Every successful business starts with a solid business plan. This foundational document outlines who you are as a company and where you’re headed. It helps you set and track goals while also convincing banks and potential investors to provide funding.
Although business plans can vary in format, there are some essential elements and insights that all should include. In celebration of National Write a Business Plan Month, take a moment to review your business plan and make sure it addresses these key questions:
What does your business do? Explain clearly what your business does, much like you would in an elevator pitch. For instance, instead of just calling your clothing store a “women’s clothing store,” describe it as a “mid-priced boutique selling locally-sourced clothes and jewelry for women in their 30s and 40s.” This descriptive approach provides a clearer vision of your business for potential investors.
Who is your target customer? Your business plan should detail who your target customer is, specifying demographics. This may require additional market research, but it’s worth the effort as it shows potential funders that you’ve done your homework. Market research can also reveal if you need to enhance your digital presence. Consider whether the COVID-19 pandemic has changed the shopping habits of your target customers. Do they prefer online orders or visiting a physical store? Proactively address these concerns.
How will you make money? Beyond the overall idea of selling products or services, the specifics are crucial. Banks and potential investors want to see financial projections and pricing plans. If your business is new, they’ll want to know if you have any existing funding sources or if you’re starting from scratch. It’s also important to detail the costs of running your business.
What niche are you filling? What sets you apart from the competition? Within the Business Model Canvas framework, this is your “Unique Value Proposition” (UVP). A UVP forces business owners to think about the specific needs they are meeting for their customers. Answering these questions helps you step back and understand why customers would choose you over competitors, and it also helps you explain this to potential funders.
For more tips on writing a business plan, check out resources like our free How to Write A Business Plan course. You can also get free feedback from business planning experts at SBA resource partners such as SCORE, Women’s Business Centers, Small Business Development Centers, and Veteran Business Outreach Centers.
