Food truck, service provider, artisanal cheesemonger: no matter what your hustle, drafting a business plan is the first step to becoming legit. Here are the essential parts of every successful business plan.
You'll write this at the end, as a summary of both your plan and your business. If you're planning to apply for a loan or court investors, this section is also a sales pitch. Even something as humble as a one-woman kitchen table operation deserves a shine on its business plan, and a good summary does just that.
Be prepared to work on your business "story" here (pro tip: this is also your brand). From explaining that first spark of an idea to the evolution of the business as it is today and where you want to go from here, you want to create the impression of a solid venture and an owner who knows what she's about.
If you're not into statistics, that's okay. Start with an evaluation of your business. What industry does it belong in or cater to? Who is your ideal clientele? Again, this information will be crucial when it comes to building your brand, as well as advertising. You need to know what you do and who you do it for.
Once you're clear on who your target customer is, research her. Consumer trends for any industry are available online, and you can talk to people you know who fit the bill. Knowing what your ideal client is looking for, what they buy and how much they spend will help you determine how to make your business competitive. Good for you, of course, but also something your bank or investors will want to see.
This is the meat of what your business really is — not just what you do and the product or service you provide but the way in which you do it. A fair amount of this will flow from your market analysis: you'll speak to who and where your target clientele is and what needs of theirs your business can meet.
A clear understanding of what you do and how you differ from the competition is crucial to launching a business successfully. Think of the creation of all parts of a business plan as more than homework. This is the research you'll need in order to define yourself.
For folks starting their business with a partner, group of investors or board members, defining the structure of your business is necessary for legal reasons. Having employees is another legal (and insurance) consideration. Investors and money lenders will want to know if this is a sole proprietorship, an LLC, a corporation or some other structure.
Even if you're totally never going to take on even one employee, take a minute to think about what-ifs. Like, what if your business really starts to take off? And that friend of yours who's a bookkeeping whiz offers you her services? Are you going to pay her as an employee or an independent contractor? Either choice involves knowledge and paperwork. Not even solo-preneurs can afford to skip this part of a business plan. It pays to cover those potential what-ifs.
So you know who you are, what you do and who you want to do it for. But how are you going to tell them about it? Your market analysis comes into play here, because if you find your ideal client prefers Instagram over Twitter, at least one of your marketing strategies should include Instagram-centric ads. This is one of the key parts of a business plan because it shows investors you know what you're talking about when it comes to productive advertising.
You can also discuss distribution here as well. For a traditional storefront, this will be how you handle sales in-house, among other things. If you provide a freelance service, it will be explaining your payment and delivery policies. In other words, follow the path of your customers' money, from their pocket to yours, and how you're going to make it move.
This is an opportunity to go into detail about that thing you make, the experience you'll create or the service you provide. It doesn't have to be dry. You can let your passion shine through here and be honest about the drive behind it.
This is one of the main parts of a business plan because it provides that information as well as the gritty details about where you'll get your own supplies, cost and budgetary analyses and also any intentions to expand your offerings in the future.
Showing you know the market and have anticipated startup costs reassures investors and lenders that you're prepared and have a chance at succeeding. You need to include approximate costs, like equipment and licensing, and anticipate general overhead, like utilities and payroll.
You can project what growth might look like for you over one to five years by looking at the average growth rates of similar businesses (i.e. your competitors). Pair this information with a breakdown of personal financials and the debt you'll begin with to give a clear picture of what you need to break even.
Every business needs a plan, no matter how small your operation. Actually putting down your thoughts and plans, together with the research needed to answer some key organizational questions, makes you really think about what you want to do and how. Think of these seven essential parts of a business plan as the ultimate game plan for your hustle.
Heather Adams is a creative content & copy writer with a focus on business storytelling.