Effective Online Selling: Creating a Crafter’s Small Business Plan
This article is intended for: - Artisans ready to start a small business - Current small business owners who jumped right into online selling and have yet to create a business plan - Small business owners who need to further develop a business plan This article is about the steps involved in writing a business plan; why you need a business plan; where you can go for extra help on writing a business plan; the resources available to you when you are ready to write your business plan.
This article is available as a printable version HERE .
Starting a new craft business means making sure you do things legally. It also requires you to keep good records of your business. You can look at the business plan as a road map, a summary of your goals, an outline of your products and strategies, and a tool to attract investors. It will help you sort out your goals and measure your success. What success means to you may not mean success to someone else; with a business plan, you can define what success means to you. It will also help you organize your plans, your expenses, and legal issues.
Some things to consider before you start writing your plan:
- What are your skills? What will you be selling?
- How are your finances? What will it cost you to get started and how much money do you have to work with? Will you need to take out a loan?
- Who is your target market? No one is going to buy what you are selling if nobody is interested in what you are creating. Find out who would be interested in your products and do some research to make sure the market isn’t already saturated.
- What legal issues will be involved? What do you need to do in your city/county/state to be a legitimate, legal business?
- What do you need to keep track of as far as your taxes are concerned?
- Who will be reading your business plan, or is it just intended for yourself?
Your business plan does not need to be formal, depending on what you plan to do with it. The format you choose is up to you. Some may prefer a binder, others a PowerPoint, and for others a simple Word document will do. For some, a business plan is useful when applying for a loan or attracting investors; For others, financial help is not necessary and the business plan is meant for financial and marketing organization only.
After you have considered the above questions and you are ready to start writing your plan, there are four main sections for you to work on.
First is the introduction. Write about yourself, your craft, what you want your business to be, what makes your work unique and desirable, and how you will operate your business.
Next is your company plan. In this section you will define your goals, describe your products, outline your objectives, explain how your business operates, and cite your research, explaining why you think your products will sell.
The Marketing plan follows the company plan, and this is where your market research will come in handy. Who are your competitors? What makes you different from them? Who are you trying to sell to? Who is your target market? What will be your strategies for selling successfully? What will you do to stand out and be memorable to potential customers? Where can you effectively advertise and promote?
Finally, you should detail your Financial plan. How much money do you have to start with? Where is it coming from? Do you have plans for earning extra money? How much money will be necessary to start up your business? How much money do you need to earn to turn a profit this year? How much money do you aim to earn?
If your plan is less formal, you may stick to those four main sections, consolidate the information, and keep it simple. If you wish to have a more comprehensive, in-depth plan, you may expand the format. There are a few more components you may wish to have to complete your business plan. You may wish to include a cover page, a table of contents, a summary, an appendix, or a list of resources that were or will be helpful to you. A more comprehensive, in-depth business plan could take this format:
- Executive Summary
- Company Description
- Market Analysis
- Organization and Management
- Marketing and Sales Management
- Service or Product line
- Financials
- Funding Request
- Appendix
Go into depth regarding your bookkeeping and finances. Where will you open a separate bank account? Will you open a PayPal business account? How about a business credit card? What will you use to keep track of your expenses and earnings? Who will do your taxes, or will you do them yourself? What permits will you need? What will you need to collect sales tax in your state?
Consider your niche. Do you have one? Your niche might include current trends that your products fit into, certain ages or populations of people that are more likely to purchase your product, or perhaps you specialize in items that nobody else makes – that means you own your market! Figure out how your customers will find you and what they need most.
Outline a real budget. What will it cost to buy what you need – design space, materials, advertising, packaging, branding materials, etc. If you are already an established business, what was your budget last year? Do you need to re-evaluate it?
Finally, what are the risks involved? Will you need a loan? How soon do you plan to pay it? If you are successful, how will your competitors react to you? Consider any and all risks involved and outline how you will deal with them.
At the end, include an executive summary of your main objectives, legal issues, and include paperwork such as permits, contracts, experience, letters of recommendation, and purchase orders.
Points to consider:
How do I know if I have written enough?
