Every year, thousands of small businesses open their doors, but about 20 percent of them end up closing for good in their first year. One of the main reasons those businesses fail is due to a lack of a clear business plan.

Writing a business plan is the best way to help you set your business up for success. Think of it as a roadmap for your first few years of growth. It outlines the steps you’ll need to take to grow your business, explains your goals, and makes a good case for investors and lenders should you need their help.

However, figuring out how to write a business plan when you’re first getting started can be overwhelming. Here’s what you need to do to create a plan that will actually be helpful.

Figure Out What You’re Offering

When you’re writing up a business plan, you need to think about what it is that your business will offer to your customers. What types of services are you going to provide? How will you expand and grow those services to satisfy increased demand?

Answer these questions in your business plan.

If you’re going to start with a single product line or set of services, explain those in detail. Don’t hesitate to discuss how your products and services will help your customers so your business can be sustainable.

Outline How You’ll Beat the Competition

Think of your business plan as an outline of how your company will operate both in the immediate future and as you grow. This means you’ll need to be able to explain how you’ll edge out the competition and keep your brand relevant even as other companies enter the market.

Explain how you’ll deal with challenges and what you’ll do to make sure your business provides better quality services every time.

It’s also a good idea to use this section to explain who your competition is. Look at other businesses in the industry and give a snapshot of their performance and their strategies for success.

Establish an Organizational Strategy

Before you can start operating your business, you need to register it with your local government. How you register your company depends on the type of business you run. For example, some people prefer to set up limited liability corporations (LLCs) while others prefer the tax breaks and benefits offered by an S or C corporation.

Explain how you organized your business and who is in charge of which part of your business. This includes yourself, your business partners, any existing investors, and your upper management team.

Use this section of your business plan to explain what each person brings to the table. Outline their strengths and experience as well as the types of responsibilities they’ll have in your company.

Create a Marketing Plan

When writing a business plan, you need to think about your marketing strategy. Explain the steps you’ll take and methods you’ll use to attract and keep customers over the years.

You’re free to keep this section brief. After all, you’ll need to reevaluate your marketing strategy several times during your first year of business.

Just make sure you’re able to explain the basics. Talk about how you’ll attract the types of clients you want and what your company will do to keep them coming back.

Give a Clear Picture of Your Business’s Finances

The most important thing to keep in mind when you draw a business plan is your investors’ and lenders’ motivations. It all comes down to the amount of money you can bring to the table.

As part of your business plan, explain your company’s current financial situation. Be honest and let them know about your regular costs and your profits. It’s also worth including your sales projections for the next year if possible.

The more clearly you can explain your financial situation, the more confident those reading your business plan will be in supporting your company.

Let Your Readers Know What You Need

Believe it or not, it’s okay to let your prospective lenders and investors know what you need to reach your goals. After all, this is why you’re approaching them in the first place.

Explain how much money you need, what type of financing you’re interested in, and the plans you have for that money. Be concise but detailed in the explanation so investors can see that you’re serious about the opportunity.

Summarize Your Business

One of the key components of a great business plan is the executive summary. This is the first thing that lenders, investors, and future business partners look at when you present your plan. Use the summary as an opportunity to briefly explain everything that’s in your plan.

You should be able to outline your company’s goals, your values, your edge over the competition, and what you need to get your business off the ground.

Keep it as short as possible. You’ll expand on each of those points in detail when you write up the rest of the plan. Typically, most business owners find it best to keep the summary to a single page.

This makes it easier for investors to see what your business is like at a glance and can mean the difference between getting approved for a loan and facing rejection.

Make It Accessible

It’s rare that you’ll meet with the people reading your business plan in person. Instead, most business owners prefer to send copies of their business plan through email.

Before you send your first copy, make sure the file is accessible. Instead of relying on PDF files alone, convert the PDF to Word and send both files to each recipient. This way, you’ll know that people will be able to access it quickly.

Now You Know How to Write a Business Plan

Creating a business is a wonderful way to make a difference in your community. However, before you can take things to the next level, you need to figure out how to write a business plan that will help you reach your goals.

Keep this guide in mind and you’ll be able to write up a business plan that will help you stay on track.

Looking for more helpful tips to take the stress out of growing your business? Check out our latest posts.