What is a business plan?

When starting a business, you should have a business plan. We take a closer look at what that is and how you make one. 

A business often starts with a great idea. However, it’s a long way from having an idea to executing the idea. That’s why it’s important to create a business plan. 

See also: How to turn an idea into a business

How to come up with a business idea 

Let’s take a step back. First you need a business idea. 

Some people have a great business idea before they start a business. Some people want to start a business and then have to come up with an idea. 

If you already have a business idea, you need to do research and figure out how you’re going to make money and how to run your business. This is a pretty common way to start a business. 

See also: How to turn an idea into a business

If you don’t have a business idea, you need to do some research. What are your skills? What kind of business is needed in your area? Do some research and get some ideas. You don’t necessarily need a brilliant idea no one’s ever thought of. Most businesses sell products or services that already exist. 

Not sure what type of business you want to create? Here are 10 business ideas you can do from home. 

If you have an idea, you can start making a plan! 

What is a business plan? 

The short answer is: what you’re going to do and how you’re going to earn money. 

It’s up to you how complex you want the business to be. You can make it short and sweet, or you can include budgets, marketing plans in addition to your business idea. 

Need a budget template? Download our free budget template and start planning for success.

We recommend that you include budgets and a plan for how you are going to get customers no matter what size business you’re starting. 

If you plan to do freelance work you might not need to create a complex plan. However, if you’re planning to hire employees, expand, get investors and so on you need to have a business plan that explains how you’re going to earn money. 

See also: 10 reasons why you need a business plan

Who is the business plan for?

Firstly, a business plan is a useful tool for all business owners. You can see all your planning, budgeting and goals for the business. 

If you’re the only one reading your business plan, write with yourself in mind. If employees or investors are going to see it, you need to make sure it is clear, consise and easy to understand. 

How long should I plan ahead? 

When creating a business plan, it’s normal to include a timeframe. We suggest that you add goals for the next five years. If you want to get investors, it’s a good idea to include some goals for where the business should be within the next ten years. 

Changing a business plan

This is important! You can change your business plan. It’s difficult to create a five year plan and stick to it. You don’t know what the market will look in five years and you don’t know what will happen to your business. It’s totally fine to adjust your plan if necessary.