Creating a business plan is the first step to getting any kind of funding. They can be simple and concise or detailed with hundreds of pages. There are countless samples out there, but the options can make getting started overwhelming.
This guide answers:
- What are business plans for?
- Can I start my business without a business plan?
- How long should my business plan be?
- What are the most important aspects of a business plan?
- Are financial projections important?
- How do I start writing a business plan?
- Where can I find additional support for business planning?
This will give you an understanding of how to approach the business planning process and set you up with free resources to get started.
What are business plans for?
A business plan is a blueprint to help you run your business. It typically provides details on the long-term growth plan for a business. In other words, it helps you get the idea out of your head and into the real world.
A business plan pushes you to establish tangible objectives and create an actionable timeline to start generating income. It gives you a foundation to start from, grow from, and be more competitive. It will also help you market your business and manage its finances.
When applying for funding, banks and financiers will want to see your plan to get an understanding of how your business will actually make money. In Canada, it’s reported on average almost 40% of businesses fail after 5 years and almost 60% after 10 years. Understanding those odds, they’ll want to know you’ve figured out a viable way to succeed and are worth investing in. A business plan will support your long-term success.
Can I start my business without a business plan?
Technically you can start a business without a plan, but it probably won’t survive. A business plan will turn your idea into something profitable and help you manage the countless obstacles of launching a startup.
Writing a business plan can seem intimidating, but if you’re really passionate about starting your business, it shouldn’t stop you. If you’re going to run a successful business, you need to be willing to step outside your comfort zone and do the work that will help make it a success.
In addition to helping you get funding, your business plan can help guide you when things don’t go as expected (and they usually don’t).
How long should my business plan be?
Business plans are not one-size-fits-all. They’re as unique as every founder out there and dependent on your specific needs.
Depending on the nature of your business and current capacity, the way you address all the core elements of the business plan can be a concise couple of pages or an extensive document with hundreds of pages of detail. What’s important is that it addresses core elements of your offering, target market, approach and finances.
Ultimately, the plan needs to work for you and support your goals.
There are two types of business plans – lean and comprehensive.
A lean business plan is quick to assemble and simple for startups. They’re around 1-3 pages and more of a summary than an actual blueprint for the business. They’re useful for summarizing the business and keeping it flexible enough to quickly pivot as needed.
Although high-level, it should still touch on the six elements included in the next section. If you’re still early in your business and figuring out a lot of details, a lean business plan can be a good starting point.
A more traditional plan can be upwards of 30 pages (even hundreds with appendices) and provides more concrete details and data to support how the business will succeed over the next 3-5 years.
When applying for funding, you’ll generally need this more comprehensive plan with market research, detailed financial information and actionable steps.
What are the most important aspects of a business plan?
Regardless of length, a business plan needs to demonstrate the specific business opportunity, how it will be executed and how it will be funded and, in turn, make money. The plan needs to reassure potential investors that your business is well-researched and primed to succeed long-term.
To varying extents, your business plan should address:
1. Business Overview: What are your business mission and objectives? What is your product/service? What is unique about it? What is the problem your business is solving and in what industry? You might want to add further details on your company’s history.
2. A Market/Competitor Analysis: What other products/services like this currently exist on the market? How do they compare to your offering? You might want to include a SWOT analysis to demonstrate a better understanding of what your specific strengths, weaknesses, opportunities, and threats are and where your business stands relative to your competition.
3. Target Market: Who’s your target audience? What are their demographics? Why do they want what you’re offering? You might want to create more detailed audience personas. You want to ensure you have a clearly defined audience and your offering is not too broad.
4. Operating Plan: How are you going to make this happen? What’s the timeline? What is your staffing plan? Do you need to hire additional people and if so, when? What are everyone’s roles and responsibilities? Does your team consist of full-time employees? Part-time? Freelancers? You might want to include an organization chart to further detail your organization structure.
5. Marketing Plan: How are you going to market this to your audience? What tactics and strategies will you implement to engage your audience? What tools will you use? When will this happen?
6. Financial Plan: What are your startup and operating costs? How much funding do you need? Where do you plan on getting funding? How will you generate revenue? Do you have a break-even analysis? Depending on your plan, you might want to include specific financial documents.
Traditional business plans also require a 1-2 paragraph executive summary that provides a high-level look at these core elements of the plan.
It’s valuable to add research and statistics to back up your details where possible. You can also add charts and visuals to back up your information.
Are financial projections important?
While you can start a business with little to no money, you need to prove that it has revenue potential. A startup is just an idea until it’s profitable.
Once established, scaling your business also comes with expenses. Financial projections help you understand how you’ll continue to generate profits and get a return on your investments.
Your business may be too new for any kind of tangible financial data, but you’ll still need a financial plan and budget to get it off the ground.
When looking to get funding, you’ll need to demonstrate your financial goals within an established time frame. How much revenue are you going to generate by a certain date? What expenses need to be considered?
A good place to start is by creating a budget for your business. As a new business without existing balance sheets and cash flow statements to reference, you’ll want to do some research to better understand (and demonstrate) industry-standard revenue and costs. You’ll need to know fixed costs, expenses and income sources.
Based on this budget, you’ll also want to create cash flow projections to estimate how much revenue you’ll actually be bringing in on a quarterly/annual basis. We have the Business Viability Kit available to support you.
Over time, you’ll need to compile and present data including income statements, profit and loss statements and cash flow statements to get more funding.
How do I start writing a business plan?
There are a number of really great business plan templates you can use, listed below.
Before you can fill them out, you’ll need to do your research. You need to be able to address the core elements of your industry, offering, target market, and audience with data to back it up.
Do you know who your competitors and target market are? Why is your industry worth investing in at this point in time? Once you have the research-backed information on hand, you’ll be ready to start writing and filling out the sections.
Depending on your needs, determine whether a lean or extensive business plan is more fitting for you.
Where can I find additional support for business planning?
Here are some helpful business plan templates so you can get started.
- BDC Business Plan Template
- Futurpreneur Business Plan Writer
- RBC Business Plan Builder
- Shopify Business Plan Template
When writing your business plan, make sure to use clear language, focus on actionable objectives and provide data and research to back your ideas where possible. The research and information you put into your business plan will also make applying to future funding proposals a lot more efficient.
Explore our website for more free resources and articles to support you with your business planning.