Picture yourself deep in the woods. Days ago, you thought hiking sounded like a grand adventure. You’re excited to get started, and you’ve packed water and a few snacks.

But you forgot the compass and map.

And now you’re lost.

The deeper you get into the forest, the more you’re torn between staying planted (and waiting for the park ranger to show up!) or trekking on, without a clue where you’re headed.

An entrepreneurial journey can be very much like a hike in an unknown, scary, seemingly neverending forest.

It’s full of adventure, but if you want to increase the likelihood of actually getting somewhere,

you need a map.

That’s exactly what a business plan is – a map for who you serve, why they want or need what you’re selling, and how you make money. 

It doesn’t matter if you’re just starting out or you’re a little farther down the road: if you want to significantly increase the likelihood of moving ahead and mapping your path to more customers, impact, and profit, then mapping it all out is the perfect way to help make that happen.  (That is unless you like the idea of staying lost and stuck while you try to “wing it”.)

Ready to brave the business woods with calm confidence? Great, let’s get started…

In this article, we’ll cover: 

  • What a business plan is
  • Why you need one to grow your business faster and farther
  • My favorite templates and resources to create your own

 

So, what’s a business plan, anyway? 

Simply put, a business plan is a map that helps you plan how to get from where you are to where you want to go.  It helps you identify what you know and what you don’t know, so you can figure out how to fill the gaps. 

Let me be the first to tell you that your business plan does not need to be fancy or long.  It needs to clearly tell the story of who you serve, why they need or want what you’re selling, and how you make money.  

In fact, with many of my clients, I use the lean business model canvas, a one-page summary of the same information.  The lean canvas starts with the customer and identifies your unique value. It then helps you map your path to profits, by identifying how you attract and nurture leads, who your key resources and partners are, what it costs to run this business, and how you get to a net profit. 

Regardless of format, a business plan covers: 

  • The market opportunity – what problems do you solve, for whom 
  • Your value proposition – how you solve the problem 
  • A competitive analysis – who else does the same thing, and why you do it better
  • Your business model – how you actually make money 
  • Your go-to-market plan – how you’ll reach your customers 
  • Who is on the team (even if it’s only you) and how you fill the gaps 
  • Financial projections and key metrics 
  • Legal structure and licenses 

Sure, there’s some more stuff that can go in there, but if you’ve got these covered, you’re in great shape. 

 

Let’s look at these in more detail: 

 

Market Opportunity 

This section describes what you sell and for whom.  It starts with the customer – who they are and what their problem is – and defines how you solve that problem. 

It’s important to use data for this section, and not just your opinion.  How do you know what your customer wants? What proof points do you have? 

If you’re just starting out, finding this data can feel really overwhelming – but there are plenty of resources you can turn to simply by Googling it or talking to people in the industry. 

And if you’ve been at it for a while, even better! You likely have customer feedback and sales data that points you in the right direction. 

 

Value Proposition 

Here’s where you connect the dots between the market opportunity and what you sell.  Your value proposition is a statement that answers why someone should buy from you, and how you solve their problems.  It starts with really understanding what your customer wants or needs. 

In this section, you start with a clear and compelling statement, then elaborate a little. I like to help my clients get a very clear value proposition statement by using a simple formula: 

Our {product / services} help(s) {customer segment} who want {what they want}  (avoiding/reducing) {insert thing they want to stop or not have here }, and {insert the outcome they want here}. 

Here’s an example for a gluten-free bakery: 

Our {gluten-free baked goods} help(s) {people with gluten allergies or intolerances} who want {to enjoy delicious treats} avoiding {body pains and foggy brains}, and {enjoying sweet, delectable breads, cakes, and muffins}.

After this, you’d add some supporting context about how exactly you do what you do. 

 

Competitive Analysis 

In this section, you are identifying how your company compares to others who can solve the same problem for the same target customer. (This is also very useful for input for defining your own product or services.) 

You can start this by making a simple matrix, with their business as the first column and three other peers or competitors in the next columns.  Map your target audience, products or services, packages, pricing, customer engagement, brand voice, and more against each other, and then see how you set yourself apart.

 

Business Model 

Your business model is your plan for making a profit. It identifies what you sell, who you sell it to, how much it costs to run the business, and how you make money.  

It also identifies how you sell – that is, through which channels.  Examples include online, brick-and-mortar, channel, franchising, and so on. 

 

Go-To-Market Plan 

Your go-to-market plan describes how you will reach your target customers.  It identifies your: 

  • audience and buyers 
  • market strategy 
  • pricing strategy 
  • distribution strategy 
  • marketing plan
  • ongoing budget and resource needs 
  • success metrics 

Team and Advisors 

In this section, you describe who is on the team, and how you fill gaps. 

Even if you’re a one-woman shop, there are other people you should have on your “team” to fill the gaps.  Examples could include: 

Contractors: specialists who do things that you can’t do, hate to do, or take a long time to do.  An example might be a social media specialist. 

