How Small Business Owners Can Write a Business Plan That Targets Growth

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New businesses are started every day in the United States. They range from solopreneur brands to full teams of workers that have a vision for the future of their fledgling company. Roughly 4.4 million new businesses are born each year in this country. 

No matter what industry your brand is in, that is a lot of competition just from other young brands, which doesn’t take into account the competition that already exists.

It is safe to say that “making it” with a small business is a massive challenge. Even if you have a business degree and a great idea, there are too many variables that make it impossible to guarantee success. All you can do is set your company up for success to the best of your ability.

One strategy that every new brand should implement is writing a business plan. This is not just an informal statement of goals, but rather an official company document that will help determine the direction of the brand as well as how it will reach its goals. A comprehensive business plan is necessary for unifying leadership, attracting investors, and providing a guideline when important decisions are being made.

The problem is, many entrepreneurs are not sure how to write an effective business plan. Let’s break down the various sections so you can draft up a plan that targets growth.

1. Executive summary

The first section should be a brief description of the company as if you were telling a stranger about what it is the business does. If you have not crafted a mission statement or company values, then you will want to do so to include them in this section. 

Creating a business plan

Describe the product or service you are offering and give basic information about the structure of the company as it stands today, including leadership, employees, departments, etc. Where is the business located and where is its service area? Readers should have a basic idea of what the brand is about after reading the executive summary.

2. Company description

You will go into a little more detail based on the points from the previous section. For example, what is going to make your brand stand out from the competition? What about your strategy or product makes it better than others? What customer needs are you meeting and how are you going to solve the problems they have with your product or service?

Additionally, you should describe in detail the customers that you hope to attract. Is there a certain industry niche that you are planning to step into and are you a B2C or B2B brand? Listing out the strengths that your business has that will give it a better chance of success is what this description is about.

3. Market research

No business can be successful without a deep understanding of the market. Understanding the direction of the industry and who it is you are selling to are both critical components of a strong company. 

Carry out market research and identify industry trends

In the market research section, be sure to include information about your direct and indirect competitors. Are there gaps in their marketing or product offerings that you can exploit to drive more sales for your brand and earn a greater market share? Do patterns exist in the industry that demonstrate an opportunity for targeting your customers with perfect marketing? Writing this section of the business plan will help you focus on the strengths and weaknesses of competitors to find opportunities. 

4. Structural plans

In this section, you will describe in detail the structure of the company. Are you a sole proprietor or are you planning to become an LLC? The legal identification of your brand could have an impact on potential investors and their funding capabilities.

You should also break down the leadership structure of the organization. For example, what c-suite positions are filled, and how qualified are the individuals in those positions? What departments exist and what departments may need to exist in the future if growth occurs? Is there a recruitment marketing platform in place to hire new talent? It can be helpful to have a visual aid to display the team structure rather than writing it out by hand.  

5. Product details

Here is where you get to brag about the product or service that you are selling to customers. Go into detail about the benefits that customers experience when using the product and how it solves their problems. Define the product lifecycle, which includes the stages of introduction, growth, maturity, and decline. 

You should also talk about the logistics behind the production of what you are selling. If it is a physical product, how is it manufactured and what plans are in place to scale up production? For services, how are they managed, analyzed, and improved? Product development is an aspect of business growth that should also be included in this part of the plan. Share information about the intellectual property rights or copyright status of your product. 

6. Marketing/sales

This is the stage where a lot of investors may be convinced to provide funding or to back out. They want to see that you have thought about how you will attract customers and bring in revenue. 

Lay out your marketing plan in as much detail as you can. Will you focus on an email initiative and take advantage of email marketing hacks? Is social media going to be the backbone of your strategy? Is your target audience a little older and may connect more to television/radio ads or direct mail campaigns? A well-planned marketing strategy demonstrates that you understand the audience and how to communicate with them.

Similarly, you should discuss the sales process in this section, starting from the introduction of a brand via marketing to retaining customers for future purchases. Lay out each step of the buyer’s journey and how a sale might happen from beginning to end. The more details you provide, the more helpful this business plan will be. 

7. Funding needs

This section may or may not exist in your business plan. If your brand is seeking out financial investment from outside sources, then it is important to include this in the business plan. You should clearly explain how much funding will be required to meet your goals over the next few years and how that funding will be used.

For example, how much money is going to be needed to help with production? Be specific so that potential investors have a number in their heads to consider. Many business operations require investment, so detail each area that requires funding and how much it will need. Provide as much clarity as you can about the allocation of those resources so investors do not worry about wasteful spending. Include any plans to sell the business, sell shares, buy property, or pay off debt in the future. 

8. Finances

This section will back up the previous section about funding needs. Here is where you will lay out your projections for the finances of the company. What revenue do you anticipate bringing in?

Track your finances

What are your overhead costs and how might they change in the next few years? At what point will the company become profitable? This is your chance to prove that the brand will be successful from a monetary standpoint.

If your business has existed for a while, include revenue reports, cash flow statements, and income sheets in this section. If you are a brand-new business, then this section will focus on projected sales and expenses. Use these projections to determine what your funding needs are for the previous section.

You can also break down how much money will go into the various departments of the company. What is the budget for market or product development or software tools that employees will use for operations? The more detail you can provide about the use of resources throughout the organization, the better.

9. Supporting documents

If you have to lean one way, go with providing too much information rather than not enough. Ideally, you have based much of what you have written in this business plan on documentation and data that you have collected. An appendix of these resources should be included at the end of your business plan that is referred to throughout the rest of the text.

important documents

Providing extra documents like market analysis data, cash flow statements, intellectual property documents, executive leadership resumes, product blueprints, contracts, and permits can put the reader’s mind at ease about how much planning has gone into writing this plan.

Why write a business plan? 

The reasons for writing a comprehensive business plan are numerous, but they boil down to a few simple ideas.

A business plan gets everyone on the same page, from your leadership down to your interns. This guiding document can be used whenever important decisions are being made to see if they align with the stated plan of the brand.  

The other main reason is to convince investors to financially back the future of the company. Demonstrating your expertise on the state of the market, a sales strategy, and the numbers behind the company’s organization will show investors that you know your stuff and have a growth plan. 

If your small business does not have a plan, follow this guide to unify leadership and target growth for the organization. 

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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