A business plan is a written description of your business and how it will operate, and the business goals you hope to achieve in the coming years.
It can be an internal document that you use to keep your team focused, or it can also be used as a tool for attracting investors and lenders.
Business plans vary greatly in their detail and length depending on their specific purposes. Writing one can seem like a daunting task when you first start out but once you get the basics down, writing business plans becomes much simpler.
How to Write a Business Plan for Your Online Business
In today’s business environment, where online businesses are easy to launch and cost little to maintain, a business plan is a necessity if you need financing from angel investors, venture capitalists or banks.
Even if you don’t need funding right now, a business plan can be a useful business management tool. It can help you to set clear business goals and hold yourself accountable for achieving them, while also helping you have a better sense of direction in day-to-day business operations.
As business environments quickly change, being able to spot problems early on such as emerging competition or changing industry trends is important for your success.
What Should Your Business Plan for Your Online Company Include?
Use the following outline for a business plan to most effectively create your own.
1. Executive Summary
Your business plan should begin with an executive summary.
Its purpose is to summarize your full plan and give business investors and other readers a quick overview of your business and what you do.
The first sentence or two should immediately explain what business you are in and why this business is unique or different from other companies.
Other items to include in your executive summary are as follows:
• A brief history of the business
• Mission statement
• Company background (such as where the idea came from, any previous funding you’ve received)
• Future plans – why invest now? What does this business aim to achieve? How will it stand out against competing companies? How much money do you require? How will it be used? How long will the business take to become profitable?
2. Company Analysis
Provide background on your company here and include the following information:
- your legal form of organization (LLC, corporation, sole proprietorship, etc.)
- location and incorporation date
- business type
- number of years in business/when you launched
- any accomplishments to date
3. Industry Analysis
Include information on your market, including market size and key industry trends. Use this information to show you truly understand your market and that your company is positively positioned in it. You can hold meetings or a video conference to discuss all the possible strategies and trends in your industry.
4. Customer Analysis
Document here who your key customers are. Also detail their needs and demographic make-up (age, gender, income, etc.). Specify how your company serves your customers’ needs.
5. Competitive Analysis
Identify and document your key competitors here. Talk about both their strengths and weaknesses. Importantly, discuss how your company compares to them and how you will build a competitive advantage.
6. Marketing Plan
Here you will discuss the products and/or services you will offer on your website. You will also discuss the specific promotional methods you will use to gain customers for your online business.
For example, will you use public relations, social media marketing, pay-per-click advertising? Document each promotional method in this section of your plan.
As much as possible, detail the expected customer acquisition costs from each promotional method you expect to employ.
7. Operations Plan
Here you will detail the key day-to-day activities your company performs and identify the key milestones you hope to achieve in the next five years.
Your milestone chart should include dates when you hope to complete milestones such as attracting your Xth website visitor, hiring your Xth employee, reaching $X in sales, etc.
8. Management Team
In the management team section of your plan you will document the key members of your team. Specify who on your team is responsible for core tasks such as marketing, business development, operations, etc.
You can also include an organizational chart showing who reports to whom.
Importantly, include the backgrounds of your key team members and show how they are uniquely qualified to execute on their roles.
9. Financial Plan & Projections
If your business needs funding, here you will specify how much money your business needs and where the money will be used.
Include five-year projected income statements, balance sheets and cash flow statements so you understand your business’ goals and expectations. These projections will also help investors and lenders judge your company.
Once your business plan is complete, make it as professional as possible by checking your grammar, and adding charts and graphs for visual appeal.
Summary
Completing your business plan forces you to think through each of the key elements of your business. You will look deeply into your industry. You will assess your competition.
You will scrutinize the different customer segments and figure out the best ones to serve. You will figure out the best ways to promote your company. You will identify the milestones your business must achieve.
You will determine how much funding you need and for what purposes. And you will make sure you have the right management team to execute upon the opportunity in front of you.
Armed with your plan and this intelligence, you can attract investors, partners and/or employees and have a roadmap to grow your company.
