- Most of us, wouldn't
consider setting out on a trip without a map. Sure, if you start driving without a map, you might have fun, have
an interesting experience, but you're probably not
going to be able to get to a specific destination. So, if that's important to you, then you start with pulling out your phone and pulling up Google maps. But it is amazing how many people think that they can get away with exactly that, when it comes to starting a business. They have a general idea of
what business they want to start or what product they want to sell, but they don't take the
time to come up with a plan for how they're going to
build a particular business. In fact, a lot of people
don't even know exactly what they're trying to build. They don't have an end destination in mind and while building a
business without a plan, can still potentially be a fun
and interesting experience. It can also potentially
be a big waste of time. So, in this video, I'm
going to show you exactly, how to quickly and easily
write a business plan to ensure that you have a solid
plan for how you're going to build your business and where you're trying
to take the company, so that you can avoid
wasting your time and energy and maybe a whole lot
of money along the way. You can download a free copy
of the template that I'm using in this video, in the
description box below. The first part of your
business plan is the overview. So, on this page of a plan, you will put details about your company, such as your business name, where you do business, the main product or service that your business offers, as well as your mission statement. The last thing you'll
likely want to include on the overview page is a diagram of your chart of accountability. This basically just
describes who answers to who in your company. When you're first starting
out it will be your name in every blank on your
chart of accountability, but it is still a good to
clarify the different functions or roles that you're
performing in the business. So that later, when you
start to grow your team, you're able to easily plug
people into these different spots in the company. Page two of the business plan is about your businesses message. This message is going
to serve the foundation for all of the marketing
that your company does. And here's the truth. The more clear you are about exactly what your business's message is, the easier it will be
to market your business and to make sales. Basically, your message
is describing the value that your company offers to people and why it's worth their money. So, the first thing that
you're going to cover in the message section is
what is the big problem that your company is solving. And if you sell multiple products, what you wanna think about
here is the main product that you sell, that's a
question I get all the time. So, what is the main problem that this product solves
for your customers? Then you're gonna move on to what result does your company
create for the customers? So, you're selling some sort of product, when someone buys it, what result can they
expect to get from it? Then the next section asks, how does your company create that result? So, here you just need to
describe in really simple terms, how that result is created? How does the product actually work? If you can describe this in
really clear and simple way to your customers or your
prospective customers, then they will be much
more likely to trust that you can in fact,
provide that result to them. And if that result is something that they're
interested in getting, then they will happily purchase
your product to get it. Next comes, who does your company serve? So, who is your target customer? Here, you want to focus
more on psychographics than on demographics. And what that means is you
want to describe the desires of your target customer and the
problems that they're facing and how it's impacting them. Not so much things like their age or their gender or ethnicity
or anything like that. Now, if there are any of those factors that are important to your customer, then you will want to
include those details. For example, if you offered counseling to women going through menopause, then clearly your target
customers are only women. Or if you sell hair care products for people with a
specific texture of hair, then your target
demographic would be people of the ethnicity that have
that specific texture of hair. So, you only want to include
those demographic details if it's really relevant to the
product that you're selling. The next item in the message section of your business plan says,
"Why do you do what you do?" So here, you're going to
tell a brief little bit of your backstory as it
relates to what you do. And this just serves to give
validity to your message and to help your customers
trust you even more, because it helps them to understand that you really understand
what they're going through and that makes them further believe that you will be able to help
them solve their problem. Then you'll answer the question, why should your customers choose
you over your competition? Now, for some people, this'll
be a tough question to answer and you might feel like
your business does exactly what everyone else does as well, everyone else in your
industry or in your niche. So, if that is the case, that's a good wake up call to realize that you need
to figure out something that really differentiates your company and your product so that
customers have a reason to choose you. And the final part of the message section of the business plan is about
your proprietary system. So, what is the special method that you use to get the desired result that nobody else in
your industry is using? There's going to be some overlap, between your proprietary system and why your customers should choose you, not the competition? And also some overlap, between your proprietary system and how you produce the result. In fact, those two things
might look exactly the same, but you will find that it is much easier
to market your product, if you can use terminology
that sets your product apart. So, you're describing
how you're doing things in a way that no one else is describing it and this will make your customers see, why your approach is different. The third section of your
business plan is marketing. On this page at the business plan, you'll go over your target
market psychographics and demographics in even more detail. Then you're going to
give an estimated size of this target market. Now, this is a very standard
