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How to Create a Business Plan: The Key Steps

If you’re committed to turning your passion project into a profitable venture, you may want to consider building a business plan.

A business plan is a roadmap for your business. It helps you define your goals, strategies, and financial projections. It’s also essential if you’ll ever need to attract investors or secure funding.

Whether you have a small business on the side or a business that’s forecasted to make millions, a business plan can be a valuable tool.

If you’re thinking about starting a business, or if you’re already in business and want to take it to the next level, you should consider whether or not a business plan can benefit you.

In this article, I’m going to tell you exactly how to create a business plan that will support your company’s growth.

Psst… this article is part 3 in a series of articles about turning your side hustle into a money-making machine. You can find the earlier series of articles as follows:

Passion to Profit 101: How to Choose a Passion Project That You’re Truly Passionate About

Passion to Profit 102: How to Do Your Research to Build a Profitable Side Hustle

Keeping It Simple

Before we dive in, a point of clarification. The business plan you would need for a small business is not the same as the business plan you would need for a large business.

The fundamentals are the same, but you’ll need a far more in-depth and detailed business plan for a large business, which isn’t what we’re going to focus on in this article.

I’m a big fan of keeping things as simple as possible, and yes, that includes a complex topic like building a business plan. Therefore, we’ll be focusing on the elements you’ll need for a “turn your passion into profit” kind of business plan… not a large business.

That said, this article is probably not going to help you build a billion-dollar business, BUT it will help you build a simplified business plan that will help you jumpstart your business growth. I’ll also share a few resources to help you build a more detailed business plan, in case that’s what you need.

Also, a note… Complex business plans are usually unnecessary for smaller businesses (like I envision you probably have in mind). So do yourself a favor and keep it simple!

How to Create a Business Plan: The Simple Version

Ready to dive in?

Here is exactly how to create a business plan, starting with the sections you’ll need:

1. Executive summary

The executive summary is a brief overview of your business plan. It should include your business idea, your target market, your competitive advantage, and your financial projections.

As a small business owner, this should be a simplified summary of the remaining sections in your business plan. I recommend creating this section last, as it is far easier to create your summary after you’ve already put thought into the other sections.

2. Company description

Your company description should provide details about your business, including products or services, your target market, and the competitive advantage.

How will you outsell your competitors? Why would your target audience buy from you? Reflect on these elements as you’re building out this section, and your company will be better positioned for success in the long term.

3. Market analysis

This section should analyze the market for your products or services. It should include information on the size of the market, the growth potential, and the competitive landscape.

Your market analysis should give you some idea of the potential for profit in your business in the short and long term.

If you plan and do your research before starting your business plan, then you may already be well prepared to complete this section!

4. Management and organization

Your management and organization section should describe the management team and the organizational structure of your business.

As a small business owner, you may simply be a team of one, which is totally fine! You may find it helpful to detail the unique strengths you’ll add to your business. If you need some inspiration, consider reading Strengths Finder.

5. Products and services

While the market analysis section provides a brief overview of your products or services, this section should describe them in detail. You’ll want to include information on the features, benefits, and pricing of your products or services.

Don’t stress if you’re not sure about all of the products and services your business will sell. It’s completely natural to add new services and products down the road. In fact, new products or services can be an important driver of business growth!

Add as much detail to this section as you can for now. You can always add more later if needed.

6. Marketing and sales plan

This section should outline your plans for marketing and selling your products or services. It should include information on your target market, your marketing channels, and your sales strategy.

You’ll want to get detailed about who your target audience is, and where your business can find them. This section will help you create a road map to properly target and sell to your audience in the way you uniquely serve them. Give this section some thought to better position your business for long-term success.

7. Financial plan

The financial plan should provide financial projections for your business. It’s essentially a forecast for what your business stands to make. It should include information on your revenue, expenses, and cash flow.

Of all the sections in your business plan, there’s a decent chance this section will be the most challenging to fill out. In fact, you can skip it altogether if you’re not sure what to do. However, I recommend adding whatever detail will help you build a strategy for success.

On another note, if you need help keeping track of your goals (financial or otherwise), I highly recommend using ClickUp.

Appendix

The appendix can be used to include additional information that is not essential to the business plan, such as financial statements, product brochures, or marketing materials. You may not initially have anything to add to this section, but if you do, then include it here.

How to Create a Business Plan That’s Relevant

A business plan is a living document that should be updated regularly as your business changes. It can be a valuable tool for helping you achieve your business goals, but only if you keep it current.

Over time, you may add products and services to your business. You may even choose to remove some. Perhaps your target audience will even change along the way. 

These things are all completely natural. In fact, your business must be somewhat flexible to stay relevant in the market. But do yourself a favor and make sure you keep your business plan up to date.

Additional Tips

Here are some additional tips as you write your business plan:

• Be clear and concise. Your business plan should be easy to read and understand.
• Be specific. Provide as much detail as possible about your business, its products or services, and its target market. Use data and evidence to support your claims.
• Be realistic about your goals and projections. Don’t make unrealistic financial projections or promises.
• Get feedback from others. Ask other entrepreneurs, business advisors, or investors to review your business plan and give you feedback.
• Be persuasive. Your business plan should be able to convince potential investors or lenders that your business is solid.

If you’re still not sure how to create a business plan, there are many additional resources, such as the list I’ve included at the bottom.

Conclusion

A business plan is a valuable tool for any entrepreneur. It can help you clarify your goals, develop strategies, and attract investors. Your business plan may be just the tool that allows you to grow your business and build a sustainable profit.

Have any questions or are you curious and want to learn more? Tell me about your business (or business idea) in the comments below and I’d be happy to answer any questions you have.

Best of luck to you on your journey to business success!

How to Create a Business Plan: Additional Resources

Looking for additional resources to help you build your business plan? Here are some additional resources that you may find helpful:

• How to Write a Business Plan 
• The Ultimate Guide to Writing a Business Plan
• Sample Business Plans

Think learning how to create a business plan will help you FIRE Your Career? Check out the posts page for more ways to FIRE Your Career and achieve financial freedom.

FIRE Your Career: Achieve Financial Freedom Through Your Career & Spend MORE Time Doing What You Love.

Resources I recommend in this article:

Strengths Finder (book to help you uncover your innate strengths, includes a free personality quiz)

ClickUp (my recommended goal-tracking and project-management tool)