As an entrepreneur, perhaps you’ve always been a “seat-of-the-pants” type of person. Your instinctive nature has allowed you to take risks that have paid off in the past.
However, that spontaneity will take you only so far. To build your company for the long term, you’ll need to formalize your strategy by way of a business plan.
I know what you’re thinking: why should I write a business plan now, when what I’ve been doing has worked so far? Before answering that question, let’s go over the elements of a good business plan.
- Executive Summary – overview of the business plan, including mission statement
- Business Description – description of the business, including a problem you are solving with your product or service, and your competitive advantages
- Market Analysis – analysis of the industry outlook, target market
- Organization Management – how you will structure your operations and staffing
- Sales Strategies – how you will market and sell your product or service
- Funding Requirements – how much funding you will need for both the short- and long-term
- Financial Projections – including all current financial statements and forecasts for the next five years
Now, putting together your business plan definitely is a lot of work. But it’s worth it, for these reasons:
1. Organizes your thoughts.
Sitting down to write your business plan forces you to assess your business idea at both a high level and a detailed view. This is also the time to conduct a deep analysis of the market and of your competitors. By solidifying this information and putting it down on paper, you’ll hone your “elevator pitch” and impress others during impromptu conversations.
2. Communicates your thoughts to stakeholders.
A well-written business plan organizes and presents ideas and projections that are difficult to communicate off-the-cuff. Anyone considering partnering with you or investing in your startup will require a business plan, and will appreciate your focus and clear vision. You can even use elements of your plan to educate potential employees and external partners about the company and their possible role in it.
3. Maintains the identity of your business.
A business plan is a “living” document. As your business evolves and grows, you should update your plan to help you navigate that growth and ensure you’re continuing on the right track. This process will help you maintain a focused and structured view of the future both for yourself, and for your interactions with others.
So while writing a business plan is time-consuming, it’s time well-spent in order to organize your thoughts, communicate with others and keep you on track. You can also stay on track by joining our startup community and connecting with other entrepreneurs. Join us!