Once you've settled on an online business idea, the next step is creating a business plan. A well-written business plan will support your business as it grows, and act as a blueprint for decision-making over time. Read on to learn how to create a strategic business plan that supports your long-term goals.
What is a business plan?
A business plan is a written document outlining every aspect of your business: what it is, your goals, how you plan to grow, financial forecasts, market research, and strategies. A business plan serves two main purposes as your business grows:
Business plans can be shared with potential investors or used to attract funding, because they include detailed road maps to profitability and analysis of financial needs.
A business plan can be used internally to keep you on the right track and as motivation during tougher moments—or show you any weak spots where you need to bolster your analysis or tighten your business focus.
Ideally, a business plan should be written in direct, plain language that anyone can understand, even if they're unfamiliar with the industry.
The parts of a professional business plan
When you're starting out, you might not be able to fill out every single section of a business plan. If you aren't at a place yet where a lengthy document makes sense, creating a one-page business plan is a good alternative. Some experts even recommend first writing a shorter, condensed version of a business plan to share with trusted colleagues for feedback and refinement before diving into a longer, more detailed plan.
Business plans should contain the following sections:
Think of an executive summary as how you might describe the ins and outs of your small business to a stranger. This is a high-level look at your company—what it is, what it does or sells, and its overarching goals—that also includes a brief overview of the information covered in detail in the rest of the plan. Later sections will be more robust and detail exactly how you plan to operate. In fact, many people find it easier to write out the more detailed plan first and then pull the most important points out for the executive summary. As a rule of thumb, keep this section under two pages.
This is a deeper dive into your company, including its mission and vision, location, and other details.
Products and services
What are you selling or what products are you offering? Be as detailed as possible about your angle and approach. For example, instead of selling "drawings," specify that you sell "hand-drawn artwork." If you have a unique aesthetic, or focus on just one area of merchandise, share that too. You want to be clear about what makes your online business unique.
This section of the business plan is all about research. A competitive analysis is a deep dive into the other companies operating in your corner of the business world. Look at their growth and financials, and show where your company fits in. What makes you different from other companies? What is your opportunity and your advantage?
A market analysis considers the market as a whole, not just your immediate competitors. You can also include an industry analysis, looking at whether your desired business area is growing, poised for a turnaround, or in a slump.
Customers are core to any online business. This section can outline the personas of your ideal customer and the best ways to reach them, as well as the typical customers of competitors.
A marketing plan focuses on promoting your business to the outside world. Drawing on the analysis from above, this forward-thinking plan contains information on how you intend to grow by using strategies such as social media, advertising, content, and events. Marketing plans and strategies change often, so don't be surprised if this section of your business plan evolves.
Management and organization
This section becomes more important as your business grows. It includes an organization chart, complete with bios that capture your expertise as the founder, and the skills and achievements of your employees.
Financial plan and outlook
From startup expenses, to potential capital infusions and profit and loss information, this section contains the financial outlook and projections for your online business. This section's composition will vary depending on your stage of business development.
The appendix is a place to add information that didn't fit in the rest of the business plan, or elaborate on any important points in a previous section. For example, you can cite sources for your competitive research, or include more thorough breakdowns of your market analysis.
Learn more about how to build the foundation for a successful brand.
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