Remember the old cliche, a failure to plan is a plan to fail? If you’re an entrepreneur looking to start selling your first product or service online then you must create a plan for your business. The only problem is most of the business plans you will find online are designed to help you create an overview to present to investors. This business plan (& free template) is a little different.
The following lean business plan & free template was created for those looking to start a side-hustle, become a freelancer, or start their first e-commerce store.
This plan is great for those of you that are not looking for outside investment in the beginning stages of your business. It will help you create a cohesive brand experience and offer a top-down analysis for when you’re making executive decisions about the future of your startup.
What is a business plan?
A great business plan will help you clarify your strategy, identify potential roadblocks, and evaluate the viability of your idea before you start your business. Think of it as a comprehensive road map for your small business’s growth and development.
Did you know that entrepreneurs with a business plan have a 129% increased likelihood of growing beyond the startup phase and a 260% increased likelihood of growing from “idea” to “new business?”
If you’ve got multiple ideas in mind, a rough business plan for each can help you focus your time and energy on the ones with the highest chance of success.
Creating a business plan may sound intimidating at first. So in the spirit of simplifying this process, I created this easy-to-follow guide that will make it easy for you to create a formal business plan for your product(s) or service(s).
In this business plan & free template, I’ll cover everything you need to write a successful business plan, step-by-step, and turn your idea into a reality.
Let’s dive in,
1. Describe your business
A company description is one of the most crucial sections of your plan & should answer these fundamental questions: who you are, why you’re different, what you plan to do, and how you plan to do it. Being very clear about your business objectives and unique value proposition will also help you come up with a name that reflects the essence of your brand & establish a memorable presence in the market. An iconic company name that resonates with your brand identity can set you apart in the market.
Clarifying these details is still a useful exercise, even if you’re the only person who’s going to see them.
Here’s what your business plan’s description should include:
- Business objectives & goals – What does your business want to do? What are your objectives both short & long term?
- Your business structure – Will it be a sole proprietorship, general partnership, limited partnership, or incorporated company?
- Your industry – size of the industry, who are your competitors, and how your mission sets you apart
- Product description and differentiation – What do you sell, and why is it different?
- Target market – Who is your ideal customer and who will you sell to?
- Marketing strategy – How do you plan on reaching your customers?
- Financial goals – How much do you plan to make & when?
- The team – Who’s involved in the business?
- Timeline – When do you plan on having each objective completed?
Create a mission statement
Next, you want to create a mission statement for your business.
A mission statement is where you start getting to the core of why your business exists, what you hope to accomplish, and what you stand for. What impact do you envision your business having on the world once you’ve achieved your vision? Effective mission statements should be:
- Inspirational – to make others believe in your vision
- Emotional – to captivate readers and grab their interest
You can follow a straightforward “problem, solution” format, or a fill-in-the-blanks framework:
- For [target customers]
- Who are dissatisfied with [current solutions]
- Our solves [key customer problems]
- Unlike [competing product], we have [differentiating key features]
This framework isn’t meant to be rigid, but instead to serve as a jumping-off point. Clarifying who you are and keeping that message consistent across platforms will help you land more jobs, attract top talent, and inspire trust in your brand/service.
Want to make some extra money this month? Read these:
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2. Market research & conduct competitive analysis
Market research is critical to understanding the market that you’re entering and who you’ll be selling to. When entering a market, you need to estimate how responsive it will be to your product – do you have only 1-2 brands as your competitors, or are there a lot of look-a-like brands/businesses?
Then, conduct a competitive analysis that will help you create a product that stands apart from the competition.
How big is your potential market?
No matter what type of business you start, it’s no exaggeration to say your market can make or break it. Product-market fit is crucial – it means being in a good market with a product that can satisfy that market. Choose the right market —one with plenty of customers who understand and need your product—and you’ll have a head start on success. Choose the wrong market (or the right market at the wrong time) and you will have a hard time achieving profitability.
The potential market is an estimate of how many people need your product. Here are some general tips to help you begin your research:
- Research relevant industry trends and trajectories – Let’s say your product or service provides photography services for weddings – market research will include data about how many people will be marrying in the next five years, as well as any information you can find about consumption patterns among that group. Finally, look for information on whether your general industry is projected to grow or decline over the next few years.
- What are the barriers to entry in your market? How quickly can a company entering the same market recreate what you’re selling?
- Make informed guesses. You’ll never have perfect, complete information about the size of your total addressable market. Create some estimates on as many verifiable data points as necessary.
Conduct competitive analysis
Competitive research begins with identifying other companies that currently sell in the market you’re looking to enter. Then answer the following questions after you’ve identified your most significant competitors:
- Where do they invest in advertising? What does their advertising look like?
- What kind of press coverage do they get?
