Creating a business plan should be a top priority for entrepreneurs who are just starting out their journeys and for those who already have a well-established business. The trouble is, the ins and outs of how to write a business plan aren’t always crystal clear. But fear not! We’re here to help.
You’ve probably heard a lot of stories about a small entrepreneur who had nothing but a vision in one hand and a dream in the other. Then, in a leap of faith, that entrepreneur just “went for it” and, lo and behold, success came knocking.
It’s a pretty story, no doubt. It can also be inspiring, but―as any real entrepreneur can tell you―it’s not exactly true.
Starting a business involves a lot of decision-making, risk-taking and some careful consideration: from deciding on a business model to shopping for a domain, working on product development, taking photos of your products, actually selling those products and, of, course, keeping an eye on the financial health of your business to make sure you won’t go into debt.
It’s definitely a lot of things to handle all at once, so having some sort of roadmap or guiding light would of course be really helpful. Right?
Well, yes! And that’s exactly where a business plan comes in. Creating a business plan is not just about creating an important document; it’s about creating your own roadmap to help you keep track of your progress, record important milestones in your store and plan accordingly for the goals you wish to achieve.
Not only is it a strategic asset for any business to have, but it’s also a map that you get to build yourself so you can reach your desired destination.
So get ready to “go into the map”, like Joey did, and check out how to write a business plan!
Before you start writing a business plan, you need to find the perfect business idea. We’ve selected a few guides that can help you with that:
A business plan is a more robust “About Us” page, since it’s first and foremost a piece of writing that presents a business, its founders, its origins and collaborators.
It’s also a crucial document for any business to have, as it can be used for presenting your business not to customers but to two very different audiences:
Business plans almost always include financial projections about a business, because this is the kind of data that shows bankers and investors which type of “R” you are: Risky or Reliable.
This is one of the reasons why writing a business plan is so important if you’ve got your eyes set on securing loans or a credit line. It’ll help you show how your business has been faring, money-wise, and possibly help to attract potential investors interested in your idea.
It’s also a great document to show potential partners, like influencers, designers, suppliers and marketing teams because it can help them get acquainted with the brand and better understand your business idea and the brand’s values.
If you’re planning on scaling your business anytime soon, you’ll undoubtedly need to bring in new people to your company. This means diving into an onboarding process, which tends to take a long time because it’s normally filled with small details that new hires need to learn about the brand and the company.
A business plan can help streamline this process because it’ll give new collaborators an all-in-one look about the brand: from the company’s history to team members, yearly revenues, net income and a whole lot more.
This is exactly why a business plan is a “robust” document. After all, it needs to go beyond a couple of paragraphs that contain a company description and actually discuss topics like:
How a company operates
How it makes sales
How it distributes profits
What its sales forecast is
How it markets its products
How its supply chains work
Who makes up their target market
If scalability is something that you’re eager to tackle on your business plans, check out the posts below and don’t forget to watch the video we picked out for you:
As we mentioned earlier, a business plan is a written document. It’s also a document that needs to contain a lot of different information, which means that it can have anywhere between 10-25 pages.
This is nothing you should worry about. Many expert investors and bankers state that the size of the document shouldn’t matter, as long as the information contained inside it is accurate and detailed.
However, it should be noted there are two different types of business plans. One is more on the traditional side, while the other is usually called a “lean” plan.
The traditional business plan is the more established version and the one you’ll likely encounter online while you search for tips on creating a business plan.
It’s considered the more “comprehensive” model, since it encompasses detailed info and even some supplemental or extra documentation, finance-wise: Cash flow statements, in-depth financial statements and any other documentation that proves how established a company is, like a local operating licensing.
Traditional business plans are usually the ones that come into play when we’re talking about how to attract investors and get funding for a business―which is why they contain such a high level of detailed information.
The lean business plan, for its part, is widely thought of as the document a company presents to any new hire or collaborator.
