Write Your Business Plan
Having a firm grasp of your “known unknowns” is important because all it means is that you’re actively not prioritizing finding a solution right now; that’s a lot better than being unprepared or caught off guard, especially if you struggle to answer these questions while seeking funding.
Business plan outline
Next Step: For inspiration, it can be helpful to look at some business plan examples to kick things off. If you’re interested in writing a plan but turned off by lots of paperwork, we’ve developed a free business plan template that you’ll actually use.
Choose a business name
For starters, your business name is a universal facet of your marketing—it shows up everywhere you do. Keep things simple and focused: find a name that makes it clear what you do, that’s short and memorable, and that aligns with your mission and vision statement. This isn’t an effortless task, but it’s very achievable with a bit of ingenuity.
Next Step: Our business name generator can help you come up with an initial set of ideas—the rest is up to you. If you’re starting from scratch, there are also a few time-tested practices to lean on for direction.
Conduct market research
One of the best ways to start a business is to conduct a market analysis. The goal of market research is to better understand your target market and competitors in order to craft an effective business plan.
What’s the potential opportunity size?
Entrepreneurs are often too dismissive of small markets. Yes, the market size should match your ambitions, but the opportunity size of a specific niche is determined by a few other dimensions. For example, if a product category has relatively few active customers, but the price of the product is relatively high and requires repurchase, that’s an attractive opportunity that founders focused on market size might miss.
Who’s your competition?
What does the competitive landscape look like for your target market? Are there many competitors, or very few? If there are a lot of competing businesses in your niche, it’s often a sign that the market is well established. That’s good for ensuring demand exists, but it will also require you to differentiate what you offer (to some degree) in order to attract customer attention and build market share.
Who is your target audience?
A target audience is a group of people you plan to sell your products and services to. Understanding your target audience makes it easier to find new customers and bring interested buyers to your website. From higher engagement on your social media channels to a greater ROI for your ads, defining your buyer personas upfront can help you succeed.
Secure Financing to Fund Your Business
Common ways to fund your startup
Choosing the right structure is about balancing the legal and financial protection you need with the flexibility offered by different options. It’s an important decision, and it’s one you should consider carefully before you launch your business.
A sole proprietorship is great if you’re the only person involved in the business, and is usually the lowest-effort structure to pursue, but it leaves you personally liable for the business and its activities. As a sole proprietor you can hire employees, but you’ll need an employer identification number (EIN) to do so, which means registering your business entity.
Limited liability corporation (LLC)
A limited liability corporation (LLC) is a common type of small business entity in the US. It provides liability protection for the business owner(s), so you are not financially responsible if legal claims are brought against your business. An LLC can be formed by one or more owners.
A C corporation is a business structure where proprietors are taxed separately from the entity. Shareholders own the business and each has a fractional share of the company. The benefits of a C corp are normally enjoyed by large, multinational corporations, like Walmart and Apple. However, they can be leveraged by small businesses that want to garner investment by issuing stock.
Legal structure factors
Where is your business located
What kind of business are you starting
How many people are involved
Next Step: An accountant or lawyer can be helpful in evaluating the different options available in your area and with the process of setting up a business. You can also check out this sole proprietorship vs. LLC comparison.
Refine your idea.
If you’re thinking about starting a business, you likely already have an idea of what you want to sell online, or at least the market you want to enter. Do a quick search for existing companies in your chosen industry. Learn what current brand leaders are doing and figure out how you can do it better. If you think your business can deliver something other companies don’t (or deliver the same thing, only faster and cheaper), or you’ve got a solid idea and are ready to create a business plan.
Define your “why.”
“In the words of Simon Sinek, ‘always start with why,’” Glenn Gutek, CEO of Awake Consulting and Coaching, told Business News Daily. “It is good to know why you are launching your business. In this process, it may be wise to differentiate between [whether] the business serves a personal why or a marketplace why. When your why is focused on meeting a need in the marketplace, the scope of your business will always be larger than a business that is designed to serve a personal need.”
