There's a famous quote by Benjamin Franklin that says, "if you fail
to plan, you are planning to fail ". Yet so many entrepreneurs leap
into starting their businesses, armed with nothing more than a
good idea, and some big dreams.
In today's video, I'll be explaining why writing a
business plan is an important step in your entrepreneurial
journey and outlining the key sections that every good
business plan should include.
And make sure you stick around because throughout this video, I'll
also be sharing our comprehensive beginner-friendly business plan
template, as well as financial spreadsheet templates and a
fully completed sample business plan so that you can get started
with writing your own today.
Now, I know what you're thinking.
Writing a business plan sounds kind of boring and frankly
feels like a waste of time when you're a busy entrepreneur
with so much else to do.
But for many businesses, it's actually a make or break
step that could save you a huge amount of time, money
and energy in the long run.
And if you still don't believe that starting with a
plan is the best way to go.
These numbers might change your mind.
One Harvard business review study found that entrepreneurs
who write formal business plans are 16% more likely to achieve
viability than otherwise identical, non planning entrepreneurs.
Their study concluded that it pays to plan.
So let's get to it.
Today I'll be sharing some of the top reasons why writing a business
plan might be helpful for you no matter what kind of business
you're creating, we'll also be covering the key features of a
solid business plan and why each one is a necessary component for
you as the founder to consider.
Not only that, we've also created some helpful templates to guide you
through every step of this process.
So be sure to download those, using the links below.
My goal is that by the end of this video, you'll understand why
it's a good idea to start your business with a solid and have the
tools you need to make it happen.
No matter how much excitement you might have about your
business idea, it's worth it to slow down and create
a plan for your new venture.
Here are some of the most valuable reasons that you may
want to prioritize this step in your business journey.
First, you can thoroughly evaluate your ideas.
Business plans are typically associated with money;
pitching to investors or securing loans from a bank.
So if you're a business owner who is not currently
looking for funding.
You might wonder whether it's worth your time to complete this process.
The answer is yes.
To quote Jeff Hayden and Inc magazine "first and foremost,
your business plan should convince you that your idea makes sense
because your time, your money and your effort are on the line".
Writing out a plan allows you to evaluate your business ideas in
advance without taking on any risk.
After all, if it doesn't make sense on paper, it's probably not going
to make sense in the real world.
When you think through each of the questions that a business
plan asks you to consider, you're forced to be realistic about
whether your idea is even viable.
This allows you to make better decisions and only spend your
time on worthwhile endeavors with a chance of succeeding.
Second, you can plan for your next phase.
When you write a business plan and you're taking the
time to assess where you are and where you're going.
Unfortunately, it's not enough to just set goals.
To be successful
you also need to identify what's currently preventing
you from meeting those goals and create a realistic
strategy for achieving them.
Writing out your plan helps you to understand which gaps you'll need
to fill before you can scale your business up to the next level.
When, you know this information upfront, you can make smarter,
more grounded decisions about how you spend money and time at every
stage of your business growth.
Third, you can clarify your marketing strategy and tactics.
As a business owner, you are constantly having to make choices
about everything from how you spend your days to what social
media platforms you should be on.
Without a clear plan for your business, you can waste a lot
of time spinning your wheels, trying to figure out what
makes sense for you and what your next steps should be.
When you clarify your plan in advance, you're drawing
yourself a map to follow at every stage of your journey.
Of course plans can change, but when you start with a guide,
it becomes a lot easier to make informed decisions about your
business now, and in the future.
Fourth, you can scope out the necessary work.
When it comes to big business ventures, it can feel
overwhelming to think through all the steps, time and money
that a project will require.
Instead, we tend to cross our fingers, jump in and
just hope for the best.
We play down how much work a project will be an optimistic.
We expect some pretty unrealistic timelines, but of course, things
almost always take longer and are more expensive than we think.
Creating a realistic business plan can help you see in
advance how much work there is to be done on a particular
project and what it will cost.
Rather than relying on wishful thinking, you can then prioritize
projects with intention.
Fifth, you can hire and build partnerships.
If you want to build a great business, you're probably going
to need some great support, whether that's in the form of
potential partners, collaborators, or employees, and while a
business plan is certainly not the only means to demonstrate
the viability of your business,
it can be a great way to show your expertise, describe your experience
and make it clear that you have a solid grasp of your market.