The difference lies exactly in the amount of details that are shared inside the business plan, which has a direct impact on the size of the document. While a traditional business plan can easily have some 25 pages, a lean business plan will likely have around 15.
If you’re a new business and your main goal for writing a business plan is to get funding, check out the video below:
Timing can be a tricky thing, especially when it comes to ecommerce stores―not least because each specific niche has its own particular demands and metrics.
Our recommendation, though, is that you start creating a business plan as soon as your store is up and running. That way, you’ll have a base document that’ll allow you to record everything that your business was able to achieve.
Unsure as to how you should start the writing process, since you still won’t have a lot of data to share? No worries. You can start by writing the three cornerstone elements of a business plan: mission statement, brand’s story and value proposition.
You don’t need to worry about data, sales or profit to write those. Rather, you can write from the heart, stating your goals and why your brand and your products are different from everything else that’s currently on the market.
Interested in learning more about niches before tackling how to write a business plan? Be sure to check out the posts below:
There are literally hundreds of tips on how to write a business plan online, and some websites even offer a business plan template for anyone that’s interested in getting down to business as soon as possible.
However, we are firm believers in the idea that simplicity is always the best alternative―and the thing with working directly on a business plan template is that those documents won’t necessarily reflect the reality of your own shop.
This is why we’ve broken down all of the info around creating a business plan and divided everything into four main categories. Each category is pretty simple and can be worded as a question, so you can better accommodate your writing topics.
A business plan is a document about a business, and that’s exactly why its first pages involve a thorough company description. Normally, it’ll have topics like:
This is the part of the document where you should clearly define topics like market research, competitor analysis and even a SWOT analysis. It’s also a good idea to include any documents that prove under which model you operate: if you’re a limited liability company, a sole proprietorship, a partnership…
Another tip is to make sure you highlight what your competitive advantage is in comparison with similar brands, and why your business idea is a good fit with the target market you’re aiming at.
Want to learn more about market research? Check out the video below:
After the company description, the second topic you should tackle in your business plan is the what. This means defining just what it is that your business sells, how much you’ve sold and/or how much you’re planning on selling for the next year or so.
It should also include topics like:
A description of your products or services: What they’re made of, how they are made and where you’re sourcing them from.
Their pricing: How much are you charging per item and how you’ve decided on that specific price range.
How do you sell and how those sales channels work: Go through your entire operations and mention the step-by-step of selling online via your own website, selling on Amazon or other marketplaces, or in person.
How much you spent on marketing strategy, and what results you were able to achieve with marketing campaigns: Show the full timeline of your campaigns, describe what your plan and marketing budget was, what got made and the metrics that were obtained.
How you market your products or services: If you sell on social media, this is the part where you should list the platforms, describe the campaigns and indicate if this is a strategy that works well for your target market.
How do you generate revenue and how much revenue it’s being generated on a monthly basis. If you’re working with affiliate marketing, for instance, now is the time to mention it.
How this revenue is redistributed and/or re-applied to your business.
Sales forecasting: How much are you planning on selling. You can create different forecasts for different periods or occasions. For instance, a sales forecast for special holidays or dates like Mother’s Day, another for the upcoming semester and another one for the upcoming year.
This is the part where business plans start to get a bit more “technical”, and it doesn’t matter if you’re writing a traditional business plan or a lean one.
Remember: This is one of the topics potential partners and investors are most interested in, so try to include as much detailed info as you can. List cash flow statements, financial statements from your bank, income statements and, more importantly, financial projections for the next semester and/or years.
However, you’ll still be able to cover a little bit more about sales and money in the last topic cluster of your document, so don’t stress that much over this stage of writing a business plan.
Now that the company description part is done and the product part is done too, the third step of creating a business plan is writing about how those two topics connect.
Yep: That’s right. This is the part where you’ll write about everything related to your logistics.
