The business plan is a critical element to starting a successful business. Why? Because a great plan is the foundation for operations and gives solid reasons as to why the business will be a success. The document needs to be as specific as possible and communicate the company’s vision and mission. It may sound overwhelming, but breaking it down into smaller pieces helps.

 

Getting Started

Every plan needs to explain why you are going into business. What need, desire or demand are you fulfilling? State the specific problems and list how your company solves those issues. After you – and other people – read the plan, you should be convinced that your idea makes sense. Be as objective as possible and give facts and statistics, if they are available.

The Financials

This section deals with both cash outlays for initial costs as well as a projection of how much money you anticipate making. No detail is too small or too large to ignore. For instance, if you know you’ll be going through toner cartridges on a regular basis, list them and how much they cost. On the projection side, show the anticipated number of customers or units being sold/produced. The numbers have to make sense for the business to be viable.

Competitive Analysis

Who is your competition? Just how does your company fall into the landscape of those in your industry? These are the questions that need to be answered. List your competitors, what they do and how they do it. Then describe how your idea is different, how you are giving customers more value for their money.

Market Segmentation

Chances are good that you want to target as large a market as possible to build your customer base. Dividing your market in order to conquer it actually works better – and is often more cost effective – than taking a widespread shotgun approach. Look for individuals or businesses that have the need your company fills. Your plan needs to show your primary focus and how that particular segment is different than others. This helps you outline your specific marketing plan.

Risk Mitigation

Challenges are going to happen. Shipments will get lost, suppliers go out of business and natural disasters occur. Have a plan to deal with these issues before they take place and you’ll save yourself from future headaches. Also, it shows people reading your plan that you understand that problems crop up and that you’re ready to handle them.

 

Your business plan not only helps you solidify your ideas; it can also attract support. Potential investors will appreciate the details, especially when they are backed up with solid documentation. You may also attract people who want to work for you, people that share your vision for the company. Other organizations may want to partner with you, which opens up their established customer base to your business.

That’s why this one document is so important. When your entrepreneurial dreams are at stake, it makes sense to do everything possible to ensure prosperity. Want more information or guidance on writing your plan? Check your local resources – such as the Small Business Development Center. This is a program that helps established businesses and aspiring entrepreneurs throughout the United States. We highly recommend the centers at Waubonsee Community College and Elgin Community College.