A Template for Writing a Small Business Plan
What is a business plan?
A business plan is a must for anyone starting a business. While overwhelming to many, it is a necessary step that business owners should take in order to have a living blueprint that helps them maintain and grow their business. Strategic planning clarifies your long-term goals and the steps necessary to achieve them. Based on your business plan, a clear business strategy lets you envision where your company will be in the future—and provides you with a map for getting there.
It is also a document that will help you get your business off the ground, as it lays the vision, mission, strategy, and goals to prospective investors and lenders. Here are the main elements of a comprehensive business plan:
Executive summary: A summary of the reasons you are seeking financing, together with a summary of your business operations. The executive summary is the first section of your small business plan that is typically written last. This section includes highlights of every section in the business plan. It also will include the most basic information, such as your business name and location, your mission, description of products and services, and your management team.
Business overview: A brief description of your company. The business overview or mission should describe how you intend to achieve your vision. It will include a description of the products you are selling, your target market, how your products will address the needs of your customers, and whether business will be home-based, online, or a store front.
How will you deliver your products? For example, will they be shipped, sold over the counter, or delivered personally?
Market and competitor analysis: Where it stands in the marketplace; What makes you stand out from the competition? It is important to define your niche so that you stand out from the herd. Don’t be a generalist, when you can stand out with a specialty. When you don’t know what you’re niche is, it is extraordinarily difficult to compete. If you don’t differentiate from the marketplace, you are left to compete on price alone. That is almost never the best approach.
Define your Target Market: Defining your target market will help you choose who you want to serve, know who your best customers are and organize your efforts to win more of them. Once you have an idea of the type of customers you want to attract or attract more of, gather more information.
This can include purchasing behaviours, demographics, social values, media consumption habits and more. Your experience with existing customers will give you some of this information. So will your sales and customer services employees. It is important to understand not just what you customers are buying, and how much they are spending, but why they are buying from you. What is the compelling reason why customers should do business with your company and none other? That kind of information helps you target them more effectively in marketing campaigns.
Sales & marketing plan:
The sales & marketing strategies that will be used to target your customers. Understanding your target customer is at the heart of a successful and marketing plan. It is not about understanding your service or products. It is about how your ideal customer feels about your service or product. What benefits, solutions, or happiness are you offering your customer? As mentioned above, understanding your target customer—their demographic, spending habits, and their motivations, will help you craft the right marketing and sales plan.
This section describes how you intend to get the word out to customers about your services. For example: What are the most efficient ways to market your services? For example, will you market them via a business website, email, social media, or newspapers? Will you use sales promotional methods such as pricing discounts for new customers? What marketing materials will be used—business cards, flyers, or brochures? What about referrals?
Organizational and Legal Structure
If you chose to operate as a sole proprietor, you may skip this step. If you choose to operate as a corporation however, you must select who will occupy the positions of officer, director and shareholder of the corporation. Then, these must be set out in resolutions that organize your corporation.
Human resources plan: Details on your key staff, HR policies & procedures; consider who your employees are going to be (including yourself). You will require employment agreements for all those who will be fully employed by your business. If you are looking to hire an independent contractor to provide some services, then you may require an independent contractor’s agreement instead of an employment agreement. You will need essential components as job descriptions and training plans for employees as employees need to upgrade their skills to keep ahead of technological change and globalization.
Without a written HR plan, small business owners often face setbacks such as costly employee turnover, procedural bottlenecks and inconsistent productivity. Think of your HR plan as a practical, tactical tool that can help you determine exactly where you’re going and drive your business forward.
Action plan: The planned actions of the business over the next 2 to 3 years. Briefly describe the action items needed to achieve your objectives, using milestone dates. For example, by “date x” a fully equipped home office will be completed. By “date x” a business website will be launched. By “date x” an accounting software with customer invoices will be set up. By “date x” a social media marketing plan will be in place with customers directed to website and landing pages via Facebook, Instagram, and Google pages.
Financial and Equipment needs. Starting a small business doesn’t have to require a lot of money, but it will involve some initial investment as well as the ability to cover ongoing expenses before you are turning a profit. Put together a spreadsheet that estimates the one-time startup costs for your business (licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, trademarking, grand opening events, property leases, etc.), as well as what you anticipate you will need to keep your business running for at least 12 months (rent, utilities, marketing and advertising, production, supplies, travel expenses, employee salaries, your own salary, etc.).
Those numbers combined is the initial investment you will need.
Now that you have a rough number in mind, consider how you will fund your small business. Will it be through financing, small business loan from the bank or family members, small business grant, or angel investors?
Pricing Strategy: Demonstrate how your business will be profitable by summarizing your projected revenue from product sales minus your expenses: How will your competitive pricing persuade customers to come to you instead of your competition so that you generate a profit after paying expenses?
Financial appendix: The facts and figures that back up what you say in your plan. The appendix includes information that supports your statements, assumptions, and reasoning used in the other sections of your business plan. This may include graphs, charts, statistics, photos, marketing materials, research, and other relevant data.
Final Thoughts:
It’s important to revisit your action plan regularly and to continually update it. Allowing your action plan to be surpassed by developments in your company is a sure way for it to fall into disuse, which could cause your entire business strategy to unravel.
After the 12 months are up, it’s time to create a new action plan for the following year, drawing on your overall business strategy and lessons you’ve learned so far.
To learn more about other important steps to starting a business read our article here.
Contact a lawyer at Kalfa Law Firm today to help you with the legal requirements of starting your business. We can also guide you with what you need to do to ensure that you start your business with all the legal and financial groundwork in place.
You work hard for our money. We work hard for you to keep it.
FAQ’s:
-Shira Kalfa, BA, JD, Partner and Founder
Shira Kalfa is the founding partner of Kalfa Law Firm. Shira’s practice is focused in corporate-commercial and tax law including corporate reorganizations, corporate restructuring, mergers and acquisitions, commercial financing, secured lending and transactional law. Shira graduated from York University achieving the highest academic accolade of Summa Cum Laude in 2012. She graduated from Western Law in 2015, with a specialization in business law. Shira is licensed to practice by the Law Society of Ontario. She is also a member of the Ontario Bar Association, the Canadian Tax Foundation, Women’s Law Association of Ontario, and the Toronto Jewish Law Society.
© Kalfa Law 2021
The above provides information of a general nature only. This does not constitute legal advice. All transactions or circumstances vary, and specified legal advice is required to meet your particular needs. If you have a legal question you should consult with a lawyer.