A good business plan will articulate your vision and
back it up with research, which can help folks evaluate your
idea for themselves and decide if they'd like to join you.
Lastly, you can secure funding whether you're asking for
money and support from a big bank, an investor, or just your
friends and neighbors, having a business plan is essential.
Your plan should show that you've done your homework,
that you understand your target customers and that you have the
skills and expertise needed to make your venture a success.
When done correctly, your business plan will speak for itself and
help you gain access to capital and resources when needed.
I know that it can be daunting to think about writing your
own business plan from scratch.
That's why we've put together an in-depth template that will
support you every step of the way.
It's so easy to feel blocked by the blank page and be
unsure of what factors to even include in your plan.
It can also be intimidating to sort through advice full of jargony
business terms and industry lingo.
Luckily, there is no need to reinvent the wheel.
Most business plans actually follow a very simple,
straightforward process.
Click right here to download your copy of our comprehensive
template so that you can follow along with the rest of this video
as we go through each section, one at a time.
As a note, this business plan template is perfect for beginner
entrepreneurs who want to examine all the factors to consider when
starting and growing a business.
It's a tool to help you explore key components of
your business and plan for the future in a proactive way.
That being said, if your primary goal is to secure funding, this
template may or may not include all the specific elements
that your target investor will want to see in your plan.
Those features can vary widely depending on
who you're pitching to.
So be sure to do your own research, to ensure that you're addressing
all the concerns of your specific audience, whether
that's an investor or a bank.
In our template, you'll find even more guidance and
information about how to complete each of these sections.
But here's an overview of everything we'll be including
in our business plan.
Number one, the executive summary.
Your plan's executive summary is exactly what it sounds
like a condensed streamlined summary of all the high level
aspects of your business plan.
In some cases, this summary may be all that a potential
partner wants to read.
So it needs to be clear and concise, no more
than one page long.
Because of this, we actually recommend that you write your
executive summary last after you've already had the chance
to fully flesh out all the other sections of your plan.
Your summary should include a brief overview of your business concept,
your goals and vision, what you sell and what sets it apart, your
ideal customer and target market, your marketing plan, your current
and projected financial states, and your ask for the reader.
If that sounds like a lot, don't worry.
Those are actually all the sections that make up the rest of the plan.
We'll be going into detail about each of these sectors
throughout the plan.
Your summary is just where you bring it all together.
Number two, your company overview.
This section should answer the question of what for your book.
What does your business offer?
What do you stand for?
What are you hoping to achieve.
In practical terms,
this is where you'll explain the business in broad strokes.
You'll need to include information about your business structure
and model, what you sell and the industry you fit into.
This is also where you can go into detail about your
vision, mission and values.
What do you care about and what impact do you
want to have on the world?
You'll also want to explain your business objectives, your short and
long-term goals for the business over the next several years.
Lastly you'll describe your team and the skills and experience
they bring to the table.
If you don't yet have a team, this is where you
can include descriptions of who you'll need to hire, to
fill roles in your company.
By the end of this section, it should be very clear why your
business exists, what you stand for and what you're hoping to achieve.
Number three, market analysis.
This is a crucial part of your business.
After all, if you could have the best product in the world, but
if you don't have any customers ready and eager to purchase it,
you're not likely to be successful.
In this section,
you need to show that you understand how large the market
may be for your product or service.
And whether that market is likely to grow over time.
You'll also need to analyze your competitors.
What businesses are you competing with and how will you
differentiate yourself from them?
And if you think you're in an industry without
competition, think again.
Writing this section of your plan will also force you
to consider your indirect competitors also known as the
other ways that your customer could solve the same problem
that your product addressed.
For example, if you run a pizza parlor, you're not just going
to be looking at the other pizza parlors in your town.
You also want to consider the popular sandwich shop across the
road, which solves your customer's problem of hunger in another way.
Lastly, this is a great place to do what's called a SWOT analysis.
Analyzing your own strengths,
weaknesses opportunities in your industry and threats
from external sources.
Completing this exercise helps you to be realistic about the landscape
surrounding your business and take into account all the factors
that may impact your success.
Number four, products and services.
In this section, you'll clearly define exactly what
it is that you're selling.
This is where you can outline in detail, all the essential aspects
of your products or services, including how they'll be priced.
