Step 2—Prepare a winning business plan
Your business plan is a crucial document for your new company. It says who you are, describes your business and shows how you will become profitable.
A properly formulated plan can help you gain the confidence of lenders, investors and other stakeholders. As such, it should show you’re committed to your business and have the skills, knowledge and confidence to achieve your goals.
The elements of a good business plan
Your business plan should include the following elements:
- Your company name and a description of your business
- A market and competitor analysis
- A discussion of what makes you different from the competition
- A marketing plan
- Your organizational and legal structure
- An HR plan
- An analysis of your financial and equipment needs
- Your key financial data
BDC's article "How to write an effective business plan" provides a brief outline of the key elements of a plan. You can also read our article on common mistakes to avoid when building your business plan.
You can use BDC’s free business plan template to guide you as you write your plan. The Canada Business Network also offers a guide to writing your business plan as well as good examples of industry specific business plans.
Obtain supporting information
You’ve probably already conducted informal market research on your own. But you’ll need more than anecdotes to convince investors and lenders to support your business. Your business plan has to be backed by facts and research to hold up to scrutiny.
You should gather this information using both secondary and primary sources.
Secondary sources will consist of statistics and trends about your market and your customers. The websites of Statistics Canada and Innovation, Science and Economic Development Canada are good places to obtain this data.
Industry publications, associations, think tanks and university research are also good sources of information. Also consider contacting a Canada Business Network centre to see if they could help you find what you’re looking for.
Primary sources include surveys, personal interviews and focus groups. These can provide you with insights into the attitudes and behaviours of your target customers. Make sure to survey more than your personal network of friends and family when conducting your research.
Like the rest of your business plan, your market research should be periodically reviewed and revisited anytime you need to make major business decisions.
Set measurable objectives
Setting goals for your business will help you to get your team focused and taking action to achieve your vision. Your goals can deal with every aspect of your business plan. Here are some examples:
- Finance—Raise a specific amount of capital, hit cash flow targets, become profitable.
- Operations—Launch new products, offer new services, improve efficiency by x amount.
- Human resources—Find employees with specific skills, create an onboarding protocol, introduce an employee evaluation system.
- Sales and Marketing—Create a unique brand, develop your marketing plan, set sales targets.
You should have measurable targets so you can monitor your progress towards them through the year.
Do you need a marketing plan?
If your business will rely heavily on marketing, you may want to create a separate marketing plan. For a general introduction to marketing concepts, consult BDC’s article “A 5-step, no-nonsense marketing plan.”
Your marketing plan can include the following elements:
- A SWOT analysis that identifies your firm’s strength’s weaknesses, opportunities and threats.
- A profile of your target market.
- Clear objectives in terms of market share and segments, number of customers and customer retention, and the size and volume of purchases that are made.
- A description of your marketing strategy.
Prepare an elevator pitch
Apart from your business plan, you should also prepare an elevator pitch. This is a short and compelling description of your business that can be delivered in 60 to 90 seconds.
The idea is that not everyone will have the time to or be interested in reading your business plan. To elicit their interest, you need to be able to pitch potential investors, lenders, partners and customers on your business in the time it takes for an elevator to go up a building.
To be successful, your pitch needs to be clear and concise, stand out from the crowd and be tailored to your audience. You’ll also need to know your business inside out, as listeners may come back to you with difficult questions.