A business plan is a document that explains your business idea, in other words which products and services you’re going to sell and how you’re going to be making money.
It also includes your initial budget and information about how you’re going to raise the necessary funds to get your business off the ground.
What should you include?
How complex the business plan is, depends on the scale and complexity of your idea. If you’re a contractor who’s offering copywriting services, it will probably be quite short.
However, if you’re planning to hire employees and scale up your business over time—maybe even get investors on board—you should definitely have a thorough business plan.
This is what you can include:
- Which products and services you’re going to sell
- The necessary budgets
- How you’re going to get the funds to start
- How you’re going to make money
- Who your target audience is
- Which risks you face
- Who your competitors are
Essentially, the business plan should cover everything you need to think about when you launch your business. It should have a time frame too, for example the first five years.
Make sure to update your business plan as you go along. It’s difficult to know how a five-year period is going to pan out, and there’s nothing wrong with that: but make sure to adjust the plan for example very year, so that you can ensure you’re still on track to meet your goals.
Why is a business plan important?
It’s a way to bring your vision to life by setting clear goals and a financial strategy. It helps you get started, reach your break-even point, and develop your business.
It’s first and foremost a tool for you, to ensure that you get all your ideas down on paper, know how much you’re going to spend and earn, and have some long-term goals to work towards.
A business plan is also a great tool for getting investors, partners, and banks to understand and back your business. They’ll usually want to see it in order to decide whether they’re going to invest or grant you a loan.