Why is a business plan important? It helps business owners explore a business opportunity, create strategies to operate successfully, and guides them toward their goals. It is an important tool used during the valuation of a business and financial institutions as well as investors usually insist on reviewing one before making an investment. And, according to research, having a business plan can help companies grow up to 30% faster!
Why write a business plan? Imagine two people take a trip to the same destination in separate vehicles. They have never been there before, but only one person has a map to get there. Who will get there first? The person with the map, right? Yes, the person with map may arrive first because they have more information than the other. The person without the map may still arrive, but what do you think their experience will be? Why will it take them longer to arrive?
Your business plan serves as an important guide for your business. It can help you to visualize how your business will be operated and make strategic decisions to best allocate your resources.
If you are thinking about starting a business, consider drafting a one-page business plan as a starting point. Like many business owners, time is limited so a simple plan can help you develop a vision to stay focused on achieving your goals and determine if moving forward is worth the investment.
Creating a one-page business plan is easy. The best entrepreneurs stay true to a vision and find a way to overcome challenges that get in the way. This plan will help you stay on course toward your goals.
A few key tips before getting started:
- Write down your goals before investing in them.
- Review your ideas often and take time to think them over.
- Your plan is a living document, so update it regularly.
- Share it only with people you trust.
- Be as specific as possible.
- Commit to your strategies but stay flexible when it is time to pivot to your next move.
To draft your one-page business plan, start by answer these five key questions:
- What does the future look like? This is your vision for the business idea. What is special or different about your business from your competitors? What does the future look like for your business in the next five years?
Example: We have more than 15 years of experience and education. We are leaders in our industry and continuously innovate news ways to do better. We plan to grow from local market to national in five years.
Also, think about your objectives. What do you want to achieve? How will you measure success and by when will you hit your goals? (Be specific, measure it, and put a deadline.)
Example: Use revenue goals, number of customers, company size. The more specific the better.
- What is your mission and who buys from you? This is the mission of your business. Why do you sell this product or service? What do you promise your customers every time they buy from you? Who is your ideal client? Where are they and how will they find you?
Example: Amazon’s mission is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
- What do you sell and what is your profit margin? What product or service do you plan to sell? Write a list of what you sell along with the prices you plan to charge your customers. Make sure you also list what your profit margin is on each item.
Example: List the category or item on a chart, identify what it costs you (cost of goods), and what you charge for it (retail or wholesale).
- How will you sell it? This is your strategy. What do you need to do to be successful? Who do you need to connect with? What is the best way to promote your business?
Example: Using social media as your main platform to drive customers, investing in digital ads, or attending networking events.
- Getting started, what is your action plan? It is time to put it all together. What are the steps you will take in the next 30, 60, 90 days and 1 year?
Use this guide to help you develop your one-page business plan. Grab a notebook or use your favorite software to write your goals. Keep it close as you work toward your objectives. Once you are ready to present your plan for a formal investment, type your plan on a document with your personalized header. And by all means, enjoy writing your business plan. In it is the story of how you will become successful with your business.
EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.
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