Steps to Developing a Business plan

We have plenty of in-depth articles here on Bplans about business planning, for example: why you should plan, what kind of plan you need, and how to prepare a formal business plan document. But, what we’ve been missing, until now, is a simple step-by-step summary of the business planning process to get you going and give you an overview of the core steps you need to take to ensure you are taking advantage of everything a good planning process has to offer.

Business planning is simple and so worthwhile that a straight-forward guide was in order to help you through the basics. So, instead of a several-thousand word article on the topic, here’s a simple checklist you can follow to kick start your planning process:

1. Start with a pitch to outline your strategy and the basic concept for your business. Do this quickly and keep it simple. This isn’t your investor pitch (yet), but more like a simple one-page business plan. Really it’s just a sketch of your business concept. Your pitch should include your key value proposition, an overview of the problem you are solving, your solution to the problem, a description of your ideal customers, and an overview of the competitive landscape. For more details, check out our guide to creating the perfect pitch.

2. Validate the assumptions in your pitch. Does the problem you think you are solving actually exist? Does your target market like your proposed solution? Do you have enough potential customers who are willing to pay for your solution to make a real business? As you test and validate your assumptions, update the pitch you built in step 1.

3. Build a simple sales forecast and expense budget. At this stage, budgeting and forecasting is more of a “gut check” rather than a detailed, precise forecast. You really just need to figure out if you can build a profitable business from your idea and, potentially, figure out roughtly how much money you need to raise. To figure this out, you’ll want to build a cash flow forecast as well.