- A business plan provides a roadmap for business success.
- Business plans are required if you wish to seek funding to grow.
- Writing a business plan helps you stay focused on your company goals.
Just as you wouldn’t start a building or landscape project without a plan, you shouldn’t start your company without one, either. A business plan that lays out future objectives and plans for achieving them might be the most important company document you create.
“A business plan provides strategies for near and long-term goals and objectives,” says Peter Strauss, an attorney and founder of The Strauss Law Firm. “It lays out a clear blueprint for you to follow.”
For George Premo, owner of Premo Electric in San Diego, a business plan was an imperative. “Business plans are more important in the contracting space than in just about every other industry,” says Premo. “As an electrician, I often work with thin margins. On top of materials and equipment, I need to budget for operational expenses. A plan allows me to determine beforehand exactly where the resources need to go.”
“A solid plan helps you identify your target market, short and long-term goals, as well as the necessary steps to reach those goals.”
Benefits of a business plan
Essentially, a business plan is a commitment to your business and its continued growth and success. It helps set you on the path to reach your goals and provides the necessary steps and required elements along the way.
“A solid plan helps you identify your target market, short and long-term goals, as well as all of the necessary steps to reach those goals,” says Strauss. “A plan also helps you manage your growth and oversee organizational and employee requirements.”
Business plans can also be used when seeking funding or incorporating new business partners. Investors will require that you produce a business plan. Your plan proves that working with you is a good choice.
If there are any areas of your business that are still murky to you, a business plan also helps you clarify those items.Writing a business plan is a great first step to clarifying what you want out of your business. Click To Tweet
What to include in your business plan
Whether you’re a new or veteran business owner, it’s never too late to write a business plan—or update an existing one.
A business plan usually includes the following items:
Company description and vision
Provide detailed information about your company, describing the services you provide. Include your mission statement. List your location and service area. You should also describe carefully the clientele you serve and the problems you solve for them.
In this section, describe your market and its needs. Mention any occuring trends and how you are responding to them. You should also ist some competitors and specify what your strengths are compared to those businesses.
This is where you describe the structure of your business, such as if you are a C- or S-Corp, sole proprietor, or LLC. Include an organizational chart of your team. Note the expertise of each team member, and include bios of your key employees.
Service and/or product line
Describe in detail the services you provide. Include your overarching service, such as general contracting, and specific areas of expertise, such as masonry, framing, painting, etc.
Sales and marketing information
Indicate how you plan to market your business and attract and retain customers. Will you be relying on referrals? If so, are you networked with others businesses that will be sending referrals your way? Do you plan on having an active blog and social media presence? Will you be doing any direct mailing?
Here is where you ask for money, if you’re seeking capital. Explain clearly how much money you require and how the funds will be spent. For instance, will you be using the money for equipment or another form of expansion?
Offer financial details in this section that show readers your business is stable and financially successful. If your business is established, include income and cash flow statements along with balance sheets for the last three to five years. Also provide forecasted income and growth projections. Explain how you plan to make those projections a reality.
Writing a business plan is a great first step to clarifying what you want out of your business and how you plan to achieve your goals. The work doesn’t stop there, though.
“Implementation is the most important step,” says Strauss. “But a regular review of what your company has accomplished and of your future goals is just as vital to a successful business venture.”