If you’re wondering how to write a business plan, you’ve likely been considering launching your own design firm for quite a while. When getting your new enterprise off the ground, crafting a business plan is one of the initial steps. Think of it as a road map for your firm’s success: A solid one is essentially method of formally structuring your ideas and laying a foundation for the direction you see your design firm taking in the future—both short-term and long-term. If you plan to seek funding for your company, you’ll need to draft a traditional business plan; however, if you’re self-funding, a simple outline will suffice.
Scroll on to find AD PRO’s comprehensive guide, with explainers for how to determine the format that’s best for your practice to the key sections to include in your business plan and more.
What type of business plan is right for you?
Typically, business plans fall into one of three categories:
1. A one-page business plan
This brief, simplified document summarizes your business goals and introduces your concept to potential investors, who may not have time to fully digest a lengthy document. Viewable at a glance, a one-page business plan works well for initial meetings, and it offers a substantial starting point for your company—though you may need a more detailed plan in the future.
2. A lean start-up plan
Slightly longer than the one-pager, a lean start-up plan includes a summary and a bulleted list containing your firm’s financial information, business strategies, metrics, and forecasts. This type of business plan usually functions as an internal tool; thus, it’s not necessary to include all the sections and dense information of a formal traditional business plan (see below). This simple-to-navigate, 5-to-10-page document should clearly delineate your business strategy, the tasks you need to complete to achieve goals along with their due dates, projected sales, spending, and cash flow. Updating this plan regularly (at least twice a year) is essential, as it will guide the growth of your company and help keep all internal team members informed. As such, your lean start-up plan should evolve organically in tandem with your business.
3. A traditional standard business plan (a.k.a. an external business plan)
You’ll need to create a more formal business plan to share company information with key players such as potential investors to fund your endeavor, lenders to support loan applications, or even future employees. Since you’ll be using this document to explain your strategies for your business with those who may finance or join your company, you’ll want to precisely outline your plan in detailed sections.
Where to begin?
Your business plan is a living document that will evolve with your business. It should plot out how your business will operate, state your goals, and precisely express your vision for your company. Check out these solid tips before you begin drafting your business plan—regardless of the type of document you choose to create.
1. Keep it simple
Do not further complicate the already stressful process of starting your own design firm by constructing a convoluted plan. Create a simple bulleted blueprint that cites goals and your strategies for achieving them; then, update it as your company warrants it. For a traditional business plan, keep it to less than 40 pages. If you’re having trouble distilling the essence of your company down to 30 or 35 pages, consider hiring an expert to help you write it. Sites like UpWork and WriterHire offer business plan writers for hire by the hour to help you draft your document. Or there are business plan writing consultancies such as LivePlan or Toptal. However, outsourcing business-plan writing can be costly. According to UpMetrics, for expert writers to create a basic business plan, it can cost between $500 and $2,500, a comprehensive business plan costs $2,500 to $10,000, and an industry-specific plan can run up to $20,000.
Even if you go with a traditional, external business plan, keep it concise. Get to your essential points as quickly and efficiently as possible—you don’t want to risk losing a potential investor out of boredom! And don’t spend too much time making your business plan pretty. As a designer, your instinct may be to focus on stunning graphics, and while they can indeed enhance the appearance of the document, the actual content is what’s most important. Use simple graphs, charts, and photos to break up the text and illustrate your message without obscuring it.
2. Know your audience
Tailor your business plan to suit your needs, and craft it so that the intended audience can clearly understand it. Use clear, concise, and straightforward language, and avoid any lingo only an A&D professional would understand—especially if you intend to use the plan as a pitch to investors or for a loan application.
3. Know your competition
Brush up on who your competition is, know what they are doing well (and poorly), and make it evident in your business plan how you will distinguish your brand from the rest. However, never ever speak disparagingly about other design firms. A mistake like that reflects negatively on you rather than any potential opponents. Instead, focus on what makes your company stand out against the rest. Perhaps your firm offers online design services, specializes in custom millwork, or provides clients with assistance from a personal account director. Highlight whatever sets you and your firm apart transparently in your business plan.
4. Keep it real
Keep your expectations in check and never inflate your financials. While it’s always helpful to think positively and believe that your business will succeed financially, do not overestimate your earning potential and revenue forecast. Overpromising and underdelivering is a recipe for disaster for your budding design firm. Instead, be honest about what services you will offer and how much you will bill for them. Evaluate what comparable companies charge for similar services before giving your quote. Make your projections realistic, particularly if you are seeking funding. Explain your business model, detail how you plan to earn money, and explicitly state the reasoning behind your figures. And always be 100% certain to base all your financial information in solid facts.
5. Work backward
Figure out what you want to accomplish and by what date, and then backtrack from there. Consider: Where would you like your company to be financially one year from now? What revenue goals would you like to achieve by that time? Then determine what you must do in 12 months, six months, and three months to arrive at your objective in a timely fashion. Work these milestones into your business plan. You’ll be pleased as you see results accumulate throughout the year—even more so when you realize your objective by your firm’s one-year anniversary.
6. Just get it started
Don’t let the task of drafting your business plan paralyze you. Start out simply by jotting down your business ideas. Glean inspiration from whatever it was that motivated you to embark on your own design firm to begin with. Don’t worry about “writing your business plan” right now if that feels too daunting. Make preliminary notes and worry about constructing your ideas into your formal business plan later.
Starting can be the hardest part. Perhaps it would help for you to begin with a simple one-page plan. Then, you can use that document as an outline for your formal business plan and go back and fill in more details later. Remember: No one knows your business better than you do. Let your passion for starting your new company be the impetus to start writing. And don’t be afraid to let your enthusiasm come through in the final document. Being honest about your motivation and your plans will better convey your vision and help your readers understand what your small business is all about.
What are the components of a business plan?
Now you understand what type of business plan will work for you and how to approach the task. But what are the essential components of a business plan? Entrepreneurs have varying ideas on what’s essential and what you can skip. But when starting your first-ever business, consider following the advice of the US Small Business Administration and make sure that your business plan contains these nine recommended sections.
1. Executive summary
As the single most important part of your business plan, the executive summary should briefly convey to the reader the essence of your company and pique their curiosity to want to know more. Brevity is key. This synopsis states what your business, product, or service actually is; it should name your company’s mission, cite your short- and long-term goals, and highlight your strategies for attaining these goals. Be bold and put in writing how and why you think your company will be successful. What sets your firm apart from the competition? Get this information out there immediately. Also, include basic facts about your employees, management team, location, and financial statistics.