What makes them unique and different from the competition
and the impact they will create for your customers.
This is also where you can describe ideas for future products
or services and how you will expand your offerings over time.
While, of course, you'll be mentioning your products
or services in many other areas of your business plan.
It's important to include this detailed section so that readers
can see the most pertinent information at a glance.
Number five, customer segmentation.
Now you need to get hyper-specific about who
exactly is buying your products.
Who is your ideal client?
What do they want and how do they behave?
You'll want to consider both demographic and
psychographic characteristics.
Demographic qualities are things like where this person lives
and how much they earn while psychographic ones address
what they care about, what they value and what they prioritize.
It's crucial to get clarity on your ideal client so that you can
make smarter and more strategic decisions about every aspect.
Of your business, especially when it comes to your
pricing and your marketing.
Number six.
Marketing plan.
Your whole marketing plan will center around your ideal customer,
which is why there's not one correct way to market a business.
It all depends on what your ideal customer cares about, where
they spend their time online and what they pay attention to.
Your business plan should not only outline how and where you'll spread
the word about your offerings, but also explain why you've made
those choices with respect to the people you're targeting.
The platforms you choose to use, the people you partner with,
where are you selling your products and even how much your
products cost are all aspects of marketing and your choices for
each should reflect who your ideal customer is and what they value.
Number seven, logistics and operations plan.
In addition to knowing what you'll sell and who you'll sell
it to, you also need to figure out how exactly you'll sell it.
What needs to happen in order to do it, your product or
service to your customer?
This section of your plan will look different depending on
your particular business model, but it's important to complete
in order to map out how you'll actually operate your business.
Start by asking yourself questions like what equipment
tools or technology will I need to run this business?
How will I manage my inventory?
What kind of physical space do I need to do my work?
How will I ship or fulfill my order?
Once you have the answers to all these questions, you'll have a
much clearer picture of what steps you need to take in order to get
your business up and running.
Number eight, financial plan.
Last but not least,
let's talk about money.
If you want to hire good talent, attract investors and
grow over time, your business needs to be financially viable.
So it's important to crunch your numbers upfront.
You want to make sure that your business has a good chance of
being profitable and staying afloat before you take on
any amount of financial risk.
At a basic level, you'll want to look at things like your actual
or projected income and expenses, assets and liabilities, and the
cash flow that your business will have from month to month.
Knowing these numbers will help you make smarter decisions
about purchasing, hiring, marketing, and the right timing
of key business endeavours.
In our business plan template, you'll also find links to
additional spreadsheet templates for three key financial statements,
an income statement, a cashflow statement, and a balance sheet.
So there you have it, the eight most important sections to
include in any business plan.
I get it, it can be overwhelming to think about all of these factors
at once, but just remember the main goal of any business plan is to
create clarity for yourself first.
Going through this process can help you to identify what
you don't know and figure out all the questions you'll need
to answer before launching or further growing your business.
While of course, you don't want this exercise to become a
distraction that stops you from actually starting your business,
it is incredibly valuable to take some time to think ahead.
Complete your plan now, and you'll save yourself a lot of stress
and confusion in the future.
And if you want even more support in writing your own business plan,
we've actually put together a sample one for a fictional business
that creates custom greeting cards with your pet's paw prints on them.
This sample plan will give you an inside look into how
to complete each section,
and it includes notes on how this fictional business owner could
strengthen their plan further.
Be sure to download the example plan using the link
below so that you have even more context when creating.
Now that you've taken the time to consider all aspects of your
business, you may need some helpful tools to make it happen.
At Shopify, we believe that running a business should be a
possibility for everyone, which is why we offer a totally free,
no-risk trial of our software.
If you're a business plan requires a reliable, robust
tool that will allow you to scale and grow your business.
Be sure to check out the link below to access the full Shopify platform
commitment-free for 14 days.
We'd love to support you in building the
business of your dreams.
You've heard how important it is to start your business with
a solid plan, now let us know in the comments below which
section of this business plan are you most excited to write?
Which one do you find the most intimidating?
We'd love to know so that we can create future
videos to help you out.
And don't forget to check out our other videos on this
topic, including how to write a business plan, which will walk
you through every step of this process in even more detail.
As always, thank you so much for watching.
I'm Stephanie Pellett and I'll see you next time.