Professional services: I firmly believe every business builder needs a quarterly hot date with a trusted tax accountant and legal advisor.  Their jobs are to keep profit in your pocket and avoid you getting into legal hot water.  

Think it costs a lot to get this help? Think again.  Even if you’re just scraping by there are free resources available for you.  Here in Portland I often refer my cash-strapped clients to a local university’s free legal clinic.  

Advisors: these are people who have done what you’re trying to do and can offer you valuable advice and guidance.  They can connect you with other people and open doors to new opportunities. 

 

Financial Projections / Key Metrics 

Here’s where you show how you make a profit.  This is an area where a lot of startup founders struggle because they don’t yet have the vocabulary or know-how to build a forecast.  

Here’s the truth: this is basic math based on assumptions.  if you can add, subtract, multiply, and divide, you can create a forecast.  Add in some understanding of the industry, and you’re off to a good start. 

Just like balancing a checkbook and saving for a big purchase like a house, this is where you need to know your numbers.  

  • Cost of Goods Sold (COGS) – how much does it cost to produce what you sell? 
  • Average Selling Price (ASP) – on average, how much do you sell that thing for? 
  • Units – how many things do you sell? 
  • Operational costs: what are your monthly expenses? 
    • Fixed costs: what are the costs you have to pay each month, regardless if you made money? 
    • Variable costs: what are the other expenses you have that fluctuate? 
  • Break-even point: how many units do you have to sell at what price to cover your costs? 
  • Gross profit: how much money do you make from each sale after removing COGS? 
  • Net profit: how much money do you make after taking out all the expenses? 

If you don’t know these numbers, don’t fret.  You can learn them, and I’ve taught this a hundred times.  If you’re stuck, hit reply and let’s talk about it!

 

Legal structure, Licences, IP

In this section, you state what your business legal structure is, what licenses you have (if required), and the right to any intellectual property behind your business. 

At a minimum, I coach my clients to become a Limited Liability Company and fully separate their business from their personal accounts. (Even a one-woman shop!) By doing this, you limit your personal liability for business debts and lawsuits.  (It also makes managing your finances and doing your taxes so much easier!) 

In Oregon, this takes about 10 minutes online and costs $100 each year. 

 

Why You Need A Business Plan 

Now, you might be thinking: “I don’t need to get all fancy and write that stuff out. It’s in my head, and I’m not looking for investors or anything like that.” 

But here’s the reality: 

  • Often, what we think is clear in our head is harder to get on paper because it forces us to get really specific answering those tough, big-picture questions.
  • You do have an investor in your business – you. Your time, money, and energy have great value. 
  • And depending on your business stage and goals, there are definitely times when you need a documented plan.  Examples include getting a bank loan, competing for retail space, or courting a co-founder, to name a few. 

Take my client Adele, for example.  Adele owns a small bakery with a steady stream of customers.  She knew that to be more profitable she had to increase production and her current space limited her ability to do so.  She was delighted to find a new space that fit the bill perfectly but surprised when the real estate agent asked her to provide a business plan.  She didn’t have one and lost the space. 

Or consider my client Michael, an experienced architect with several years under his belt at a high-profile design/build firm.  When Michael decided to go out on his own, he needed a bank loan. The first thing the loan officer asked for? A business plan. 

And when my client Candice started courting potential co-founders for her budding apparel company, she found she couldn’t answer several questions she was asked about her business.  She learned she had to go fill in the information gaps to present herself as an informed leader. And in doing so, she gained a tremendous amount of confidence, clarity, and know-how. 

 

How To Write YOUR Business Plan 

There are a lot of wonderful and mostly free resources available on the internet.  Some of my favorites are: 

B-Plans 

B-Plans offers free business plan samples, resources, and how-to guides.  You can search by industry and download a simple template to use for your own business.  

This is a great resource for getting that bank loan or commercial space. 

Strategyzer’s Lean Business Canvas 

Strategyzer offers training and education on lean business methodology.  I use this template with my students and clients, but I call it the “one-page business plan” because it sounds friendlier and less intimidating! 

They have a lot of great guides on their website and on YouTube. 

Mercy Corps Northwest 

I’ve taught business foundations at MCNW for years and can attest to its incredible value at a very affordable price.  

If you’re in Portland, you should check out the classes here.  (Not in Portland? Hop on their email list as they are taking the whole shebang online – and I’m helping them do it!) 

And remember…

Writing a business plan does not limit you from pivoting your idea or moving forward.  Even if you write your business plan now, it can still change later. It can even change tomorrow. It’s meant to be an organic, evolving plan that you can use as your map for today, and adjust as you go along.

Struggling with the basics for your budding business?

Check out my FREE guide – The Small Business Checklist.  Click HERE to get it! 

All my best,

Siginture

 

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