10 Business Planning Tips For First-Time Founders
Starting a business for the first time and worried about how to make a good plan?
You’re in luck.
In this article, you’re going to learn ten business planning tips to help you get started in the right direction.
So without further ado, let’s get rolling.
Starting a business requires a lot of work. In fact, it often feels like there are one thousand things to tackle all at once.
From seeking legal advice to renting office space and forming an LLC, you need to document everything. It can be stressful for first-time founders.
And without a good business plan, communication, management, and planning becomes a problem in your business.
A business study suggests that 21.5% of startups fail in the first year, partly because of the lack of proper planning.
For that reason, the importance of proper planning cannot be understated, as it’s the foundation of your business.
The decisions you make early can make or break your business growth.
But how do you make a good business plan?
If you’re considering starting a new business and want to learn how to make a successful business plan, don’t skip any of the tips shared below.
What is a Business Plan
A business plan is a document that outlines the steps you’ll take to start a business successfully and grow it.
It covers everything from what you’ll sell, the market, how you plan to sell, the type of funding you’ll need, your financial projections, the structure of your business, etc.
A good business plan helps to establish a focus for your business, attract investors, and other professionals who can evaluate your startup.
In a nutshell, a business plan helps you prove to potential investors whether your idea is worthwhile or not.
A typical business plan consists of the following components:
- Executive summary
- Company description
- Market research
- Competitive analysis
- Management and organization
- Description of your products and/or services
- Financial projections
- Sales strategy
- Request for funding
- Marketing plan
Before we share the business planning tips, let’s take a look at some basic things you need to learn:
Understand what makes your business unique
First off, before anything else, determine what makes your business different from others.
Remember that your idea could have been implemented by someone else already.
So you want to set yourself apart from the competition.
So ask yourself the following questions:
- What makes my business idea different from others?
- How do I intend to promote my products and or services?
- Who are my target customers?
Think as much and as broad as you can to narrow down how different your business is before you get into the nitty-gritty of your business plan research.
Keep it short and concise
Make your business plan short and concise. There is a lot to gather in your market research; however, include only the important details.
Your business plan should be quick to read and easy to skim as well.
Keep it breathing and living
As a rule, a business plan can be updated or changed at any time. So keep this in mind as you go.
With that, let’s learn the business planning tips for first-time founders.
Business Planning Tips For First-Time Founders
1. Determine Your Audience
It’s easy to think that your idea is great enough that everyone will love it.
Don’t fall for this thought.
The first step to launching a successful business is to identify your target customers.
Your target customers are the driving force in every decision you make.
So your business revolves around them.
Before diving into your business plan, identify your target market.
Identifying your target audience can help you tailor your marketing and sales strategies to the right people.
This is where you’ll need to conduct market research.
It’s simple. Without customers, your business will fail.
Many businesses have failed for not conducting proper research.
So no matter how great your idea is, make sure you conduct thorough market research.
You can start your market research by segmenting your audience in the following categories:
Then narrow down your research to:
- Income level;
By the end of your market research, you could have narrowed down your target market to:
- Ages 30 to 45;
- Living in Boston area;
Remember that you’ll use the target market in other sections of your business plan.
2. Determine Your Business Planning Goal
With today’s ever-changing economy, it’s more important than ever to take the time to plan and strategize.
Start by asking yourself the “Why” of your business plan.
Is your business plan intended to give you additional clarity and determine whether your idea is viable? Or are you making a business plan to seek funding for your business?
Having well-thought-out and written business goals during the planning phase provides a roadmap for your business success.
So, determine your business goal and focus on it.
3. Start Your Plan With A Pitch
A business plan pitch is a single-page overview (or brief) of your business that summarizes the nitty-gritty details of your business plan.
Your pitch should be straightforward enough to help investors or potential business partners understand your idea.
4. Your Business Plan Shouldn’t Consume A lot of Your Time
Even though the business plan is an essential document for your business, you shouldn’t spend too much time on it, unless you’re actively seeking funding.
You need to devote most of your time to building and selling your products or services.
5. Do a Competitor Research
The last mistake you want to make is to start your business without knowing your competitor(s), their products, marketing strategies, etc.
When studying your competition, you need to learn about their mistakes, know their customer base, and more.
It would be easier to evaluate and adjust your business plan accordingly once you know your competition.
6. Don’t Focus on Perfection
As a first-time founder it’s easy to get stuck in the perfection cycle while looking to make the perfect business plan.
Don’t fall for this temptation.
Don’t focus on perfecting your business plan but focus on revenue-generating activities, product-market fit, and sales while keeping your business plan simple.
7. Get Inspired on the Internet
There is a ton of business plan examples on the internet today. No matter the type, size, or kind of business you want to start, you can look for inspiration online.
Explore as many business plan examples as you can to get an idea of the details to include in yours.
Ensure you’re getting inspiration from reliable sources such as Udemy and many others.
8. Keep Your Executive Summary Concise
In some cases, investors or potential business partners may not read your business plan beyond the executive summary.
For that reason, you need to keep it concise while clearly stating the problem your business intends to solve, how it’s going to solve it, and how your business sets itself apart from the competition.
In a nutshell, demonstrate your value proposition succinctly.
9. Get Your Business Plan Read by Someone Else
No matter how careful you are when writing your business plan, you’re going to make silly mistakes that can hurt the usefulness of your document.
The last mistake you want to make is presenting a business plan full of typos, grammar, and other avoidable mistakes.
Ask someone to read over your business plan once you’re done writing it.
Having someone read it could help to catch any mistakes. They can also help with structuring and organizing the plan especially if you’re making one for the first time.
10. Leave Room For Future Revisions
As stated earlier, a business plan is a living document that can be truncated, reorganized, restructured, and updated several times in the course of business planning.
For that reason, when building your first business plan, prepare for revisions.
So there you have it: 10 business planning tips for first-time founders.
If you’re making a business plan for the first time, we hope these tips will open up your eyes.
But before you go, let’s take a look at some of the mistakes first-time founders are likely to make with their business plans.
Business Plan Mistakes To Avoid
While there is nothing like a perfect business plan, you need to avoid the following problems when making yours:
Even though you can’t make a perfect business plan in your first trial, you need to avoid having missing page numbers, inconsistent margins, charts without labels or incorrect units, and other avoidable mistakes.
To avoid all these problems in your business plan, have it read and proofread by someone else before you present it to potential business partners or investors.
Incomplete business plan
A good business plan must cover all essential areas including marketing, sales, customers, products and services, competition, etc.
It should also include detailed financial projections and many other important things.
Poorly written plan
While there has never been a perfectly written business plan, no one would want to read a plan full of spelling, grammar, and punctuation mistakes.
Of course, investors and potential business partners aren’t looking to invest in a company run by English experts, but a poorly written business plan can piss them off.
You need to show some sense of professionalism by proofreading and editing your plan carefully.
You also need to avoid making a vague and too detailed business plan.
Starting a new business can be exciting. It’s easy to rush things up. However, to set yourself up for business success, you need to take some time to plan things out.
Taking the time to write a good business plan could increase your chances of securing an investment or getting capital funding and could also improve your potential growth rate.
If you’re writing a business plan for the first time, we hope you’ll find these tips helpful.
Happy business planning!