Did you know that 3 out of 10 businesses fail within the first two years of their establishment? One major reason behind the failure is the lack of planning.
That’s why it is important to write a business plan that works for you and guides you through every stage of establishing, running, and growing your business.
Read this post to:
- Understand what a business plan is.
- Learn how to write an online business plan.
- Find a business plan template that you can use.
- Discover a free online course on creating a functional business plan.
Let’s get started.
What is a Business Plan?
A business plan is a written document that acts as a roadmap for the operational, management, financial, and marketing standpoints of your company.
A good online business plan should define:
- The core values and objectives of your company
- How the company plans to achieve those goals
- Products and/or services along with your unique selling proposition (USP)
- Financial budget and funding plans
- Startup and ongoing costs
- Major challenges and possible pitfalls that you may have to deal with
- Marketing and growth strategy
Usually, all entrepreneurs create a business plan at the onset of their startup business. However, it’s never too late to document a business plan for your small business.
And, it’s not a one-time affair…
As a brand consultant, I always recommend that business owners review and update their business plans periodically. This will help you ensure that your plan is relevant to the current goals and direction of your company.
Wondering why it is so important to document your strategy and processes in a business plan template?
I’ll tell you why.
Why Is It Important to Write a Business Plan?
Writing your strategy and processes in a well-documented business plan format can help you attract both investors and business partners.
With a good business plan, you can easily:
- Identify potential pitfalls in your business plan by having an expert review it for you.
- Secure funding for your business by proving the viability of your business and showcasing its growth potential to potential investors.
- Make informed decisions about the financial matters, management issues, competitive strategies, and sales and marketing plans of your business.
- Communicate your ideas to stakeholders, business partners, vendors, as well as your potential customers.
- Attract the right talent that can help you achieve your business objectives.
People are more likely to trust a documented business plan than just a mere description of how you plan to grow your business.
But for this, you need to ensure that your business plan clearly defines your vision, short-term and long-term goals, products and services, target audience, revenue streams, future opportunities, and more.
Unsure about whether or not your plan outline is clear enough?
Don’t worry. I’m going to discuss the two main types of business plans that entrepreneurs create and the key elements to include in each of them.
Meanwhile, you can also check out this online course by the Online Business Academy. It will guide you through the process of drafting a very functional business plan.
And the best part?
You can enroll for free and get access to a one-on-one coaching session with an expert and 5 useful resources as well.
How to Write a Business Plan (And the Key Points to Include)
There are two popular types of business plans according to the U.S. Small Business Administration (SBA), including:
- Traditional plan
- Lean startup plan
In this section, I’ll help you understand the use and business plan format of each of them, one by one.
How to Write a Business Plan Using the Traditional Plan Format
A majority of entrepreneurs create traditional plans, making them the most commonly-used business plan format.
The traditional business plans are very detailed, take more time to write, and are comprehensive. Most lenders and investors request this plan.
To help you write an online business plan in this format, I’ve created a traditional plan outline for you below. You can use these section headings as is, or customize them according to the needs of your business.
Briefly talk about what your business is all about and why it will be successful. In this section, you should include:
- Your mission statement
- Product or service
- Basic details about your management team and employees
- Financial information and growth plans (especially, if you want to attract outside funding)
Write a detailed description of your business, explaining:
- What problems will your business solve?
- Who is your target audience?
- What are the competitive advantages of your product or service?
- Do you have enough financing to get started?
- Are you an expert in the field?
Basically, you should use this section of your online business plan to boast about the strengths of your business.
Market Analysis and Competitive Analysis
For this section of your online business plan, you’ll need to conduct thorough market research and find answers to the following questions.
- Who is your target audience?
- Is there a demand for the product or service you want to offer?
- What are other businesses doing?
- What is working well for your competitors?
- What are your competitive strengths against them?
Also, check out the top competitor analysis tools that can help you benchmark your website against your competitors.
Organizational and Management Structure
Use this section of your online business plan to tell readers how your company will be structured and who’ll make all major decisions.
You should include details about:
- The legal structure of your business. Do you want to form an LLC (limited liability company) or will you incorporate your business as a Corporation?
Regardless of the business structure you choose, you can hire experts at GovDocFiling to handle the business formation legalities and paperwork for you.
- An organizational chart to showcase the hierarchy and roles and responsibilities of all key members of your team.
Your Product or Service
Though you’ll talk about your product or service briefly under the market analysis section, this is your chance to share more details about it.
- Which product or service will you offer?
- How will your product or service benefit your potential customers?
- Will you resell products from existing brands? Or, will you develop and launch a new product line?
- Will you do product research and development?
- Will you need a copyright or patent for your product or service?
- How will you price your product or service?
- What is the USP of your product or service? How will it stand out from your competitors?
Also read: How to ace your product launch process
Marketing and Sales Plan
Your marketing and sales plan is likely to evolve with time. In this section, you should:
- Write how you plan to promote and sell your product.
- List the key features of your product that you’ll use to attract potential customers.
- Talk about how your product or service will make the lives of people easier.