part of a business plan. And it's important, especially if you're going to
be reaching out to investors and you need to persuade them. There is a sufficient number of people who will be interested
in buying your product. But honestly, even if
you are the only investor in your company, you
should still make sure that there are plenty of people out there, who actually want this product that you are going to be offering. So, in order to figure
out this target market, there's two different ways you can do it. You can either just
take your psychographics and your demographics and then try to do your
research to figure out, how many people fit into those categories? Or you can look for groups of people, who are potentially
interested in your product. This could be things like Facebook groups or the number of people who subscribe to certain YouTube channels or who follow certain people
or brands on Instagram. And then you can then add up the numbers of each of those different groups to come up with this
estimated target market size. Then if you do it that way, just know you will be
underestimating a bit, but that can actually be a good thing, because it means there will
be even more people out there, than those people who you
find in your initial research. Figuring out the estimated
size of your target market, will also help you
answer the next question on your marketing section
of your business plan, which is where can your
target market be found. So, wherever you found people
to add up those numbers and estimate the size, you're just going to hear record, where you can find these people and this will be so key later on, when you are trying to go out there and reach these people
and advertise to them, because you've already figured
out where you can find them, it will just be a really
easy part of the process. And then we come to the strategy section of your marketing plan. So, here we have three
different parts of the process. First of all, is your visibility strategy. So, your visibility strategy, is how you're going to
get visibility or exposure for your business is
basically your strategy for how you're going to tell
people about your business. This could be YouTube,
it could be Instagram or any other type of social media. It could be paid advertising. It could be doing collaborations
with other brands. There are so many different options here, but you need to have
a visibility strategy, because nobody can buy your product if they don't know your brand exists. The second part of the
marketing strategy component is your lead generation strategy. So, once someone finds out about you with one of those visibility strategies, how are you going to
turn them into a lead? How are you going to get
their contact information? So, you can follow up with
them and close the sale. Very common strategy here would be to use a free opt-in offer. So, basically this just means that you have some free resource. It could be like a sample of your product or it could be a free checklist or a free video training,
whatever you want, but this free thing is
offered on your website. And then when someone visits your website they can enter their
email, get that free thing. Some brands do this by
providing free samples or example products. Other brands do it by
offering a coupon code if you subscribe to their newsletter. The final piece of the marketing strategy will
be your conversion strategy. So, how are you actually
going to close the sale? Are you going to occasionally
put your products on sale and then email people to let them know? Or will you use webinars or
will you use email marketing? How are you going to
actually close the sale? In this section of the marketing plan, you're also going to
want to make any notes, about how people will actually
complete the transaction. So, are they going to walk
up to the cash register and check out manually? Or are they going to visit a
checkout page on your website? We need to know exactly, how this transaction will be processed. Okay so, now we come to the fourth part of the business plan and this is where you
describe the products that your business sells. So, maybe your business
only sells one product or maybe you sell several, but either way you are going to want to outline the basic details
of each of these products. So, specifically you'll want
to have a name for the product and then describe the result
that the product creates. So, this is kind of the explicit
thing that someone buys it and they immediately get a result from it. So for example, someone buys a computer and then they can access the internet and do word processing. But then the next part of it
is the impact that that has. So, how does it affect my life? Well, now I could use this
machine to start a business or to write a book or to
organize my life better. And so, the reason that's important is, because depending on what the impact is, you will market your
product very differently. So, if I wanted to sell this
computer to entrepreneurs, then I would talk about the impact that it can have on a business. So, I could tell people this machine can run your
entire business for you. It provides a way that you
can connect with other people. It provides a way that
you can run your website and that can persuade people that this is the right machine for them, because it will really serve
the purpose they have for it. So, you'll want to go through, describing those different
aspects of your product for each different product you sell. Again, its name and then the direct result that the product creates. And finally, the impact
that that will have on the customer's life. The fifth part of your business plan is called production and delivery. And so, this describes
how your product is made and delivered to your customers. So, depending on what you sell, this could look very different from one business to the next. If you're creating online courses, then your production process might look, like you planning the courses
and filming the lessons and editing the videos and uploading them to a course platform. On the other hand, if you were going to sell water bottles, then you might need to
first design your product and then have a prototype created and then work with a manufacturer to actually be producing the product. And so, your production system is mostly going to be outsourced. It is going to be done by
a separate manufacturer and then maybe just
shipped to your warehouse or shipped to Amazon's
