So you’ve got a business idea that could be the answer the world has been waiting for. Finally, you can pursue your passion and fulfil your dream of being a business owner.
First, congratulations! Second, you’ve got a lot of work ahead of you. And third, before you even get started on that work, you need to create a business plan.
A business plan essentially lays out what you’re selling, who you’re selling to, how you’ll sell it, who will run the show and how the money will flow.
Not every situation requires a full, formal business plan. If it’s just for yourself or your internal team, a more streamlined version will do. But if you’re presenting it to investors or applying for a bank loan, you’ll need to provide all the details. Most banks usually have guidelines on what they expect in a business plan, so it’s worth checking before you start.
For now, we’re here to guide you through the good, the bad and the ugly of creating a business plan. To build one effectively, you’ll need to gather a lot of information. The more detailed and thorough, the stronger your plan will be.
The Basics
Introduce your business, including the name, location and legal structure (sole proprietorship, partnership or corporation). List the founders and their backgrounds, highlighting any relevant experience that could support the business. Include your mission and vision statement (see How to Write a Mission Statement below) to explain why your business exists and what it aims to achieve. Items to note:
- Business name, location and legal structure
- Founder(s) information
- Mission and vision statement
Product or Service
When describing your business, start by clearly outlining your product or service and what it offers. Highlight its key features and benefits, explaining why customers would want or need it. Include your pricing model, whether it is a one-time fee, subscription, etc. Discuss the potential for future growth, such as additional products or services or plans for expansion. Include any intellectual property you may already have, including trademarks, patents or copyrights. Items to note:
- Product or service description
- Features and benefits
- Pricing model
- Potential future plans
- Intellectual property
Market Research
Define your target audience, including key demographics such as age, income range, interests, location and the pain points your product or service will address. Provide an overview of what’s happening in your industry. Is it growing or shrinking? Are there any opportunities that you could take advantage of? Are there any potential threats such as competition or regulations? Assess the size of your market to learn the potential reach and scalability of your product or service. By knowing the size and scope of your customer base, you’ll understand how many people you could realistically sell to, and whether your business has room to grow. Identify your main competitors, noting who they are and how your offering differs from theirs.
This research will show that you understand the bigger picture of your industry and where your business fits within it. Items to note:
- Target audience
- Industry trends
- Market size
- Competitors
Marketing and Sales Strategy
Explain how you plan to attract customers, whether through advertising, social media, SEO, word-of-mouth, events or strategic partnerships. Outline your sales process, such as direct sales, online store or working with distributors. Be sure to identify your customer-acquisition costs, showing how much it costs to bring in each new customer. Describe your strategy for retaining customers, which could include loyalty programs, subscriptions or strong after-sales support to keep them coming back and bringing their friends. Items to note:
- Reaching your customer
- Sales process
- Customer-acquisition costs
- Customer-retention strategy
Operations and Management
Give insight into how your business will run on a daily basis, including workflow, suppliers, tools and technology. Outline your team structure by defining roles, responsibilities and areas of expertise. Present your staffing plan, noting the current team in place and any future hires you anticipate as the business grows. Highlight any partners and suppliers and how they support your operations. Items to note:
- Daily operations
- Team structure
- Staffing plan
- Partners and suppliers
Financial Information
If you’ve ever watched even one episode of CBC’s Dragon’s Den, you’ve witnessed investors tear an entrepreneur to shreds over unrealistic financial projections or overvaluations. Having clean and realistic financial information will only harden your credibility and better your chances of success.
Outline your startup costs, including expenses such as equipment, marketing, lease, salaries, licences and other essentials. Explain your revenue model and how your business will generate income. Provide financial projections, including an income statement (revenues, expenses and profits over time), balance sheet (assets, liabilities and equity), and cash-flow forecast for the next three to five years. Include a break-even analysis to show when the business is expected to start making a profit. If you request funding, specify the amount and describe how it will be used to support growth and operations. Items to note:
- Startup costs
- Revenue model
- Financial projections
- Break-even analysis
- Funding requirements (if requesting)
- Use of funds
Supporting Materials (Appendix)
Include any documentation that supports and strengthens your business plan, such as team-member resumés, market research or surveys, product photos or mockups, letters of intent from potential customers or partners and any necessary licences or legal documents to demonstrate your business is prepared and credible. Items to note:
- Resumés of team members
- Market research
- Product photos/mockups
- Letters of intent
- Licences, permits or legal documents
Writing a business plan requires you to be thoughtful and realistic about the direction of your business, but think of it as a dynamic, living road map that can be updated as you gain new insights, modify your strategies or change the direction. Take a deep breath and start.
Having clean and realistic financial information will only harden your credibility and better your chances of success.
How to Write a Mission Statement
A mission statement clearly articulates why your business exists, what it does and what impact it aims to have. It is usually between one and three sentences and is clear, concise and memorable.
Identify Your Purpose
Ask yourself: Why does this organization exist? What problem are we trying to solve? Who do we serve?
Example: We provide a comfortable pet-friendly place for people in James Bay to enjoy excellent coffee.
Define What You Do
Describe your primary activities or services. Keep it clear and specific.
Example: We serve high-quality coffee, espresso and pastries made daily in house.
Highlight Your Impact
Explain the benefit or change you aim to create.
Example: We provide a neighbourhood meeting place for people and their fur babies to relax, connect and enjoy great coffee.
Optional: Infuse Your Values
Include your core principles or guiding beliefs if relevant.
Example: We pride ourselves on using only ethically sourced and sustainably grown products.
Putting It All Together
Template: [Organization Name] exists to [purpose] by [what you do], creating [impact] while guided by [values].”
Example: Coffee Love provides the community with a comfortable and welcoming neighbourhood hub to gather and enjoy exceptional coffee guided by our mission to serve ethically sourced and great-tasting coffee and pastries.
