How to Write a Business Plan for Small Business: 8 Steps

Starting your own business takes careful planning and preparation. A key part of this process is creating a solid business plan. To help you get started, we’ve outlined eight straightforward steps to guide you in crafting a simple and effective plan for your small business.

1. Outline Your Offerings

Focus your initial business plan around a specific selection of services within your areas of subject matter expertise. For example, offering marketing or tech consulting services are good broad overviews, but designating yourself as a “social media marketing expert who configures and monitors SEO optimization for small-to-medium businesses” provides a different value proposition and will attract more clients.

2. Develop a Marketing Plan

Core to a business plan is how you intend to attract new clients. Client recommendations and job referral services are excellent resources when starting out, but as your business expands, so will your marketing needs. Consider your target audience and determine whether efforts such as a website, social media marketing, or traditional direct marketing might be the best supplements to an initial word-of-mouth reputation.

3. Research Your Target Audience

Knowing who you want to work with both initially and eventually is an important step in preparing to win business. Depending on your existing network of relationships, you may be able to immediately reach your goal client—but make sure you’re prepared to excel and deliver value before making a commitment.

4. Price Your Services

Before reaching out to potential clients, it’s crucial to prepare for one of their key questions: how much your services will cost. Pricing your services involves several factors, including your experience, target clients, and industry standards. While this step takes some research, understanding your bill rate is essential for positioning yourself effectively in the market.

Check Out: When pricing your services, don’t forget to account for overhead expenses that go into owning and managing a business: supplies and equipment, marketing costs, office space, and salaries for any employees or subcontractors. A good budget can help you set a rate that covers your costs, and a bill rate calculator such as the one MBO Partners offers can make the process even easier.

5. Decide Where to Work

Do you plan on working out of a home office? Will you set up a workspace in client offices? Or, will you your own space or opt-in to a coworking facility? To decide which solution works best for you, consider factors such as your industry, desired overhead, space and equipment requirements, client type, and personal working style. Take inventory of your needs and factor this choice into your business plan.

6. Prepare a Standard Contract

Some clients have standard contracts they require all their independent contractors to use. Others will not, and in these cases, the responsibility of preparing an agreement will be yours. Be prepared for this and create a contract template beforehand as part of your business plan. Because this is a legal document, you may want to hire an attorney to draft one for you. Another option is to talk with a consulting services expert to discuss the best options for standard contract clauses.

7. Obtain Required Licenses and Registrations

As an independent contractor, you are considered a small business owner. This designation comes with license and tax requirements from local, state, and federal government agencies. Before getting started, research what licenses and registrations your business will require to operate legally.

8. Set Long and Near-Term Goals

Everyone begins their independent career with the goal to succeed. But it’s important to define what success means to you. Does it mean immediate profitability, or hitting your break-even point after the first six months? Are you looking to earn a specific annual profit, triple your client list, or spend more time with your family? Include detailed, measurable goals in your business plan to give yourself key performance indicators you can use to gauge success.

With a solid business plan in place, you’re ready to make your dreams of working as an independent contractor a reality.