warehouse, something like that. And then the second part of
this is the delivery process. So, how are you actually
going to get your product, into your customer's hands once it exists? Again, depends a lot, depending on what you're selling. So, if you have a digital course, then this might mean that you need to use some email marketing software to email them their access
details, their login and their password, so that they can then visit
a course platform website to access the materials. On the other hand, if you're
selling something on Amazon, then Amazon FBA might
be your delivery service and you don't have to do that yourself. It's outsourced. So, this process looks really different from one business to the next, but whatever it looks like in your company for your specific products, you need to describe how you're
going to make the product and how you're going to get
it into your customer's hands. The sixth and final part of the process is where you outline your goals. This is so important, because this is where you decide, exactly where you want
your company to head. Now, honestly, all the rest of the business
plan really helped you with that also, because
probably most of the things you were describing, aren't
things you're doing yet, especially if you're in
the very beginning phases of starting your business. So for example, you
might've been describing a product that doesn't exist yet or a target market that
you're not yet selling to. And so all of those things are helping to solidify your vision for the company, but here in the last part
of the business plan, you're going to really
clarify your specific goals for certain benchmarks. You want to take the
company to in the first year and also in the first five years. So, for each of these two time periods, I want you to name a certain amount of revenue that you want to get to. Now, I know that this can
feel really arbitrary. And so, for that first year, you'll want to think about how many sales, you are going to create per month and really just break it down
and think about it smaller. Honestly, when you're
first starting a company, your first goal should just be to make your first thousand dollars, to really validate your business idea. We'll be talking about that more next week in next week's episode of the "Small Business 101 Series." So, make sure you're
subscribed if you want to get access to that lesson, but when it comes to your one-year goals, it is really, it's going to be a lot of guesswork. If you haven't done any of the work of building
your business at all yet. And so, you just need to accept that and set a kind of arbitrary goal. And to know that one year from now, you'll have a lot more information that will allow you to set
better goals for the future. So, to just give yourself some sort of benchmark revenue goal to shoot for. Then the next one will
be your profit goal. So, different businesses have
very different profit margins. Some businesses have a 2% profit. Other businesses have a 50% profit margin. Now, if you are selling some
sort of physical product, I would recommend you shoot
for a 20% profit margin. It'll likely end up being
a bit lower for that, but it's still a good goal to shoot for. On the other end, if
you're selling a service or if you're selling a digital product, I would shoot for a 50% profit margin. So, whatever your revenue goal was, just divide that in half. And that is your profit goal. The next line for your goal is the sales. And so, this is a number of
sales that you need to make in order to hit that revenue goal. And then the final two sections of your goals are the
impact and the development. So, impact is about what sort of impact, do you want to have on the
world by that point in time? So, by the end of your
first year in business, what impact do you want it
to have had on the world? And then development has to do with how the business
has grown and developed. So, who do you want to be on your team by the end of the first year? And then by the end of the fifth year, and what do you want your
company's organization to look like? Or how many hours do
you want to be working? All of those aspects have to do with your businesses development. You also could talk about
systems and structure, things like where you are doing business. So, maybe moving to a bigger store or redesigning your
website, things like that or working with a professional
branding designer. Okay, so that brings us to the end. That is all there is to it. It is kind of a lot, but at the same time it's not that much considering that you can write this
entire business plan in just an hour or two at most. And it is going to be your guiding light for the next year or two. Now, do keep in mind
that you should be open to rewriting this plan in the future. It's not gonna serve you
forever as your company grows. As you start making sales,
you will learn a lot. And as you get more information, you'll be able to make better plans and set better more reality based goals, instead of goals that
are quite so arbitrary. As I mentioned earlier on, the template that I was
using throughout the video, can be downloaded for free. There's a link to do so down
in the description below. Also, I want to let you
know that this video is episode three of our
"Small Business 101 Series" that we are currently
running on the channel. So, if you are currently in the process of
building your own business and you would like some
guidance along the way, then make sure you are
subscribed to the channel and that you have notifications turned on, so that you find out when
each new episode is released. Next week's episode, will be all about validating
your business idea. This is so important and
a part of the process that so many new entrepreneurs
that completely skip, they get a business idea
that they're excited about and they just start charging forward, investing tons of time and energy and often money as well into this completely unproven business idea. But there is a better
way to go about this. You can take just a couple months to validate your business idea, do some market research, release a beta version of the product, generate your first sales and earn your first thousand dollars. Truly the most important
money you will ever make, because it is what both
proves your business idea and sets you up for long-term success. So, if you haven't get
validated your business idea, then join me next week to learn exactly, how you can do that for yourself. (upbeat music)