- Is their customer service any good? In what ways can your product/service be more transparent
- What are their sales and pricing strategies? Do they have any guarantees?
- READ REVIEWS! You can create an awesome product simply by fixing flaws in your competitor’s product or service.
Spend some time thinking about what sets you apart. If your idea is truly novel, be prepared to explain the customer pain points you see your business solving. If your business doesn’t have any direct competition, research other companies that provide a similar product or service.
3. Understand your ideal customer profile
Defining your audience helps you determine the language you’ll need to propose your ideas as well as the depth to which you need to go to help readers conduct due diligence.
Who is your ideal customer and client?
Your ideal customer, also known as your target market, is the foundation of your marketing plan, if not your business plan as a whole. You’ll want to keep this person in mind as you make strategic decisions, which is why an overview of who they are is important to understand and include in your plan.
To give a holistic overview of your ideal customer, describe a number of general and specific demographic characteristics. An ideal customer profile includes:
- What does their day-to-day look like?
- Where they live
- Their age range
- Their level of education
- Some common behavior patterns
- How they spend their free time
- Where they work
- What technology do they use
- How much they earn
- Where they’re commonly employed
- Their values, beliefs, or opinions
For example, a single 25-year-old female has different interests, shopping habits, and pricing sensitivity than a 70-year-old retiree who is interested in gardening. Your business plan and marketing would look very different based on which of these was your ideal customer.
4. List your product & services
Next, you need to outline exactly what you’re offering to the world. The product/services section describes the benefits, production process, life cycle, and how what your business offers is better than your competitors.
When describing benefits, focus on:
- Unique features
- Translating features into benefits
- Emotional and practical payoffs to your customers
For the production process, answer how you:
- Create existing and new products or services
- Source raw materials or components
- Assemble them through manufacturing
- Receive and deliver them (supply chain logistics)
- Maintain quality control and quality assurance
- Manage your daily operations – hiring staff, bookkeeping, and inventory
Within the product life cycle portion, map elements like:
- Time between purchases
- Up-sells, cross-sells, and down-sells
- Future plans for research and development
- Complementary products and timeline
If you sell many items, you can include more general information on each of your product lines; if you only sell a few, provide additional information on each. Describe new products you’ll launch in the near future and any intellectual property you own. Express how these complimentary products will improve profitability.
5. Outline the management & organization
Is your business a one-person show at the moment? No problem. Use this exercise to understand who you might need to hire in the future to alleviate some of the stress that comes along with managing a successful business.
Identify a few team members you may need to hire in the future and highlight the type of expertise and qualifications you require for each position. What services will you need to outsource? Will you require a website designer? A copywriter? Who will help you do taxes? How will you hire them? What are their hourly rates?
6. Draft a marketing strategy
How will you market your product or service? How can you introduce your product to the market without spending tons of money on advertising? Your marketing strategy is important because it can make or break your business.
Growth strategies are a critical part of your business plan. Here, you will take some of the research you gathered from your market analysis and ideal customer profile in order to understand exactly how you will share your awesome product or service with the world.
Your marketing strategy is also an opportunity to put to paper some of the more intangible facets of your business, like your principles, ideals, and type of cultural philosophies.
Consider the following when drafting a marketing strategy:
- Special offerings & sales
- Copywriting and funnels
- Retention strategies like customer loyalty or referral programs
- Advertising and promotion channels such as Ads, search engines, social media, print, television, YouTube, and word of mouth
- What’s your ad budget? What is the typical ROAS (return on ad spend) in your niche?
- What type of organic content can you make on a daily basis that will help distinguish your brand as an authority?
7. Financial Plan
You may not have established financials of any kind at this stage. That’s ok. Use this section to focus on making projections and strategic forecasts for your business.
How much will it cost to bring your dream business to life? What’s your break-even point? What materials will you require? How much does shipping/logistics cost? It’s important to get a rough estimate of your costs so that your business doesn’t hemorrhage money in the future. You can also update your financial statements as you begin operations and start bringing in actual accounting data.
If the number you come up with is intimidating, I highly suggest reading the following books – they have completely changed my mindset about business costs by teaching me how to launch and scale businesses with the least amount of capital possible.
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Reis
The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future
by Chris Guillebeau
Zero to One: Notes on Startups, or How to Build the Future
by Peter Theil
8. Create executable goals for your business.
Finally, your business plan should include both short- and long-term goals.
Short-term goals, generally, should be achievable within the next month for example – product manufacture outreach, product development, website completion, etc.
One to five years is a good window for long-term goals.
Make sure all your goals are SMART: specific, measurable, attainable, realistic, and time-bound.
They must also be tied to key results. When your objectives aren’t clearly defined, it will be easy for you to lose momentum and focus.
By following this free business plan template you are now one step closer to starting your dream business!
I wish you all the best of luck on your new journey!