Another option is to open a franchise of an established company. The concept, brand following and business model are already in place; all you need is a good location and the means to fund your operation.
Brainstorm your business name.
Regardless of which option you choose, it’s vital to understand the reasoning behind your idea. Stephanie Desaulniers, owner of Business by Dezign and former director of operations and women’s business programs at Covation Center, cautions entrepreneurs against writing a business plan or brainstorming a business name before nailing down the idea’s value.
Clarify your target customers.
“You need to clarify why you want to work with these customers – do you have a passion for making people’s lives easier?” Desaulniers said. “Or enjoy creating art to bring color to their world? Identifying these answers helps clarify your mission. Third, you want to define how you will provide this value to your customers and how to communicate that value in a way that they are willing to pay.”
TIP: To refine your business idea, identify your “why,” your target customers and your business name.
During the ideation phase, you need to iron out the major details. If the idea isn’t something you’re passionate about or if there’s not a market for your creation, it might be time to brainstorm other ideas.
Write a business plan.
Once you have your idea in place, you need to ask yourself a few important questions: What is the purpose of your business? Who are you selling to? What are your end goals? How will you finance your startup costs? These questions can be answered in a well-written business plan.
A lot of mistakes are made by new businesses rushing into things without pondering these aspects of the business. You need to find your target customer base. Who is going to buy your product or service? If you can’t find evidence that there’s a demand for your idea, then what would be the point?
Free download: Here is our business plan template you can use to plan and grow your business.
Conduct market research.
Conducting thorough market research on your field and demographics of potential clientele is an important part of crafting a business plan. This involves conducting surveys, holding focus groups, and researching SEO and public data.
Market research helps you understand your target customer – their needs, preferences and behavior – as well as your industry and competitors. Many small business professionals recommend gathering demographic information and conducting a competitive analysis to better understand opportunities and limitations within your market.
The best small businesses have products or services that are differentiated from the competition. This has a significant impact on your competitive landscape and allows you to convey unique value to potential customers.
Consider an exit strategy.
It’s also a good idea to consider an exit strategy as you compile your business plan. Generating some idea of how you’ll eventually exit the business forces you to look to the future.
“Too often, new entrepreneurs are so excited about their business and so sure everyone everywhere will be a customer that they give very little, if any, time to show the plan on leaving the business,” said Josh Tolley, CEO of both Shyft Capital and Kavana.
“When you board an airplane, what is the first thing they show you? How to get off of it. When you go to a movie, what do they point out before the feature begins to play? Where the exits are. Your first week of kindergarten, they line up all the kids and teach them fire drills to exit the building. Too many times I have witnessed business leaders that don’t have three or four predetermined exit routes. This has led to lower company value and even destroyed family relationships.”
A business plan helps you figure out where your company is going, how it will overcome any potential difficulties and what you need to sustain it. When you’re ready to put pen to paper, these free templates can help.
Easy Businesses to Start
Whether you’re looking to start your venture today or you simply don’t want to jump through the normal hoops of launching a small business, the below ideas are extremely easy to start — so easy, all you’ll need to do is sign up on a website or tell your friends about your services.
1. Vacation Host
Have you ever used a home-sharing service instead of a hotel? You could make a living by hosting visitors in your own home or renting out a room. Consider becoming a host with companies like Airbnb.
2. Pet Sitter
Do you have a passion for pets? Consider becoming a pet sitter. While the pet’s owners are away on vacation, either host their pet at your home or make visits to their home. Join a pet sitting service like Wag to get started.
3. Daycare Owner
Childcare continues to be in high demand. While nannies and nanny shares are popular right now, a good daycare is hard to find. Fill a need in your neighborhood by opening your own. And, as always, make sure you’re complying with your city and state’s zoning, licensure, insurance, and inspection requirements.
If there’s a topic you have a heavy interest in, then there’s an audience out there with a heavy interest in it too. A blog can be used to build an online community whose engagement can be monetized. Affiliate marketing, sponsored content, and co-marketing are some ways to make money once your blog develops a following.