Thinking about starting your own business? You’re far from alone. In fact, according to the most recent data from the U.S. Census Bureau, an average of 4 million businesses have started every year over the past half decade — and each year has seen more businesses created than the year before. If you’re one of the millions considering turning your business dreams into a reality, you’ll need a business plan. December is National Write a Business Plan Month, and the SBA wants to help you get off on the right foot.
Which Type of Business Plan Is Right for Me?
The good news is there’s technically no wrong way to write a business plan. It all depends on your unique needs and goals, and every business is different. The majority of business plans, however, fall into the following categories:
Traditional: You want to prove that your business is a valuable investment and that you’ve thought through your concept. A traditional business plan is a great way to accomplish both those objectives. Typically, several pages, and with multiple sections, a traditional, comprehensive business plan may take more time to write, but it’s worth it — especially if you’re seeking financing from traditional lenders and investors. If you are going the traditional route, you’ll need to include some combination of the following elements: executive summary and company description; market analysis; organization and management structure; service or product line description; marketing and sales strategy; and funding requests and financial projections. Be thorough. It will showcase the readiness of your ideas.
Lean Startup: Perhaps your goal is to launch your business quickly. Maybe you want to leave room to update your plan later on down the line. After all, a business plan isn’t something that you put together and never revisit. It’s a living document that you consult and adapt throughout your business journey. Whatever the reason, a lean startup plan could be the way to go if you prefer a more streamlined approach. This format is defined by summarizing only the most important details, oftentimes into a single page. It includes key elements like partnerships, activities, and resources; value propositions; customer experience, target market, and channels; and cost structure and potential revenue streams. Think about the big picture and refine as you go.