Creating a new business can be a tough journey. Doing so while working full-time may seem tougher, but this route actually offers several benefits. You can continue earning money to put towards your startup. But even if you only work an hour a week building your company, you still need a business plan.
A business plan is critical to every small business, even for pre-startups. Why do you need one so early? It serves as your map through what might be a bumpy journey. A business plan gives you the best shot at a smooth ride.
Business plans typically have four sections: the Executive Summary, the Business Details, Financial Forecasts and Supporting Data.
The summary does just what the name implies: sums up all the information in the business plan. It works as a short sales pitch for your business. Also, if you need funding, this is often the most important (or only) section potential lenders will read, so include all major information.
You want to write this last after you’ve finished the other sections.
In this section, explain your business model, what your business does and how you will make money.
- Description: What are you offering and why? Be specific. Let’s use an example: You want to create monogrammed silk neckties in bold colors and prints.
- Need: Explain why the world needs your product or service. What’s special about it? For instance, your neckties offer a mix of tradition (monograms) with modern style (bold colors and prints).
- Marketing: Who is your target customer, and how will you market to them? Where do you plan on finding them? In our example, are they millennials, grooms, dads, CEO’s?
- Sales: How do you plan on selling your product or service? For the ties example, will you sell online, in small boutiques, in department stores?
- Competition: Who are your competitors, and what sets you apart? How can you compete and win?
- Experience: List your experience and background and that of any co-founders. Let’s say you’ve worked as a tailor for ten years, and your partner is an accountant. You both have tremendous experience to run this tie business, so highlight your skills.
Another necessary section in your business plan is the financial forecast. Here you detail how much it will cost to start the business, where the money will come from and how you will spend it. You also include financial projections for growth.
- Equipment: What do you need to buy to start? Do you need a commercial sewing machine? What about the fabric?
- Startup money: Where will the money come from? Personal savings? You salary? Friends or family?
- Other funding options: Do you have other ideas of where you can get financing if needed? Perhaps outside investors?
- Projections: Forecast your income and expenses for your first year. Estimate how long it will take to break even.
This critical part provides backup evidence for everything you included in the business plan. Some data includes the size of the market for your product or service.
Creating a solid business plan will help you focus on what’s necessary to succeed. Read the remaining steps to entrepreneurship in the “16 Steps to Starting a Business While Working Full Time” guide.
Connect with a free business mentor at SCORE, and use the small business resources at The UPS Store near you. For more guidance on business plans, see SCORE’s business plan template gallery. Good luck on your exciting endeavor!