Writing a business plan can seem intimidating. You’re committing your great idea to paper and fleshing out the details of how you’re actually going to start and grow your business. While all of this can seem like a big task, it doesn’t have to be as difficult and time-consuming as it seems.
For over 15 years, I’ve been writing business plans, reading plans for major business plan competitions, and raising money for startups. Along the way, I’ve learned a few things that can make the business planning process much easier and faster.
Here’s my list of tips, tricks, and resources.
Start with a pitch
This might seem a bit backward—don’t you usually do a pitch for investors after you’ve written your plan? Well, it turns out that this is one of the biggest hacks in business planning, and will shorten your business plan development cycle substantially.
A one-page pitch is a simple overview of your business. It’s the high-level plan of what you want to do, who your customers are, how you’re going to make money, and what your key strategies are for sales and marketing.
Creating a one-page pitch will only take you about 30 minutes and you’ll have a complete outline of your business plan ready to share with business partners and anyone else willing to give you feedback on your idea.
The great thing about a one-page pitch is that it’s easy to share, easy to read (no one’s going to read that 40-page plan you send out), and easy to update. As you refine your business model, you can quickly update your pitch without wasting a lot of time.
Understand the problem you are solving
If you aren’t solving a problem for your customers, you don’t have a business. So, having a solid understanding of the problem that you are solving is necessary if you’re going to be successful.
This is probably the most important step in the business planning process and the one that’s most often missed. I’ve even seen MBA students from top schools like Harvard and Stanford forget this crucial part of their business plan.
The key is to understand and explain the problem that you are solving for your customers—and make no mistake, every successful business is solving a problem for their customers. For a restaurant, a problem might be described like this: “There’s no good Mexican food in this neighborhood.” For an apartment search website: “It’s difficult to wade through Craigslist posts to find an apartment that meets your needs.”
Explaining the problem you are solving explains what your opportunity is. It explains why your business exists and the need that it is filling in the marketplace. Although this step is relatively simple, too many startups skip it, making it harder for them to raise money and grow.
One of the best things you can do to understand your customers—and get a real handle on the problems you are solving for them—is to get out from behind the computer and go out and actually talk to them face-to-face.
If that’s not practical, or you just want to augment your face-to-face conversions, I recommend using these tools and resources:
- Typeform: Create beautiful and useful surveys. Typeform surveys are also really easy to fill out on smartphones.
- SurveyMonkey: This old stalwart is an excellent survey tool. They have a huge library of sample surveys and survey questions that you can use as the foundation for your own survey.
- User Testing: Getting feedback on a prototype or design can be challenging. User Testing can make this process easier.
- Talking to Humans: A great book to help guide you through the process of talking to your potential customers. The book is free to read in PDF format.
Know your market
When you’re talking to your potential customers, you’re really getting to know your market, and you’re doing market research.. This kind of in-person research is called “primary market research” because you’re gathering information firsthand, from the actual source.
The other kind of research that you might need to do when you’re planning your business is called “secondary market research.” This is when you gather information from other sources—typically things like the number of people that live in a city, or the number of people in a certain income bracket.
You’ll want to do some secondary market research to figure out how big your market really is. Even though you might have identified a real problem to solve, you still need to make sure that there are enough potential customers to build a real business.
Fortunately, you don’t have to pay an expensive consultant to gather this data. You can easily do it yourself.
For the U.S. market, here are my favorite resources for gathering market data:
- Data USA: A collaboration between MIT and Deloitte, this is an excellent starting point for U.S. data. It aggregates various U.S. Government datasets and makes them easy to search and use.
- Statista: This is a great source of industry and market research. It also includes data on various industries, so you can get a sense of how much people are currently spending on things like, “daily deal and group buying sites in China.”
- Consumer Expenditure Survey: If you want to know how much people are spending in different categories, this Bureau of Labor Statistics resource is a great place to start.
- FreeLunch: If you’re looking for free economic, demographic, and financial information, this is a good free resource to get you started.
Research the competition
Good business planning also means taking the time to get to know your competition. For your business to succeed and grow, your plan needs to show how you’re going to stand out from the competition. What’s going to make you different? Is it price? Is it better service? Is it better features?
When you’re talking to your potential customers, it’s always a good idea to ask how they’re solving their problem now. You can get a great list of competitors this way.
To understand your competition, a great option is to “secret shop” them, if you can. Pretend to be one of their potential customers and see how they try and sell to you. You’ll get some great insight into how your competition views its products and services, as well as gather important information on pricing and what they offer.
