Writing a business plan is not a make-work project for your business. It’s an essential tool you need to seek investors and gain financial support to help you grow your business faster. When done right, your business plan will guide you on your path to growing a scalable and profitable business.
Every successful business plan should answer these 10 questions:
1. What does your business do?
You may think you know what your business does, but you need to put it down in words. Think about the market need you’re solving or how you solve your customer’s pain points.
One of the best ways to do this is to write a vision and mission statement for your business. These will act as a guiding force to help you make decisions in your business. For example, if you decide to add a new product to your company, make sure it’s in alignment with these statements. If it doesn’t support your vision for the company or your larger mission, perhaps it’s not the product or service for your business right now.
2. How will you make money?
Do NOT forget about this part! It is a critical piece to ensure your business idea is solid and profitable. It’s also the section that banks and investors will be looking at very closely. If you want a profitable business, you need clearly defined revenue streams and projections.
This section will likely include product pricing structures, details of your income generating activities, remuneration summaries, financial statements to date, and financial projections for the future. Investors want this information so they can estimate when they will see a return on their investment in your company.
3. How will your business get started?
If this is the first version of your business plan you should detail everything you need to get your company launched. This may include things like:
- research and development needs
- market research and testing
- plan for setting up your website and online presence
- legal and regulatory requirements
- licencing and inspections
Each of these items should be given a timeframe and budget where possible. Include a little financial cushioning in your start-up budget because there is likely to be unexpected surprises along the way.
If your business hasn’t launched yet, use this section to outline how and when that will happen and what launch costs you’re planning for.
4. What is your operating budget?
This is the section where you will detail your month-by-month expenses for your business. You should be estimating and budgeting for every expense so you know how much revenue you need every month to break even or be profitable.
In this section consider:
- What equipment you need to buy vs lease or rent?
- What staff will you hire full-time vs outsourcing to consultants or other businesses?
- What are your fixed monthly expenses vs variable expenses?
- What are your costs for licencing and regulatory requirements?
- What professional services do you need to support you?
Be sure to consider all monthly or annual costs associated with running your business.
5. Who are you selling to?
Your business won’t last long if you don’t know that people need and want what you sell. In this section of your business plan, share what you’ve learned about your target market and client.
Get as in-depth as you can and include details like:
- What are the demographics of your target customer?
- How much are they likely to pay for your product?
- Where will they buy your products?
- What add-ons or up-sells are they likely to need/want?
If you’ve created any customer personas for your ideal clients, summarize them in your business plan. Depending on your business, you may have multiple customer types but try to focus on a core two-three maximum.
6. How will you market your business?
If people don’t know your business exists, how can they buy from you? You need to have a detailed plan for how you will reach your target customers. Most of your marketing is likely to be done online, so consult a marketing agency to get a robust online marketing plan outlined.
Here are some possible marketing activities you may include in your business plan as it makes sense for your business:
- create a website
- incorporate an e-commerce platform on your website
- post and interact on social media channels
- put ads in newspapers and magazines
- participate in industry trade shows and events
- host events or workshops
Every marketing activity is calculated to reach the right customers, on the right channels, at the right time. A marketing agency can provide some valuable insights on this for you, from a third-party perspective. You may also consider doing a survey of your target customers to learn more about them, including where they spend their time online or in-person. Use this information to target your marketing for a maximum return on your investment.
7. What is your USP?
Your Unique Selling Point (USP) is how you will stand out from your competitors. Competition in the market can be a good thing, as long as you have positioned yourself to offer something unique.
To find your USP, do some in-depth product and service research to learn more about other similar products or services on the market. When you find some look for this information about each one:
- How are they the same?
- How are they different?
- What add-ons or upsells do they offer?
- What’s their price point?
- Does their company have any values that stand out (like environmental awareness or charity involvement)?
- How do they sell?
Once you know what they sell, your job is to sell your product better than them. In your marketing, emphasize the benefits that relate to the uniqueness of your product.
8. How will you use your strengths and weaknesses to grow your business?
This is the question we dread in job interviews, but it’s imperative as an entrepreneur to answer this question in your business plan. In your plan, you’ll want to summarize the results of a SWOT analysis:
- S – Strengths: How can you capitalize on your strengths to capture new business?
- W – Weaknesses: Where is there room for growth?
- O – Opportunity: How can you turn your weaknesses into opportunities?
- T – Threats: What external factors threaten your business success and how can you circumvent them?
It’s ok to include your weaknesses in your business plan, as long as you can show that you’re working towards a future where your weaknesses turn into opportunities or new strengths.
9. What are your challenges?
No business is a straight path to profitability and success, but you can bend the path as straight as you can. In your business plan, do a deeper dive into the challenges you foresee in your business.
Challenges can come in many forms and may include:
- What if you struggle to increase your slice of the market share?
- What if you can’t consistently meet your monthly revenue goals?
- What happens if someone infringes on your intellectual property?
- How will you deal with potential bootleggers or forgers?
- What if you don’t meet regulatory or licencing requirements?
- What if you can’t find the right skilled staff you need?
For every challenge you foresee, create a contingency plan to minimize your business risk.
10. What are your goals?
What goals do you have for your business? To best measure your business success, create SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals so you see how far you’re progressing. These goals could relate to anything including business growth, revenue, customers and sales, marketing campaign results, and number of internal hires.
Make sure that any goals you set align with your vision and mission.
How to start your first business plan
Make sure that your next business plan can answer all these 10 questions. A well-written, honest business plan can help guide your business to profitability and attract investors to get you there faster.
To get started, contact our team today and we’ll be in touch to discuss the specifics of your business plan that will answer these 10 questions!