How to create a business plan

Four important reasons to build a business plan:

1. Decision-making: Writing a business plans help you clear up confusion by putting specific information down in black and white. Making tough decisions is often one of the hardest and most useful parts of writing a business plan.
2. A reality check: The first real challenge after deciding to launch a new venture may be writing a business plan. Through the process, you may realize your business idea isn’t quite as solid as you thought. This may feel like extra work, but the effort you put into improving your idea during this step can significantly boost your chance of future success.
3. New ideas: Discovering new ideas, different approaches and fresh perspectives are invaluable parts of the business planning process. Working closely with your concept can lead to unexpected insights, shifting your business in the right direction.
4. Developing an action plan: Your business plan is a tool that will help you outline action items, next steps and future activities. This living, breathing document shows where you are and where you want to be, with the framework you need to get there.

Business plan guide: how to get started

Use this exercise to gather some of the most important information. When you're ready to put an outline together, follow our standard business plan template (PDF) and use this business plan example to learn how to create a business plan. Once your outline is finalized, you can share it with business partners, investors or banks as a tool to promote your concept.

A well written business plan should contain:

• Vision: Your vision statement sets the stage for everything you hope your business will accomplish going forward. Let yourself dream, pinpointing the ideas that will keep you inspired and motivated when you hit a bump in the road.
• Mission: A mission statement clarifies the purpose of your business and guides your plan, answering the crucial question, "Why do you exist?"
• Objectives: Use P business objectives to define your goals and priorities. What are you going to accomplish with your business, and in what timeframe? These touchstones will drive your actions and help you stay focused.
• Strategies: Your objectives describe what you’re going to do, while your strategies describe how you’re going to do it. Consider your goals here, and identify the different ways you’ll work to reach them.
• Startup capital: Determine what your startup expenses will be. Having a clear idea will allow you to figure out where the money is coming from and help you spend what you have in the right areas.
• Monthly expenses: What do you estimate your business’ ongoing monthly expenses will be? This may change significantly over time — consider what your expenditure could be immediately after launch, in three months, in six months and in one year.
• Monthly income: In order to cover your expenses (and hopefully make a profit), you will need to estimate your income. What are your revenue streams? It's always wise to diversify your income. That way, you won’t be tied to one stream that might not be profitable as quickly as you need it to be.
• Goal-setting and creating an action plan: Once you have all the specifics outlined, it's time to set up the step-by-step action items explained in this printable business plan outline. This process will utilize the hard work you've already done, breaking each step down in a way that you can follow.

A business plan isn’t necessarily a static document to set-aside. With this roadmap you will be better equipped to adjust your priorities, stay on track and keep your goals in sight.

Business plan: an outline

Use this exercise to gather important information about your business.

Answer these questions to start your planning process. Your responses will provide important information about your business, which you can use as an overview to develop your plan further.

Vision

• What is your dream?
• What do you feel inspired to do or create?
• What keeps you motivated, even in the face of uncertainty?

Mission

• Why does this business exist?
• What purpose(s) or need(s) does it fulfill for customers?

Objectives

• List the goals of your company, then number them in order of importance.
• What will the business accomplish when it’s fully established and successful?
• How much time will it take to reach this point?

Strategies

• For each goal or objective listed above, write one or more strategies or actions required to complete it.

Startup capital

• List any and all startup expenses that come to mind.
• Next to each:
  1. Estimate the cost of any expenses you can.
  2. List the most likely source of the funding.
  3. Circle the high-priority expenses.
  4. Assess whether your available capital is going toward the high-priority items. If not, reconsider the way you will allocate funds.

Monthly expenses

• If you can, estimate your business’ ongoing monthly expenses immediately after launch, in three months, in six months and in one year.
• If you can’t, what information will you need in order to estimate your expenses?
• Make sure to account for all expenses, even the seemingly small ones.

Monthly income

• What are your revenue streams? Estimate your monthly income accordingly.
• Which revenue sources deliver fast or slow returns? Are there other sources you could consider to diversify assets?
• This step will also help you determine the price you need to charge and volume you need from your product or service to meet your income goals.

Next step

After completing your outline, reference your responses as you work through a traditional business plan guide. This next step will allow you to expand and add more detailed information to your plan.

Starting a business requires a comprehensive plan. From there you can make decisions, test ideas, uncover new perspectives and create an actionable roadmap.