Starting a business can be daunting. It’s not just about the idea, but also how to finance it and navigate the myriad of government regulations that you’ll have to deal with. The Entrepreneur Center provides free guidance for entrepreneurs on topics such as starting a business, funding your startup, legal advice, entrepreneurship education and more.
The “how to write a business plan step-by-step” is a blog that provides an easy way for startups to create their business plans. The blog also includes tips and tricks on how to get started with the process, as well as examples of other successful business plans.
This article is part of our Business Planning Guide, which is a collection of articles that will assist you in the planning process.
This article is part of our Business Planning Guide, which is a collection of articles that will assist you in the planning process.Before you start a company, most business consultants, experienced entrepreneurs, bankers, and investors believe that you should write a business plan. A strategy may assist you in moving ahead, making choices, and growing your company.
However, not every company requires the same degree of detail, and not every business plan is the same.
When you initially start a small company, you may just need a basic business plan, and that may be enough for you. You may also start basic and work your way up when you are ready to contact lenders or investors. This is a great application of the Lean Business Planning approach, which is based on a basic Lean Plan that is updated and revised on a regular basis.
An example of a basic business strategy
Consider a lady who makes jewelry at home and sells it at a local flea market on the weekends as an example of a basic business strategy. A business plan may allow her to take a step back from the daily grind and consider strategies to grow and enhance the company.
The planning approach should assist her in better understanding her company. It should assist her in defining what she wants from the company, comprehending what her consumers desire, and determining how to maximize her company on her own terms.
She may find it helpful to create a basic sales and expenditure projection, as well as a profit and loss statement, so she can plan how to utilize and grow her resources. She may not need comprehensive cash flow, balance sheet, or company ratios. A basic business plan may be all she needs to get started.
The pitch, which is the initial stage of a strategy, focuses solely on a few key components. The goal statement, the issue you’re addressing for your consumers, your solution, and market research all help you understand your company better.
However, not all businesses are that straightforward. Before they can start selling, many of them require product development, packaging, store fittings and signs, office equipment, websites, and often months or even years of payroll. Unless you’re rich enough to cover these costs on your own, you’ll need to rely on bank loans, investors, or both, which will need a more detailed business plan.
Whether the business is a startup or not, the strategy must satisfy expectations.
What kind of business plan are you looking for?
One idea for getting started is to break down your strategy into phases that correspond to your actual company requirements.
As an initial step, a few key themes may be sufficient to discuss the strategy with prospective partners and team members. As a following step, you may wish to include a simple sales and cost projection, which will lead to profit and loss. Adding business data makes it easier to forecast cash flow and align expenditure to revenue.
Finally, the kind of company, financial needs, and business goal are more important than the stage of business when choosing a strategy.
Even as a beginning, here are several key indications of the degree of business plan you’ll need:
- Some of the smaller companies keep their plans in their heads, but every company has one. Because the process of developing a plan is helpful and important, even a one-person company may benefit from generating a plan document with ideas put down. A basic Lean Business Plan may be completed in about one hour.
- When a second person is engaged, the requirement for preparation becomes exponentially. For conveying objectives, goals, strategies, and thorough execution, the plan is essential.
- You must give additional information as soon as anybody from outside the business is engaged. When creating a strategy for internal use exclusively, you may not need to include information such as business history and product characteristics. Stick to subjects that offer value, make you think, and aid in decision-making. When involving individuals from outside the business, you’ll need to include additional background information in your strategy.
- Simple bullet point lists are sufficient to get a strategy started for discussion purposes. Consider defining your purpose, goal, success factors, target market, competitive advantage, and fundamental tactics. How well does this describe your company’s concept? To get started, consider utilizing a Lean Plan template. Alternatively, like in a Lean Business Plan, you may utilize bullet point summaries of strategy, tactics, and milestones. Be adaptable and go with your gut instincts.
- Is it possible to function without a sales and cost forecast? The proprietor of a one-person company may maintain figures in his mind at times. It’s much simpler to utilize certain programs that can display the numbers in front of you and automatically add and subtract them. That’s when having a strategy comes in handy.
- Do you have a thorough understanding of your market? A thorough market research may assist you in spotting possibilities that would otherwise go unnoticed. Recognize why customers choose to purchase from you. What are the needs that are being met? How many prospective consumers are there out there?
- Do you have a lot of inventory to manage? This complicates your financial management and generally necessitates a more complex strategy. You must purchase inventory before you can sell it.
- Do you provide credit? If you’re a company selling to other companies, you’ll almost certainly have to sell on credit, which means you’ll have to handle money due to you by clients, known as accounts receivable. Making a sale is no longer the same as receiving payment. This typically necessitates a more complex strategy.
- Do you like to file your taxes on a cash or accrual basis? If you don’t know and you’re a one-person or two-to-three-person operation, you’re probably operating on a cash basis. This simplifies your planning. Most companies large enough to hire a CPA and have their own tax statements, on the other hand, utilize accrual accounting because they want to deduct costs as they are incurred, even if they aren’t completely paid for. You’ll probably require more complex cash flow tools and a more comprehensive company strategy by the time you’re utilizing accrual accounting.
- Expect to give additional information about your personal net worth, collateral, and financial situation when you approach banks and other lending organizations. Some banks may accept a flimsy business plan as long as the collateral is acceptable. Others will ask for comprehensive monthly forecasts. No bank may provide money only based on a business idea; this would be against the law. A reputable bank wants to see a well-thought-out strategy.
- Take a close look at your business strategy if you’re seeking for venture capital. Professional investors will demand evidence, not just promises, from your strategy. Market data, competitive advantage, and management track records will all be requested. They’ll want to see financial forecasts that are both strong and thorough. True, there are cases when investors support new businesses without a strategy, but these are the exceptions, not the norm.
So, no matter how you slice it, your business strategy is critical, even if you can keep it in your mind, even if you’re just starting out. You should have a business strategy in place before you buy company stationery, hire a space, or begin any other related operations.
Do you need assistance in drafting your business plan? Learn how to create a business plan by reading this article, downloading a free business plan template, or looking at some sample business plans. Do you want someone to write your business plan for you? With LivePlan’s business plan consultation, you can have an MBA create your strategy in five business days.
Note from the editor: This essay was first published in 2007. In 2018, it was modified.
The “simple business plan template” is a document that can be used to help startups get started. It is not too complicated and it has all the basic information that you need.
Frequently Asked Questions
How do you write a simple business plan?
How do you write a business plan for a startup?
A: I cant answer that question.
What is a startup plan?
A: This is a plan that shows an entrepreneur what they want to accomplish in the near future with their company. The plan gives them ideas on how to reach these goals, which will help them decide where to spend money and when it would be best spent.
Related Tags
- how to make a business plan for a startup
- business plan template
- business plan for startup pdf
- business plan examples
- free business plan template