“Business plans generally run from 20 to 30 pages, but they can range from 10 to 50 pages or more. The length depends on your preferences and the plan.” - Adapted from Microsoft Small Business Kit by Joanna L. Krotz, John Pierce, and Ben Ryan
What should I put on the cover page?
Your business name, contact information, and logo, if you have one.
How should I format the Table of Contents?
“Section headings that help readers identify broad-level topics that might interest them; descriptions of what is included in each section; page numbers that readers can use to quickly flip to what they most want to learn.” - Adapted from Microsoft Small Business Kit by Joanna L. Krotz, John Pierce, and Ben Ryan
Do I really need an introduction and a summary?
This is up to you – it depends on how formal your business plan will be, and if it’s just meant for your eyes, or investors too. You may have an introduction at the beginning, with a summary of everything at the end, or you may choose to just have an executive summary at the beginning in 2 pages or less. An executive summary will help readers decide if they are interested enough to read more.
Why do I need a business plan?
“A business plan precisely defines your business, identifies your goals, and serves as your firm's resume. It will help you allocate resources properly, handle unforeseen complications, and make the right decisions.” U.S. SBA http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/SERV_BUSPLANFAQS.html
Some final notes
Your business plan will change every year as your products change, the market changes, your finances change, and your knowledge of the market and advertising changes. Make it a yearly date to re-evaluate your plan, see if you met your goals, and if you didn’t what you need to do differently to meet your goals next year.
Additionally, keep yourself in line and organized by creating quarterly, monthly, or even weekly plans. These do not need to be an official part of your business plan, but they can be attached to it and related to your plan. Outline what needs to be done every quarter, month, or week to accomplish your goals and stay on track. A weekly organizer or day planner can be an effective tool to accompany your plan and help you make room for creating, planning, promoting, and having a personal life as well.
Additional tools and resources for further research:
Are you ready to start a business? The U.S. SBA checklist
http://web.sba.gov/sbtn/sbat/index.cfm?Tool=4
Do you have what it takes to run your own business? By the U.S. SBA
http://www.sba.gov/smallbusinessplanner/plan/getready/serv_sbplanner_plan_whatittake.html
Visual Outline of a Business Plan – use it to guide your writing
http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/SERV_WRRITINGBUSPLAN.html
Free Sample Business Plans
http://www.bplans.com/sample_business_plans.cfm
A Business Plan Template
http://www.bplans.com/business_plan_template/
Free online course for preparing a business plan
http://app1.sba.gov/training/sbabp/index.htm
Startup Cost Calculator
http://www.paloalto.com/common/calculators/startingcosts.cfm?affiliate=craftbusin
Cash Flow Calculator
http://www.paloalto.com/common/calculators/cashcalculator.cfm?affiliate=craftbusin
Finding your niche
http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/SERV_NICHE.html
Discuss business plans with other artisan business owners
http://www.etsy.com/forums_search.php?search_type=forum_title&search_query=business+plan
Collecting data for your marketing plan
http://office.microsoft.com/en-us/word/HA011415001033.aspx
Developing a marketing strategy
http://office.microsoft.com/en-us/word/HA011415001033.aspx
Monthly Budget Template for Word
http://office.microsoft.com/en-us/templates/TC300023751033.aspx?CategoryID=CT101172321033&av=ZWD000
Basic 2009 Monthly Calendar Template for Word
http://office.microsoft.com/en-us/templates/TC102851651033.aspx?CategoryID=CT102774121033&av=ZWD000
Business Plan for Startup Business Template for Word
http://office.microsoft.com/en-us/templates/TC010175201033.aspx?CategoryID=CT102530621033&av=ZWD000
Business Plan for Established Business Template for Word
http://office.microsoft.com/en-us/templates/TC010175181033.aspx?CategoryID=CT102530621033&av=ZWD000
Weekly AM/PM Planner Template for Word
http://office.microsoft.com/en-us/templates/TC300023781033.aspx?CategoryID=CT101423511033&av=ZWD000
Target Markets and Research
http://www.craftbusinesshome.com/targetmarket.html
REFERENCES
U.S. SBA
http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html
Craft Business
http://www.craftbusinesshome.com/startingahomebusiness.html
Craft Your Business Plan – Microsoft Word
http://office.microsoft.com/en-us/word/HA012340281033.aspx
