Lesson 3: How to Write a Business Plan

How to Write a Business Plan

This lesson will help you flesh out your BIG IDEA worksheet from lesson 2, including thinking about the operational questions that will transform your idea into a reality.

This section will also help you understand the key aspects of developing a business and marketing plan while avoiding financial mistakes in the process.

Understanding Your Strengths, Weaknesses, Opportunities, and Threats (SWOT)

As you explore your options and narrow your focus, knowing how to use an important business tool called a SWOT analysis will give you a snapshot of your business and help you understand the likelihood of its success.

SWOT stands for your strengths, weaknesses, opportunities, and threats — understanding how these relate to your business idea will help you figure out if your big idea is also a good idea. Consider the following example.

Self-Employment Idea: Tutor

Jeanette was a teller at the local bank for 15 years until it closed down. Not wanting to go work at another bank 15 miles away, Jeanette instead became active in her community, first working at a local church and then as a community activist. Now, needing some income, Jeanette is considering using her math skills she acquired at the bank to become a tutor to the growing population of local elementary school kids in the community. Below is a SWOT analysis that Jeanette drafted to help her better plan working for herself.

Strengths

Strong knowledge of arithmetic
Strong ties to the community because of church and community volunteering, enabling networking; has good advocates
A good friend was a reading tutor for 8 years and can serve as a mentor

Weaknesses

Many of the new students in town do not speak English and may not be easily able to communicate
Has never held a teaching position before
Knowledge of math comes only from banking
Does not have the current textbooks elementary schools are using to teach math

Opportunities

Population has grown in town, and the school board is opening a new elementary school
A neighbor who also is an elementary school math tutor is moving to a different state in a few months

Threats

New online tutors are free and always available
Existing elementary school is starting an afternoon volunteer tutoring group with parents and teachers as tutors

Download more examples to help you understand how to conduct your own SWOT analysis.

The Basics of a Good Business Plan

Every business needs a business plan. For a micro business — a company employing 10 or fewer employees — the plan can be short and simple.

A business plan serves two purposes:

It acts as your roadmap for planning and developing the business.
It demonstrates the viability of your business to investors, lenders, and other audiences.

Reading through and understanding the following section will give you the information you need to get started and successfully collaborate with an expert in developing your unique business plan. (You can find resources to connect you with experts in Lesson 5 of this course.)

Elements to Include in Your Business Plan

Cover Page

The Cover Page displays the business name, standard contact information, the date the plan was created, and a reference number for tracking purposes (optional).

Executive Summary

The Executive Summary is a concise overview of the major elements of the plan. This is especially important as it provides the reader with a high-level overview of your business idea. The executive summary should be written last to ensure all key points are covered.

The Industry, the Company, and its Products or Services

This section includes the company’s mission and vision statements; its corporate and legal structure; a detailed description of the products and services. It can also provide an overview of the industry in which the company will function. This is where you should talk about everything a reader needs to know about the “what and why” of your company.

Market Research and Analysis

This section defines how your product or service differentiates itself from the competition. It identifies your major and secondary customers, marketing trends, and research methodology used to acquire the information.

Marketing Plan

Your business is just getting off the ground. So why do you need a marketing plan? It’s important for the success of your business to know where you want to take it in the future. And the only way you can get there is to have a plan to help guide the journey. Consider your marketing plan the roadmap to your business’s future.

Financing Your Self-Employment

The amount of money you need to get started will vary depending on the type of self-employment you want to pursue. Some options, like freelancing or consulting, may require less startup cash than a business where you need a physical storefront or plant.

Finding the capital to start a business can be one of your biggest challenges. That’s why both the business plan and the marketing plan must present a realistic picture of the needed funds to start and sustain the business.