Writing a business plan is a vital part of any business. After all, it helps you establish your company’s vision and mission while clarifying exactly how you plan to grow. It can also help create more work-life balance at home if you have a plan for your work.
Besides detailing your business’s overall strategies, you can include information such as how much money you expect to make in the first year and how many employees you plan on hiring during the initial stages.
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Whether you're writing an informal or formal business plan, this guide will review some basic steps you'll want to follow to find success in 2023.
The Executive Summary
The executive summary is a one- or two-page document that introduces your business plan to potential investors, lenders, and other interested parties. The purpose of this document is to quickly and effectively communicate what your business plan covers and what you want to accomplish with it.
Start with a brief introduction that explains what the document is about and why it's important. Then go into more detail about your goals and objectives, the market research you've done, and how your plan addresses those goals. Include any key financial figures in the executive summary as well, such as projected sales figures for each year, etc.
End on a strong note, emphasizing how your business plan will help you achieve your goals. Keep the document short and to the point, but don't leave anything out. The executive summary is one of the most critical parts of your plan; make sure it's professional and polished.
Describe Your Company Structure and Organization
The structure of your company is an integral part of your business plan. It will affect how your company operates, as well as its legal status and tax obligations. There are several structures to choose from, including:
- Sole proprietorship
- LLC (limited liability company)
How you structure your company will depend on various factors, including the type of business you're running and how many partners you have. As you grow and develop your business, you may wish to adopt a different organizational structure as part of your overall business planning.
Furthermore, you may need to change your business structure due to changes in the law or your industry. For instance, if you have an LLC and begin offering health insurance benefits for employees, you may be required by law to convert your company into a corporation. So, consider your company trajectory as you put your 2023 business plan together.
Define Your Competitive Advantage
Your competitive advantage is the reason your company will be able to achieve its goals. This might be something that only you can do or a service that beats your competitors. For example, if you're selling a service or product that no one else does, this would be considered a competitive advantage.
What makes your business stand out? What specifically is unique about you? Try writing this out in detail, including information about:
- The products or services you offer.
- Your unique value proposition (what makes your company different from the competition).
- Your ideal customer — who would want to buy from you?
It helps to create a buyer persona that personifies the ideal customer for your business. This will help you create a compelling value proposition for them and ensure that your marketing efforts are on point.
Define Your Target Market
A target market is a specific group of people that are likely to buy from you. You can create multiple buyer personas to cater to different groups of people. Overall, defining your audience will help you determine the type of products and services you offer. When you have your target market figured out, it can go a long way toward not wasting time and energy on other digital traffic.
The best place to start is by identifying your audience's problems and needs. You can do this by conducting internet research or talking to friends and family members who fit into your target market.
Once you've identified your market's pain points, you can begin creating content that addresses that desire specifically. This can help you build trust with your potential customers since they'll feel like you've tailored something just for them.
Make a Marketing Plan
A marketing plan is a document that will help you define who your target market is as well as how you will sell your product or service to them. This can be especially useful when you're just starting and don't have a lot of experience in marketing.
It's also helpful to have an outline for future marketing efforts, so you can track whether your strategies are effective. For instance, if you plan to expand your customer base, include details or action steps like increasing advertising or creating new products or services.
Be specific about what you want to achieve with your campaign. If it's just getting people interested in what you do, focus on social media engagement and other offline activities. If it's building up brand awareness, focus on creating an online presence and getting press coverage.
Whatever you do, make sure that you are prepared with a strategy for your campaign and that it's based on your goals.
Placing Financial Projections
Financial projections are an important part of any business plan. They allow you to forecast your company's future financial position and make it easy to see what's expected from the business in the short and long term.
The first step is to create a summary table that shows your projected income, expenses, and profit for each year. This will help you see if your sales goals are reasonable and if your expenses match up with where you want to be up to 5 years from now.
You'll need to decide how much money each department needs to operate effectively. If you're creating a new software program, then you'll need programmers who can design the app and developers who can build it. You'll also need someone who can market the product so that people will know about it when you launch.
Financial projections are not the same as budgeting, but these projections will figure into the budget you create. It's also important to note that these projections will change over time as your business grows and evolves.
Spending time on your financials and budget will go a long way toward making your business more reliable, especially during a recession.
Narrow Down Your USP Even Further
A unique selling proposition, or USP, is a simple statement that describes what makes your business special. It should be easy to understand and memorable and clearly differentiate your company from its competitors. A good USP can help you stand out in a crowded marketplace, attract new customers, and increase sales.
As your company grows, your USP can be subject to regular revision and refinement. You can use it as a touchstone for all your business decisions, from marketing campaigns to product development.
Once you've identified that key differentiator, make sure it's reflected in every aspect of your business — from its name (if applicable) to its marketing materials and website design. This will help customers identify with your brand and trust that they'll get what they expect from each interaction with your company.
Set a Business Budget
The budget will determine whether your business is profitable and how much it will cost to run. This should include an estimate of your expenses, including startup costs, operating costs — like utilities and insurance — as well as marketing and advertising expenses.
Also, consider what types of expenses you might have in the future. If you're planning on renting office space or purchasing a car, include those costs in your budget.
Possible budget items to include are:
- The number of employees needed.
- The salaries for each employee.
- The amount of money you'll spend on equipment and supplies (including software).
- The amount of money you'll need for office space.
- The amount of money you'll need for utilities (such as electricity) and other overhead expenses, such as insurance premiums.
It should be comprehensive and detailed so that you can get a clear picture of how much money your business will need during the coming year. Remember to include every expense that could affect your finances, even those that seem small.
Get Started On Your 2023 Business Planning
There are no strict requirements for the format of your business plan. After all, a tremendous part of what gives a great plan its power is the clarity and flexibility of its ideas. But, if you’re going to write one, it’s important to use a format that will organize your ideas, target market, and strategies to optimize your business operations and projected expansion.
Article by Joe Martin, ReadWrite