If you’re looking to start a new business venture or even just want to update your existing business plan, you’ll need to answer some key questions. These prompts will help you understand what needs to be done, who will do it, and how much it will cost.
| Takeaways |
|---|
| 1. Addressing key questions is essential in a business plan to ensure its effectiveness and success. |
| 2. A well-written business plan can significantly increase the chances of securing funding from investors. |
| 3. Understanding and defining your target market is crucial for tailoring your business strategies. |
| 4. Including comprehensive financial projections is vital to demonstrate the business’s potential profitability. |
| 5. Highlighting your unique selling proposition can differentiate your business from competitors. |
Who Are You?
- Who is the target audience?
- Who is the founder of the company?
- What is the founder’s background?
- What education does the founder have, or what training has she been through? If relevant to your product and industry, what certifications or credentials do you have in this area?
Where did you learn about your business idea, and how long have you been thinking about starting it up since then (e.g., years)? If someone else came up with it entirely independently from yourself, why are they not running this project now instead of letting you take over their idea for yourself?
Do they plan on getting involved at all after launch day if things go well enough for them financially and will there be any conflict between those two goals if so (e.g., will they try to take back control over development decisions because they’re afraid that keeping things going, as usual, could lead towards failure)?
Writing a business plan is a crucial step in turning your ideas into reality. If you’re wondering how to get started, check out our comprehensive guide on how to write a business plan in 9 simple steps. It covers all the essential elements you need to include for a successful business plan.
What’s Your Market?
The first question a business plan should answer is the most important: Who are you selling to? Many other questions will follow from this, but knowing who you are selling to the target audience is critical.
How big is your market? This will inform decisions about pricing and distribution as well as help determine whether or not there is enough interest for a business to be successful.
How strong is the competition in your industry and what does it look like for you? A good way of measuring this is by looking at current sales figures and growth rates, which can be found on company websites or through research firms like IDC or Statista.
What’s Your Product Or Service?
You can’t write a business plan without knowing what your product or service is. That’s the foundation of everything else you’ll be writing about in this document, so it’s important to get it right.
What is it? What does your product or service do? Be specific! How is it made? What materials are used in its creation and how do they contribute to its overall quality?
Where does that material come from or if you’re importing, who makes them overseas or otherwise remote location? How much labor goes into producing each item and how much time do you need to invest in putting together a new batch once one has sold out (if applicable)?
These are all questions that should be answered here because they help define what makes your company unique compared with other businesses selling similar goods (or services).
It’s also worth mentioning at this point whether or not any patents are pending on any aspects of this process as well as any patents owned by other companies that may infringe upon yours; there could be legal ramifications down the line if another entity decides to copycat some aspect of your operation without paying for licensing rights first.
Securing funding for your business is often a challenge, but a well-crafted business plan can make a significant difference. Learn more about how a business plan can help you attract investors in our article on does a business plan help you get funding.
What’s Your Marketing Strategy?
Your marketing strategy is the plan you put in place to help your business meet its marketing goals. It’s a roadmap of how you will use marketing tactics (e.g., advertising, PR, etc.) and resources (e.g., time, money) to reach the target audience that will help you achieve those goals.
Here are some questions that should be answered in your plan:
- What are your marketing goals?
- How do they relate to the overall business strategy?
- What are the main hurdles that could prevent you from achieving these goals? For example: Are there any factors outside of your control? Or is there an event or circumstance that might force a change in strategy mid-way through?
How Will You Reach Customers?
It’s great to have a product or service that people want. But if you can’t get it to them, then you won’t make any money. And if you do manage to reach customers and they still don’t buy what you’re selling, your business will fail anyway. So how will your company reach customers?
There are many ways: advertising, publicity, word of mouth, and sales. You’ll also need to consider marketing methods such as salespeople, referrals and brokers; distributors; resellers; affiliates; other means of distribution (such as direct mail).
Who Are Your Competitors?
You should know who your competitors are and what they offer. You need to know how they are different from you, how they are similar to you, and how they are better than you.
You also want to consider that some of these questions may not apply:
What services do they provide? If your business is a consulting firm, for example, the answer would be “consulting.” If it’s an auto repair shop, then “automotive repairs.”
How much do those services cost? This can vary depending on location or factors such as inflation over time; but generally speaking, if someone else’s product costs more than yours then there’s probably something wrong with it (or at least something appealing about yours).
Want to know why writing a business plan is essential for your entrepreneurial journey? Discover the benefits and step-by-step guidance in our comprehensive article on why you should write a business plan and how to do it.
Who Are The Key People Involved In The Company?
You should be able to count on at least two hands the number of people who will be helping you run your business. The most important fellow is you, of course. You’ll be doing a lot of thinking and creating so it helps to have an idea of who else you need working with you. Who do they bring to the table?
What role will they play in making sure that everything goes smoothly? How will their involvement benefit your business? Think about how these people are going to contribute and why they would want to join forces with yours.