- Describe your customer acquisition strategies.
- Finalize a marketing budget for a year or the upcoming quarter.
Make sure that you revisit this section of your online business plan frequently and optimize it based on the results your marketing campaigns drive.
The financial plan section is one of the most important sections of all business plans. The goal is to convince potential investors, business partners, and others that your business is viable and will be a financial success.
You should include details about:
- Your business resources
- Company properties
- Any loans or debts
Once you set up your business and start its operations, you should come back to this section of your online business plan and include:
- Your business income statements
- Balance sheets
- Cash flow statements
You should also define your planned financial projections for the upcoming years.
If you’re just starting out, it will be a good decision to describe your quarterly or monthly expenditures and revenue expectations.
Pro tip: Leverage graphs and charts to illustrate your financial plans.
If you want to secure funding, this is your space to outline:
- How much funding you’ll need for the next five years (year-over-year plan)?
- How will you use each part of the funding?
You should carefully plan how much funds you’ll need to keep your business running till your start making profits. Think about employee wages, overhead expenses, equipment or tool costs, etc.
Use this section of your online business plan to provide:
- Documents that show your credit history
- Product photos
- Letters of reference
- Business licenses and permits
- Other legal documents
- Important contracts
That’s all of the key elements of traditional business plans.
However, to write a very functional business plan, I’d suggest that you take this course by Kim Garst: “How to Write an Online Business Plan That You’ll Actually Use”
She’ll help you build a plan that actually works for you and helps your business grow in the online world.
And the best part?
You can enroll for free today! Enroll here.
How to Write a Business Plan Using the Lean Startup Plan Format
The lean startup business plan format is for entrepreneurs who want to create a condensed, one-page business plan.
These business plans are less common when compared to traditional business plans. They focus on summarizing only the key elements of your business planning.
Lenders and investors may ask for more information about your business.
Let’s take a look at a lean startup business plan template that you may use to create your business plan.
List your business partnerships – vendors, product manufacturers, contractors, marketing services, etc. in this section of your lean startup business plan.
Talk about the competitive advantages of your business in brief.
- How will you sell your product or service?
- Why will consumers choose your product or service instead of the competition?
This section of your online business plan should list all of the key resources of your business, including:
- Your employees
- Company property
- Digital tools
- Other resources that can help you provide value to your potential customers
Write a statement defining the unique value proposition (USP) of your business. What do you offer your target market that no one else does?
Define who your target consumers are.
State how your customers will interact with your business. Will you use automated chatbots or hire real people for all customer interactions?
Define the channels you’ll use to interact with and engage your prospects and customers. You can use a mix of channels such as email, social media, a Shopify store, etc.
List the most important operational costs of your business including office rent, technology, utilities, marketing expenses, etc.
Explain how your company will make money. If you want to create multiple revenue streams for your business such as direct sales, affiliate sales, website monetization, etc., list all of them.
While these are the key elements to include in your lean startup business plan, you can also take a free online course on, “How to Write an Online Business Plan That You’ll Actually Use.”
Be sure to share your learning experience with me.
1. How do I start an online business plan?
To start writing an online business plan, you should:
- Come up with a solid business idea and validate it.
- Establish your business goals.
- Conduct market and competitor research.
- Understand your audience.
- Finalize the legal, operational, and management structure of your business.
- Determine your business plan format (traditional or lean startup).
- Start writing.
2. How do you draw up a business plan?
You should use the traditional business plan outline if you want to draw up a detailed business plan. It will include:
- Executive summary
- Business description
- Market analysis and competitor analysis
- Organizational and management structure
- Your product or service
- Marketing and sales plan
- Financial projections
- Funding requirements
If you want to create a condensed, one-page business plan, you should use the lean startup business plan outline which includes elements like:
- Key partnerships
- Key activities
- Key resources
- Value proposition
- Customer segments
- Customer relationships
- Cost structure
- Revenue streams
You can enroll in this free online business planning course to learn more.
3. What is a basic business plan?
A basic business plan is a documented roadmap that guides you through the process of starting, running, and growing your business. It includes details about the organizational, managerial, and financial plans of your business.
4. What are the contents of a business plan?
The main contents of a business plan include an executive summary, business description, market analysis, competitor analysis, organizational and management structure, marketing and sales plan, financial projections, and appendix.
5. Can I write a business plan on my own?
Yes, you can write your business plan yourself. You can also hire business consultants for professional advice.
Ready to Draft a Solid Online Business Plan for Your Startup?
Creating a solid online business plan boils down to:
- Which product or service will you offer?
- What do you need to set up and run your business?
- Who are your customers?
- How will you serve your customers and through which channels?
- How will you make money?
While I’ve listed the standard outlines of both traditional and lean startup business plans already, getting some extra knowledge won’t hurt, right?
So, what should you do next?
- Choose a business structure and name your business.
- Identify the best digital marketing strategies you’ll use for your startup business.
- Enroll in this no-cost business planning course.
- Write your online business plan.
Do you have questions about writing an online business plan? Reach out to me for expert advice. Leave your thoughts in the comments below.