Writing a business plan can be challenging and time-consuming, but it doesn’t have to be! By opting for a lean business plan, you can both simplify the planning process and create a business plan that is flexible enough to adapt as your goals and objectives inevitably shift.
What is a Business Plan?
A business plan is a document detailing your business goals, assets, and relevant information to help focus your growth strategy. It is especially valuable in the startup phase when your business is mostly just a concept, as it helps you nail down a more concrete vision of what you want your business to look like (and how to get there).
Why You Need a Business Plan
A business plan is beneficial for any business that is just starting up, both for internal goal setting and acquiring external funding. Potential investors will want to know how you plan to grow over the first several years of your business, and how they can expect to receive a return on their investment. Having a professional business plan may increase your chances of acquiring funding from investors, as it will give them a clearer picture of what they’re helping you build.
Even if your business does not require funding yet (or at all), a business plan can help you hone in on a clear direction and stay the course when times are tough. If you’ve been operating in the hobbyist mentality, writing a simple business plan can help you take it to the next level and start building a clear brand around your business.
What A Business Plan Should Include
A successful business plan should be no more than 10 to 15 pages in length, though it can easily be much shorter! A business plan should include:
A concise elevator pitch that defines your business in 1-3 sentencesA detailed business descriptionSpecific goals and objectivesDescriptions of products or services your business offersResearch into your target market and top competitorsMarketing and sales strategyFinancial projections and needs
The length and detail that will go into each of these elements largely depends on the purpose of your business plan. A business plan designed to present to investors or potential partners may require much more detail and professionalism than a simple document written for your own benefit as a single business owner.
6 Steps for Writing a Business Plan
Whether you’ve been in business for years, or it’s still a concept that has yet to become concrete, these simple steps can help you better understand your professional goals. Just remember to keep every element clear and concise, and be prepared to go back and adjust as the vision for your business becomes more defined over time.
1. Know Your Value
A compelling value proposition is what sets your business apart from the competition. More than just your unique selling point, your value proposition defines how your business brings value to your customers both practically and emotionally.
This is more than just an elevator pitch, although it often includes one. Your value proposition should have a gripping header followed by a short subheading that lends specificity to the broader value. Within your business plan, you should also follow this with a 2-3 sentence paragraph that further expands on the concept.
As this is the first—and most important—page of your business plan, you may want to come back to it later once the nitty gritty details are worked out. This should be the most branded part of your business plan as it sets the tone. This is especially important to get it right when sharing your plan with potential investors. Before narrowing down your concise and official proposition, write a list of everything unique about your business and the value you provide to consumers. Once you have your unique benefits identified, developing a strong value proposition will be much easier!
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2. Describe Your Business and Offerings
The next section of your business plan should cover all the nitty gritty details of what your business does. In this section, be sure to include:
Your registered business nameOperating location (if localized)How your business is structured (sole proprietorship, LLC, or corporation)Information about any partners and other important members of your teamDetailed descriptions of the products or services you sellYour company’s background (if you’ve been in business for a while)
If your business plan is designed for potential investors, incorporate value language into the product or service descriptions, connecting it back to your value proposition and relating a consistent story for your business throughout the plan.
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3. Provide Market Research
A thorough understanding of your target market and your competition is essential for a successful business plan. In order to sell a product or service, you must understand the problem your offer is solving, who needs your solution, and who else is providing solutions.
No matter how original your idea, someone else has created something similar. Your business plan should include research into your top competitors to help clarify your unique value and how your business differs.
Think about what makes you different (or better) than your competitors? Why would customers choose you over them? If your business isn’t distinct enough from those you’re going up against, perhaps it’s time for a change. Use this section to inform your value proposition and adjust as needed. It’s tough not to be emotionally attached, but try to view your business objectively here.
College educated women, ages 25-40.Professionals who care about high-quality products and services and are willing to pay premium prices to get the results they desire.
4. Analyze Business Finances
Depending on your startup costs, you may require funding in order to launch your business. By this section you’ve hopefully convinced investors of the value your business will provide and now you’ll need to outline your specific funding needs. This should cover all of your estimated expenses, from ongoing costs to one-time investments, and how you plan to turn a profit over the course of your first years of operation.
Even if you don’t require funding and are building your business on your own dime, this section is essential for clarifying your expenses and budget to keep business finances above board. If you just started your business, or are still laying the groundwork, you may not have many specifics yet and will want to refine this section of your business plan down the line.
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Mortgage or Lease PaymentsInsurance ($500-700 annually)Legal & Professional FeesAccounting FeesSelf-Employment TaxesProfessional CleaningUtilitiesCredit Card Processing FeesMarketing
5. Select Sales and Marketing Channels
Now that you have all the research and financials in place to build your business, how are you going to actually make money? Briefly determine the specific sales channels you will focus on for your business, as well as the marketing outlets you’ll use to promote your business and connect with your ideal customers.
Sales channels typically fall into one of two categories: online store or brick-and-mortar storefront. Even when selling a service, you’ll have a website or an office as your base of operations. As you start out, it generally makes sense to implement one sales channel, but eventually you may want to expand into a second. A bakery, for example, will likely start with a storefront, but may expand to online sales down the line. Or they might opt for the reverse, starting with a website that advertises their dessert catering for local events, and then opening a shop when the budget allows.
You should also determine how you intend to get the word out about your new business. A brick-and-mortar storefront may get some foot traffic, but should still consider other forms of advertising. Marketing channels can be anything from social media and ads, to emails, publications, and collaborations. It all depends on what you are selling and where you can communicate most effectively with your target audience.
Sales Channel: Storefront
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6. Establish Major Milestones
No business plan would be complete without some goal setting! Don’t be afraid to get specific and bold here. Define tangible milestones and detail how you plan to achieve them, taking your business from breaking even, to turning a profit. These milestones don’t necessarily need to be financial in nature, though focusing on the investment potential will serve you well when seeking investors. They should also motivate you personally and hold you accountable to staying the course and seeing your business plan through.
October 15, 2022: Set Up StorefrontNovember 15, 2022: Grand OpeningJanuary 1, 2023: Review ProgressJanuary 31, 2023: Review Financials from Previous YearApril 15, 2023: Calculate Price IncreaseMay 1, 2023: Announce Price IncreaseMay 15, 2023: Raise Prices
What to Do After You Write Your Business Plan
Creating a business plan may be one of the first steps you take when starting your business, but it’s only the beginning. After you define the makeup of your business, you need to start implementing strategies to make your vision a reality. This could mean reaching out to investors, building a website, starting your first marketing campaign, or patenting a product. Whatever it is, you will find it much easier to tackle with a solid business plan at your back.
Just as you need a business plan to clarify and articulate your vision and goals, you also need the proper tools to ensure it all runs smoothly. One of the best ways to save time and money on your startup journey is by opening a business bank account. Lili provides tools and services that empower your business and ease the burden of financial planning. If you’re ready to take your business to the next level, open a Lili account today!