Where Do You Want To Be In One Year/Three Years/Five Years?
The answers to these questions will help you make sure that your goals are achievable, measurable, and in line with the company’s vision, mission, and strategy. Depending on the type of business you run, there are many different ways to answer this question. For example:
If you’re a restaurant owner or food truck operator, one way to set your goals would be by increasing sales every year;
If you’re an e-commerce store owner/manager who makes most of his/her money from advertising revenue on Google AdWords, then one way would be by increasing traffic and conversions;
If you own an accounting firm where clients pay for services based upon how much time it takes them (such as $250 per hour), then another way could be by having more clients come through your door each month and paying more money per client too!
What Is Your Financial Plan?
The financial plan is a forecast of your business’s cash flow. It answers the question: How much money do you need to start and run your business? The plan also provides answers to how you’ll pay your bills and other expenses.
According to the SBA, there are two types of financial plans:
The income statement forecasts sales, costs, revenue, and profit over some time. It uses a timeline that shows when various events will occur within the first year or beyond. This type of financial projection may be used by established companies in their long-range planning process.
The cash flow statement tells you where all the money will come from and where it goes during a specific period such as one month or one year. You’ll use this type when preparing budgets on an ongoing basis (rather than just once).
Do You Have A Contingency Plan?
A contingency plan is a backup plan for when things don’t go as expected. You can think of it as an “If/Then” scenario, where you have a certain goal in mind and then lay out the steps you’ll take to achieve that goal if everything goes smoothly, or what happens if something goes wrong.
Before we dive into how to create your contingency plan, let’s look at some reasons why it’s important:
The fact that there are risks involved with starting your business means that even if everything goes exactly according to plan, there will still be challenges and obstacles along the way. Knowing how you’ll handle those challenges will help keep your mind at ease so that you can focus on making progress toward reaching other milestones on your roadmap.
A contingency plan gives us hope by providing us with options in case our original plans aren’t working out as well as we’d hoped they would (or worse yet and this happens more than most people think if things don’t work out at all).
Having confidence in yourself and knowing what options are available when things get hard helps give meaning to those difficult times because now we’re not just sitting around waiting for things to get better; instead, we’re actively taking steps toward getting back on track again!
Investors receive numerous business plans, so how can you make yours stand out? Check out our in-depth guide on how to write a business plan that investors actually read for practical tips on creating a compelling plan that captures investors’ attention.
What Makes You Unique And Competitive? Why Do You Exist?
You are a unique company, with a unique mission. What makes you special? How will you distinguish yourself from competitors? Why does your business exist at all?
To answer this question, take some time to reflect on what makes your business different and better than competitors in the same space.
As you write down answers to these questions, think about them from four different perspectives:
Customers: Why would customers choose to buy from you over other companies offering similar products or services? What do they value in your brand that others don’t provide?
Investors: Why would investors invest in your company instead of someone else’s? What is it about the potential success of your business that sets it apart from others and makes it attractive for investment dollars?
Employees: Why would employees join your team as opposed to working elsewhere (or starting their own companies)? What factors make working at yours more appealing than competing firms’ opportunities do not offer them similar perks or benefits which will help them succeed professionally while using their abilities optimally
Crafting a successful business plan can be challenging, but learning from others’ experiences can make it easier. Explore our article on 16 business plan tips that anyone can learn from to gain insights and improve your business planning skills.
Conclusion
With these 12 questions, you’re well on your way to creating a great business plan. It will help you get organized, clarify your thoughts and ideas, and make sure that you have all the information necessary for success.
Remember that this is just the beginning of your journey there are plenty more questions that could be asked throughout your planning process (and even after!). But these 12 cover some of the most important bases so they should help you get started.
Further Reading
Twaino – Business Plan Questions: Explore additional insights and tips on addressing crucial business plan questions for startups.
Nairametrics – 12 Questions Your Business Plan Must Address: Learn about the essential questions your business plan should cover to improve your chances of securing financing.
Harvard Business Review – The Questions Every Entrepreneur Must Answer: Delve into the questions that every entrepreneur should address to lay a solid foundation for their business.
FAQs
What are the key components of a business plan?
A standard business plan typically includes an executive summary, company description, market analysis, product/service details, marketing and sales strategy, organizational structure, and financial projections.
How can a business plan help secure funding?
A well-prepared business plan demonstrates the viability and potential profitability of your venture, making it more appealing to investors and lenders, increasing your chances of obtaining funding.
How do I determine my target market?
Conduct thorough market research to identify and understand your potential customers, their needs, preferences, and purchasing behavior, enabling you to define your target market accurately.
What financial documents should I include in my business plan?
Your business plan should contain financial statements like income statements, balance sheets, and cash flow projections to provide a clear picture of your business’s financial health and performance.
How can I differentiate my business from competitors?
Highlight your unique selling proposition (USP) or competitive advantage, such as superior product quality, innovative features, excellent customer service, or a more competitive pricing strategy.
Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.
