Lesson 4: What knowledge is required when creating a business plan
Creating a business plan requires a broad range of knowledge across different areas of business. Here are some key areas of knowledge that are required when creating a business plan:
Having a deep understanding of the industry or market one is entering, including market size, trends, competition, and potential risks and challenges.
Having a good understanding of marketing principles and techniques, including how to segment a target market, identify the unique value proposition, and develop effective marketing strategies.
Having a solid understanding of basic financial concepts, such as cash flow, profit and loss, balance sheets, and financial ratios. Being able to create financial projections and develop a detailed budget for the business.
It’s essential to have an understanding of the day-to-day operations of a business, including how you to produce or deliver a product or service, and what resources will be needed.
Having a good understanding of management principles, including how to hire and manage employees, set goals and objectives, and develop policies and procedures.
Having a basic understanding of legal and regulatory issues that may impact a business, such as zoning laws, permits, licenses, and intellectual property rights.
Finally, creating a business plan requires an entrepreneurial mindset, which includes the ability to identify opportunities, take risks, and innovate. One should be willing to think creatively and be open to new ideas and approaches.
Business Plan Template and Instructions
[Craft a brief “elevator pitch” vision or mission statement about your business that answers the following five questions]
- What does [your business] do? [Are you selling products, services, information or a combination?]
- Where does this happen? [Will you conduct business online, in-store, via mobile means or in a specific location or environment?]
- Who does [your business] benefit? [Who is your target market and ideal customer for your concept?]
- Why would potential customers care? [What would make your ideal customers take notice of your business?]
- How does [your products and/or services] outshine the competition? [What your value proposition that would make customers choose you over a competitor?]
**If you get stuck, continue brainstorming ideas for other parts of your plan, then complete this section.**
[Detail your offer(s), which are the products and/or services you plan to sell. Include a value proposition for each, which is a statement of how your product or service solves a problem for target customers.]
[Describe your ideal customer and explore a potential broader audience for your products and/or services.]
**Using the lists below, select the revenue streams that your business will use to make money and the sales channels and marketing vehicles that will connect you to customers.**
Revenue Streams: **check how your business will earn income; edit as needed**
- Product sales: Online, mobile, wholesale and in-store sales.
- Affiliate income: Monetize blog and social media posts with affiliate links.
- Advertising income: Reserve website space for advertising.
- E-book sales: Publish e-books related to [your business niche].
- Video income: Monetize a YouTube channel related to [your business niche].
- Webinars and online classes: Monetize coaching-style webinars and online classes related to [your business niche].
- Members-only content: Monetize a members-only section of the website for specialty content related to [your business niche].
- Franchise: Monetize [your business] model concept and sell to franchise entrepreneurs.
Direct Sales Channels: **check how your business will transact sales; edit as needed**
- Mobile point-of-sale (POS): Mobile and remote sales that don’t happen in-store.
- Brick-and-mortar location: In-store sales in a standalone location.
- E-commerce platform: An online store on an e-commerce platform.
- Social media channels: Facebook, Instagram, Pinterest shoppable posts/pins.
- Sales representatives: For wholesale or other rep-driven sales.
Other Income Channels: **check how your business can make other income; edit as needed**
- Affiliate income: Blogging or web content with affiliate link commissions.
- Advertising income: Reserved advertising spaces on [your business] website.
- E-book sales: E-book sales via Amazon Kindle Direct Publisher.
- Video income: YouTube channel with ad monetization.
- ○Webinars and online classes: Online subscription classes and webinars.
- Members-only content: Password-protected content on the website or blog.
Marketing and Advertising: **check how your business will reach audiences; edit as needed**
Online Marketing Methods:
- Informative blog content
- Online landing page sales funnels
- Social media via Facebook, Instagram, LinkedIn, TikTok, Pinterest, Twitter, other
- Video content on YouTube, Facebook or other
- Free e-books for marketing and lead generation
- Paid online advertising via Google AdSense or other networks
- Email and/or SMS marketing
- Customer loyalty program
Traditional Advertising and Public Relations Outlets
- Radio
- Television
- Newspaper
- Magazine
- Direct mail
- Door-hanger flyer distribution
- Event and team sponsorships
**Detail the structure and operational overview for your business.**
- Business structure: [Sole Proprietorship, Limited-liability Company, Partnership, Corporation, etc.]
- Permits: [Required city, county and state permits to operate.]
- Education or certifications: [Required licenses, certifications or education to operate.]
- Roles and responsibilities: [Owner, partner and staff roles and tasks.]
- Standard operating procedures (SOPs): [Overview of day-to-day operational plans.]
- Supply chain: [Raw good or resale/wholesale product suppliers and ordering processes.]
Cost Forecast **enter estimated startup and ongoing costs; edit table as needed**
Gross Profit Projections
**Use product research to estimate retail prices for your goods and/or services, then subtract cost-of-goods (raw material, hourly rate or wholesale costs) to estimate gross profits. Edit table as needed**
Finally, creating a business plan requires an entrepreneurial mindset, which includes the ability to identify opportunities, take risks, and innovate. One should be willing to think creatively and be open to new ideas and approaches.
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