Practically anyone can start a business nowadays. But, unless you have a solid business plan, it’s unlikely that your business will be able to get its feet off the ground. So, what do you need to craft a complete, extensive business plan?
Solid startup business plans require market research, a solid company structure, an executive summary of the company, a thorough description of how the product/service works, and a financial projection. Business plans can be 1 to 40 pages long, depending on the audience.
Startup business plans shouldn’t take a million years to read or write. They’re meant to convince someone how you will successfully run your business. You can choose to make yours as long or short as you need.
Types of Business Plans
There are actually three different kinds of business plans, all used for different scenarios. We’re going to be talking about startup business plans, not to be confused with annual growth plans or scenario planning. To learn more about those kinds of business plans, check out this article.
There are two main styles of startup business plans. You can choose to write a traditional business plan or a lean business plan.
Traditional business plans are around 8 to 40 pages long. They can go as in-depth as you want, and they go over eight main areas of your business. But more on those different sections later. These business plans are praised as being the real secret to success, as they dictate every single part of your business beforehand, almost like an outline to a novel. If you’re trying to ask someone for funding, this business plan will likely be thorough enough to convince them.
Lean business plans are much shorter, usually only a page long and done in graph format. They’re extremely concise; they have to be—you’re explaining the same information from the traditional plan in the lean plan, but with one page to work with. This is great for pitching to people who don’t have a lot of free time.
But if you’re the kind of person that needs every single detail laid out before you start building your startup, the traditional business plan is for you.
Traditional Business Plan
Traditional business plans are used to get funding, but they’re also a great way for you to figure out exactly how you want your business to run. You might have an idea for a great product, but unless you sit down and figure out how you’re supposed to feasibly produce and sell that product, the whole thing could fall apart.
There are eight main sections to a traditional business plan. And if you want your plan to be as thorough as possible, make sure to include each one.
1. Executive Summary
This is the introduction of your company and what you do. It’s what it sounds like: an executive summary. You should be able to lay out all the basic details of where you’re located, who’s in charge, what you sell, how much you’ve sold (if you’re already started the business), and most importantly, the company’s mission statement.
2. Business Description
This is slightly different than the executive summary. Instead of laying out the basic details, this is when you can go into details about the company’s background, what makes you special, and why your business has a leg up on the competition.
3. Market Analysis
This is a description of all you’ve learned while doing market research—it should describe the industry, the consumers, and the competition. What is the competition doing that you can do better? What do consumers want that they’re not being given in the current market and how is your company going to change that?
This is where you explain how the company is structured internally. Explain the responsibilities of core positions, as well as the responsibilities of the lowest level management. Don’t forget to include information about legal structure and how the business will handle any possible lawsuits.
5. Service and/or Product
Here’s the good part. This is why you created your business. Explain the problem that your product/service is solving, how that service/product works, what makes it better or more simple than the competition, and (the most important part) make sure you get across why people will want to buy it.
6. Sales and Marketing
These are the details on how you will get the product out there to the masses. How will they find out about it? How can they purchase it? How much does each product/service cost? And what are your plans to let the target audience know that this product exists?
7. Financial Projection
Here is where you explain how the business will stay afloat. You need to show that you will know how to use the funds you’re making to turn this startup into a lucrative system. You can go into specifics of profit margin per product and how much you project you’ll sell within the first few months.
8. Request Funding (optional)
You can also make a separate section to request funding, or you can include that in the financial projection portion. It’s up to you.
But whether you’re doing a lean or traditional business plan, what you need more than anything to make a successful business plan is getting market research.
Ways to Get Market Research
The hardest item on the business plan is obtaining market research. You can plan out the company’s structure all you want, but unless you know what your target consumers want, none of that will matter.
Unfortunately, thorough market research is hard to obtain unless you have the funds. Luckily for you, there are plenty of free online resources that provide statistics on consumers and industries. Click here to learn more.
Free market research is at your fingertips. People love to complain online, so going on Reddit (or other forum pages) and looking at what’s written about the competition will let you know what your company can do better. You can also pay YouTube to send out surveys to people across the world, giving you more exposure than you could ever hope for. To learn more about how to write informative survey questions, read this article.