“Fail to plan and you’ll be planning to fail” is the oft-quoted line from Benjamin Franklin. Writing down a solid plan of what your business will do and specifically how it will make money is a wise idea, and will help you truly define what your business is (and isn’t) about.
So, How to Write a Business Plan?
A business plan may look very different depending on whom it is written for; is it a confidential for-your-eyes-only plan detailing all of your business secrets, or a pitch document for an investor or prospective bank loan? Either way, you’ll want to include the following elements, in simple, straightforward, and easy to follow language:
- Mission statement – why is our business in business?
- Unique Selling Proposition – how does our business compete and win?
- Customers – who are they, how will we find them, and how much is our Cost Per Acquisition?
- Supplier relationships – how do we get our product/service?
- Competitive analysis – who is our competition and how are we different?
- Operations and staff structure, including growth and hiring plans
- Projected cash flow and Profit and Loss financials for the first year (you can project further but at this stage you’ll probably just be guessing beyond the first year)
Note: there’s no use in creating documents for their own sake. Make this plan your business’ living, breathing, constantly evolving roadmap to success and it will be an invaluable tool to you the business owner. Keep it to a few pages maximum, and schedule a monthly time in your calendar to sit down and honestly review it; your assumptions, projections, and concepts will probably change with experience and that’s OK.
Financials and Accounting
It’s a smart idea to get your accounting set up from the beginning, as going back through months of receipts, papers, and spreadsheets can be a tedious task for you later, or expensive to pay an accountant to do this for you. If you’re familiar with bookkeeping, you may already have a software system that you prefer to use. If not, you might look to one of the online monthly-subscription accounting platforms such as QuickBooks or FreshBooks; just make sure the setup you choose is compatible with your country’s tax system and financial calendar year. Your accountant will be able to help you with this and may suggest software that they already use, making sharing company files with them much easier in the future.
While you may not have a passion for bookkeeping, getting a simple accounting procedure in place will make it surprisingly easy to keep on top of your inflows and outflows, and will help you as the business owner really understand what is (and isn’t) working in your company. Try to do this task yourself in the beginning if you can and you’ll be wiser and more informed for it.
So go ahead, get writing your business plan using the above pointers!