Another option is to mine the web for data. Of course, you can also read reviews on sites like Yelp or Angie’s List if your competitors are on those platforms. If your competitors are online companies, there’s a wealth of information that you can learn—from what keywords your competitors rank for, to what online advertisements they run and what audiences they target.
Here are my favorite resources for competitive market research:
- SEMrush: To get detailed information, you’ll have to sign up for a paid account. But, even the free information that you can get on your competitor’s online marketing is incredibly useful and interesting.
- Spyfu: This service is fairly similar to SEMrush. It’s worth checking out as an alternative solution.
- SimilarWeb: If you want to know how much traffic your competitors are getting to their site, give SimilarWeb a try. I’ve found it to be surprisingly accurate.
- SizeUp: If you’re a more traditional brick-and-mortar business, check out SizeUp. They can help you pinpoint your local competitors and give you an idea of what they spend on marketing, health care, and more.
Do the numbers
Probably one of the most intimidating parts of business planning is forecasting and budgeting. It’s certainly always more fun to think about your product, your logo, and your marketing.
But, if the numbers don’t add up, your business isn’t going to work. Also, if you’re looking for funding or a business loan, you won’t have any idea how much money you should ask for if you don’t put together a basic forecast.
This is one area where I don’t recommend trying to reinvent the wheel. Use a proven tool to build your forecast so you don’t have to worry about things like Excel errors, or how to get good looking charts and graphs into your business plan or your pitch presentation.
Here’s my recommendation for building your financial forecasts for your business plan. There are also a few links to some useful resources if you do want to give it a shot on your own:
- LivePlan: I’m biased, but LivePlan truly does make it easy to get your financials done, even if you’ve never seen a balance sheet or P&L before. If you can use TurboTax, you can use LivePlan, and you won’t have to worry about a potential investor finding an error in your business plan.
- The Key Elements of the Financial Plan: If you want to give it a shot on your own, we have a guide that tells you all about each portion of your forecast, and walks you through the process of building your own.
- Cash Is King: Don’t start a business without making sure you understand cash and profits, and how the two differ. If you learn one thing about business forecasting, this is it.
- Investopedia Dictionary: If you’re struggling to understand some of the terms in your financial forecasts, give Investopedia’s dictionary tool a try.
If you’re like most people, you’re going to need some money in your pocket to get your business off the ground. A loan might be the right choice for you if you have some assets to use as collateral. Or, perhaps you’re going to go after funding from angel investors or venture capitalists.
Here are my favorite resources to help you search for a loan, get in front of investors, and raise money from the crowd:
- Fundera: With a single application, you can get your business in front of over 25 different lenders. Fundera works with banks as well as non-traditional lenders to find the right loan solution for you.
- Connect Lending: If you know you need a traditional bank loan, check out Connect Lending. They’ll shop your application to multiple banks and present you with the best options.
- Pitch Deck Template: If you’re going after angel investors, venture capitalists, or are looking to raise money from friends and family, a good pitch presentation is going to be critical. Your pitch deck is your calling card and often the first thing potential investors see when they’re considering investing. Download this free template to build your presentation.
- AngelList: With your pitch presentation honed, you’ll want to get in front of investors. Start by creating a profile on AngelList, one of the largest and best platforms for reaching angel investors. VCs also browse these profiles, so it’s a great place to post information about your company.
- Gust: Like AngelList, Gust will let you post a free profile for your business and help you get in front of angel investors. There’s no downside to posting on both platforms.
- GoFundMe: If you’re raising money from friends and family, a platform like GoFundMe can help formalize the process.
- Kickstarter: Perhaps the platform that started the crowdfunding movement, Kickstarter is still a great platform for product businesses and creative projects.
Business plan templates and examples
One of the best ways to jump-start the business planning process is to take a look at how others have done it. Fortunately, Bplans has a great collection of resources to help you get your planning done:
- A Step-by-Step Guide to Writing a Business Plan: While we always recommend that you start your planning process with a pitch, there’s a good chance you’ll need a detailed business plan as well. This guide holds your hand through the process, detailing what you should include in each section.
- Business Plan Template Download: When you’re ready to dive in, start with our business plan template. Simply download the free Word document and start filling in the blanks. This template is in an SBA-approved format so you know it will cover everything lenders look for in a plan.
- Sample Business Plans: If you want to read some complete sample business plans, or even download them so you can use them as a starting point (they’re free), check out our library of examples.
I hope these tips, tricks, and resources have helped you get your business planning process off the ground.
If you have questions or comments, please don’t hesitate to post them in the comments section below.