Tim Bainton and Alex Planes
Are you ready to start a fitness business, or do you already have one?
Have you written a business plan yet?
“Make lots of money” doesn’t count.
We told you to start figuring out your niche — an important component of effective business planning — before you even start your business. Now you should dive deeper. What makes your niche viable? How big is your niche’s addressable market, or how big could it be if the market isn’t yet well-defined? How will you differentiate yourself, price yourself, promote yourself, and pay yourself?
A business plan isn’t meant to be a definite roadmap for business success. In fact, you might look back in a year and laugh at how silly and misinformed your first business plan really was. We have. But we can also appreciate the value of a detailed business plan as a predictive document. Predictions can be (and often are) wrong, but they still provide targets to aim for and help create frameworks for strategic growth. Writing a detailed business plan should also compel you to develop a better and more detailed understanding of your offer, your market, and your ideal customer.
It pays to plan
Research from Harvard Business Review and Palo Alto Software has shown that it pays to plan.
HBR found that entrepreneurs who write out formal business plans were 16 percent more likely to build viable businesses, and that those who sought outside funding to fuel growth were 19 percent more likely to have written a business plan.
Palo Alto, which makes the popular Business Plan Pro and LivePlan software — we’ve used BPP for multiple businesses and have found it effective for guiding the development of our plans — found an even larger gap between planners and non-planners. Palo Alto’s survey found that 64 percent of entrepreneurs with business plans enjoyed business growth, compared to just 43 percent of non-planners. Plan writers were also twice as likely to secure outside loans or investment capital as non-planners.
It seems clear that the act of writing a business plan makes it more likely you’ll succeed in your entrepreneurial journey. A successful business can thrive for years, decades, or even centuries. If you’re willing to commit a major chunk of your life to your business, shouldn’t you be willing to commit a weekend or two to writing down your plans and gathering your data?
There are several great software products that can help you structure and complete a world-class business plan, even if you’ve never gone to business school or written a plan before. But there are also tons of free or inexpensive business plan templates available online, which you can complete in Microsoft Word, Google Docs, Adobe Acrobat, or right in your browser. Don’t think too much about what tool or template to use. Pick one that looks like it’ll be helpful and easy to use and get going, and try not to spend too much on it.
There are a number of elements or sections to a comprehensive business plan. If you’re seeking outside funding, many of these elements will be financial in nature. Most of your plan’s financial numbers will be projections, unless you’re seeking funding for an established company and have detailed financial history to present. Many entrepreneurs skip financial projections and focus on producing detailed analyses of their product and market. Some choose to forego the wordy detail of a standard business plan and put together a short-and-sweet pitch deck instead.
Here are some of the essential elements of a comprehensive business plan:
- Executive summary
- Business objectives and mission (statement)
- Business summary (leadership, ownership, history, etc.)
- Products and/or services offered
- Product strategy (development, procurement, manufacturing, pricing, etc.)
- Addressable market
- Marketing and sales strategies
- Competitive advantages
- Projected (or past) milestones
- Financial plans and/or projections
Don’t feel compelled to fill out every single section you see in your software or template. You can always set something aside and come back to it after you’ve learned more, or bypass something completely if you don’t feel that it’s relevant to your business situation. You can also find someone to help you write, expand, or clarify your business plan on one of many freelancer marketplaces online, such as Fiverr or Upwork.
Start planning now! Don’t obsess over it, but don’t neglect it. The worst outcome is that you’ll gain a better understanding of your goals and how to reach them. That seems worth the effort of a few hours, particularly if you hope to thrive in business for many years.