information is to find them and interview them.
Once you have all this information you should be able to build an accurate picture of them. The information about your target audience is like gold.

10. HOW WILL YOU SELL YOUR PRODUCTS & SERVICES

You will need to know exactly how you are going to get your products into the marketplace. Examples include, websites, retailers, wholesalers, Actual Shop, Facebook shop, Amazon, Etsy, Creative Market, Google ads, Social media, Webinars, Facebook ads, crowdfunding, and email marketing, You will need to put together a detailed marketing plan.

11. THE NUMBERS

If you are not clear on the figures then you need to get assistance. This is the difference between make or break. You need a personal budget ( what do you need to survive on) as well as the following

  • Profit & loss also called income, the statement shows sales, cost of sales, operating expenses, interest, and taxes. The statement shows performance over some specific time period, like a month, a year, or a quarter.

  • The balance sheet shows assets, liabilities, and capital (assets fewer liabilities). This statement shows a company's financial position at a specific time.

12. PROJECT PLANNER

You are now well on your way and it’s now time to take action. Write down all the projects you need to undertake for the year to create and run your business. Prioritize them and allocate who is going to do these tasks and when they need to be completed.

13. CREATE YOUR MONTHLY PLAN

Now you have all your projects it’s time to plan your monthly projects, goals, and tasks. This will then naturally progress into weekly and daily goals, projects and to-do’s.

See, that wasn’t too bad, was it? To help you get started you can download the Business planner template [here] It will take you step by step through all the above and you will have a workable business plan.

Wishing you all the best with your business plan.