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What Are the Different Steps in Business Planning?

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  • Written By: Dan Cavallari
  • Edited By: Bronwyn Harris
  • Last Modified Date: 21 September 2016
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The first steps in business planning involve determining what kind of business will be opened and what the competition for that business will be. A detailed description of the products and services to be offered should be the first part of the document, and an analysis of how the business will be better than the competition should be included. Key details such as where the business will be located and what kind of customers it will serve should also be some of the initial steps in business planning. The more a potential business owner knows about his or her business and its competition, the more prepared he or she will be.

Other initial steps in business planning include writing a vision statement or statement of goals. This statement can be as vague or as specific as the business owner wants it to be, but it helps to outline initial goals for the business and a general business model that will drive the owner toward success. Again, the clearer the owner can be on paper, the clearer he or she will be in the business proceedings and the more confidence a lender will have in lending money for startup capital.

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A business owner will need money to get started, and in order to secure funding, the owner will need to take steps in business planning that clearly outline how much money is needed and for what purposes. The budget should include overhead costs such as rent, utilities, and equipment purchases, as well as advertising costs, incidental costs, employee payroll, taxes and licenses, and other costs that are likely to come up within the first few months of operation. The owner will need to draw projections and financial goals that dictate how much will be spent and how much will be made in the first few months.

Once the basics are out of the way, the next steps in business planning should be fairly in-depth. The business owner will need to analyze the strengths and weaknesses of the competition, figure out how to make the new business better than others, determine a target audience for the new products and services and plan how to reach that audience, draw up an advertising strategy, and determine a budget for all these steps. Advertising should include strategies for reaching potential customers and drawing established customers away from existing businesses. Marketing professionals may be hired for this part of the process, but this could raise the advertising costs.

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