Ideally, you’ll need to describe and detail elements like:
Your business model: Are you dropshipping? Making your own products in an artisanal fashion? Working on retail? Explain the model you’re currently working with and detail whether or not you have plans to expand this model later on.
Production process: Describe how your suppliers create your product or, if you’re making the items yourself, indicate the step-by-step of how they’re made.
Your suppliers: Include the proper documentation to show that your suppliers are legit businesses with the correct licensing to operate domestically or internationally.
Warehousing and shipping policies: Describe your order fulfillment process, highlighting everything from inventory management to packaging and shipping.
Return policies: Indicate what your return and exchange policies. If possible, list some specific cases with real-life customers to show how you were able to handle that.
Business insurance: If you have insurance for shipping or for your whole company, list it here.
This one is, undoubtedly, the part that the majority of entrepreneurs struggle with when writing business plans―not least because it’s the one where you’ll need to deal with the nitty-gritty of your finances.
Among other topics, you’ll need to write at length about:
Just because you’re writing a business plan to wow potential partners and investors, this doesn’t mean that you should leave out the bad and the ugly.
In fact, discussing elements like strong competitors, sales mishaps and a marketing strategy that backfired or simply did not work can do wonders for your business plan―especially if you figure out how to properly write the solutions you came up with.
The idea is that you mention what went wrong and then concentrate on what you did to solve it; this shows resilience and it can definitely impress your readers. Also, don’t forget to include documents like your profit and loss statements to prove just how you were able to fall back on your feet.
Here are two recommended reads to get you on the financial mindset:
Besides working on the four topic clusters that were described above, it’s also a good idea to include two extra sections and one special touch in your business plan―whether it be a traditional business plan or a lean one.
The executive summary should be right at the beginning of your business plan, appearing before the company description. Generally speaking, it can be pretty short (one page is more than enough) and it should provide readers with an overview of your business plans.
Many experts say that the executive summary should also function as your “elevator pitch”, which means that it should be the perfect blend between a mission statement and a business idea. The goal is to entice investors and partners right on page one, and get them interested in what you have to offer them.
You can turn your mission statement or your About Us page into your executive summary. Take Shoplazza’s own two-liner description, for example: It’s short, but it tells potential customers and partners everything they need to know about us. It’s also a great conversation starter, which is exactly the path you want to follow when crafting a successful business plan.
If the executive summary effectively “opens” a business plan, then we should also consider the piece of text that will “close” that document: the appendix.
An appendix is a mainstay in more traditional business plans, but it can work pretty well inside a leaner document. It’s also a great piece of text to have because you won’t need to actively write anything new; all you’ll have to do is include any supplemental documents that support the claims you made when creating a business plan.
To recap: The executive summary is a one-page pitch about your business and it should be compelling, engaging and inviting, since its goal is to attract readers.
The appendix, for its part, is the closing section of almost all business plans and it includes supporting documents that show you’re not just pulling numbers and profits out of thin air: bank statements, income statements, any past funding request, copy of previous contracts and so on.
Another thing that can make business plans really stand out are visual elements, like photos of your store, pictures of your team and, more importantly, flowcharts and any other graphic projections related to your business.
You can, for instance, open up your executive summary with a nice shot of your team or your product, and then include flowcharts to support your financial plan and sales forecasts. This will help attract investors and partners, since they’ll have an easier and more intuitive reading experience.
Business plans can be a bit tricky, but there’s no escaping them. They’re crucial documents to have if you’re on the hunt for new funding, new talent or new partners―but they can also be extremely helpful for entrepreneurs who want to conduct proper business planning and make sure they got every aspect of their business down in print.
The decision to go for more traditional business plans or leaner formats it’s entirely up to you. Consider your short-term and long-term goals, as well as your niche’s particularities, and when you feel it’s time, just get in front of that blank page on your computer and fire away.
And a final reminder: Don’t forget to properly assess thorny topics like market analysis, target market, business strategy, competitive analysis, company plans and business administration.
Happy writing and planning!