How do you plan to reach your target market?
When you're first starting out, you probably won't have all the nuts and bolts of your marketing plan completely ironed out. However, you should have an idea of how you'll begin to start reaching potential customers in your target market. Will you be doing online advertising? Have a booth at local community events? Or will you rely on networking?
To get started, put a plan together to spread the word about your business and begin getting your first customers. Your marketing plans will evolve as you continue to grow your business and assess what's working well, and where your marketing efforts might be better channeled.
Who are the other competitors in the space?
It's good to know who already has established a business in the same space. Make a list of companies — both large and small — that you'll be competing with for business. What do they offer customers and how do they reach them? Once you know who is already serving the market, then you can figure out what makes your business unique. It's important to know what sets your offering apart from your competition.
Don't necessarily be discouraged by your competitors. Seeing successful businesses in the same area can be a sign that there's a market ready and willing to pay.
Step 2: Define your business
This step sounds deceptively simple: you sell products or services to customers. Business defined, right? You might be a graphic designer or own a bakery, but stopping at the basic definition won't help you when you're creating your business plan. You'll need to get much more detailed than that by considering these three things:
Your value proposition
Creating your value proposition takes research. Start by answering these questions:
- What problem are you solving for your target market?
- How does your product or service solve the problem?
- What is it about your business that keeps customers coming back?
What's your competitive advantage?
In step one, you researched your competitors. Is there something that sets your business apart from the competition? Maybe you provide a faster service or a better product? It's important for you and your customers to know what it is that makes your business unique.
Who does what?
Three-quarters of U.S. businesses don't have any paid employees.4 If you are part of that group, you can skip this step. But if you're planning to have other people help run your business, you'll want to spend some time figuring out who will do what.
When you have employees, you'll want to document each person's responsibilities and who they report to. Depending on how many employees you have, you may want to consider creating a simple organizational chart. Being organized upfront means that as you're busy running your business, employees will be clear about their individual roles and be able to work effectively — with less guidance from you.
Step 3: Know your numbers
While this may not be the most exciting part of creating a business plan, understanding costs and budget is crucial for your businesses success. According to the Small Business Administration (SBA), low sales and cash flow issues are the main reason businesses fail.5 But understanding your money doesn't need to be a difficult process.
What are your revenue streams?
How do you plan on making money? You might make money in multiple ways, so it's important to clearly define all of the ways your business will bring in money. If you're a landscape designer for residential homes, you might make money from doing full landscaping projects, from doing short consultations, and from selling professional products. If you sell a product, you might make money both from selling it both in person and online.
What are your sales goals?
If you have any sales goals, this is a great place to write them down. If you don't plan on seeking any outside funding, these goals are just for you. You don't need to do full financial projections6 and a budget7 unless you plan to find an investor or borrow money. However, if you do plan on seeking outside funding for your business, you'll need to do full financial projections, which usually includes your projected financial outlook for the next five years.8
When setting your goals, be ambitious, but also realistic in what you think you can achieve. You won't want to set sales goals that there's no way you can meet, but you also don't want to sell yourself short. Take some time to think about what makes sense for your business.
Calculate your startup costs
Starting a business can be expensive. Possible expenses include permits, equipment or inventory, and travel costs. To make sure you don't find yourself in a tricky cash position, it's important to make a list of all your startup costs. If you need a little help, the SBA has a sample worksheet to help you think through all of the costs you'll incur.9 Once you calculate your startup costs, if the total is more than you can afford to pay for yourself, you might want to consider getting a business loan.
If you decide you need a loan, Synovus is an SBA preferred lender, offering loans up to $5 million.