How to Start a Business | Chamber of Commerce

Create a business plan

Before embarking on any business venture, it is critical to have a business plan in place. This document is meant to outline your business’s financial goals and exactly how you will achieve them. A well-crafted business plan should serve as a roadmap for the next five years of your business. 

In addition to being useful for your planning purposes, a business plan is often used to secure funding. Lenders and investors will want to see a business plan before they agree to put any money into your business, and other important partners may also request this document.

A traditional business plan is made up of seven sections but typically totals one or two pages when completed. These seven components are as follows. 

1. Executive summary

You should be able to quickly summarize your business’s overall mission. Think of this like the “elevator pitch” for your business – a short paragraph about who, what, where, when, and why for your business. Keep your executive summary short and high-level, especially when you plan to share it with potential investors.

2. Business history and objectives 

This is where you can share more information about your business and yourself. Any relevant details about your experience and what led you to create the business, how you got to your current stage in the business, and where you plan to take it are helpful here. 

You can also use this section to set up the rest of the business plan by touching on the objectives of your business. This should be a “big picture” version of the objectives that addresses what you want to do and why you are well-positioned to do it.

3. Products and services

In this section, you can get into detail about what exactly you offer. Think of this as a section about how you will generate revenue, which means getting specific. You can start by listing particular products and services and then talk about each one and why it is unique or even share testimonials from customers. Anyone reading your business plan should walk away with a clear understanding of what you sell and do.

4. Marketing plan 

Now that you’ve established that your product or service is exceptional, you need to explain how you will get customers to understand that. The first element of this is understanding your target customer and anything you can about them – who are they? Where do they live? What do they buy? Fleshing this out will help you as you go into detail about more actionable marketing plans. 

You can also use this section to talk about branding. Think about the values of your business and what it stands for, then think about how you will convey that to your target market. 

Once you have these elements in place, it’s useful to talk about the channels you will use to market and sell your products and how you will promote your business. Don’t be afraid to get specific in this section, talking about individual campaigns and ideas you may have.

5. Competitive analysis 

It is unlikely that your business is something that no one else has ever done before, so you will need to think about why someone may choose your business over others. To do this, you need to have a good understanding of who that competition is. Anything you can understand about your competition’s products and services, marketing, and the customer will help you. 

With this knowledge, you can then think about gaps in the market or things competitors struggle with. That will be your opportunity to set yourself apart from them and gain customers. Identifying these differentiators up front will give you the ability to focus on them and become a market leader quickly.

6. Operational information

This is the “how” section of your business plan. Any logistics questions should be answered here, from your supply chain to manufacturing to reconciling finances. You can include information here about your business structure and employees, any vendors you will use to help with process management, and any weaknesses you may have that will need to be overcome. It is important to show here that your business is not just an idea but an organization that can function properly.

7. Financial analysis 

The simple part of a financial analysis is to figure out the costs associated with your business. This will be everything from equipment and supplies to overhead costs like rent and salaries. Even if you don’t have these numbers for your business yet, you can typically do some research to get estimates on the costs you can expect. 

It is a bit more difficult to estimate your revenue. You’ll start with listing different ways that you could make revenue, then determine how much you would charge for each. From there, you will need to estimate how much you will be able to sell in a time period, which may require some creativity. Similar businesses, historical trends, and other methods may be helpful in determining this. 

Anyone reading a business plan will understand that these are estimates, not promises. The most important thing is to have solid research behind each number so that you can explain how you came up with the estimate. This will also help to ensure your plan is reasonable and achievable.