Why Writing a Business Plan Is Critical for New Marketers

Planning for success is the first step to take once you decide to start your business. I always recommend writing a business plan.

You may agree with me that, "if you fail to plan, you plan to fail."

Furthermore, the odds appear stacked against our success as affiliate marketers.

Fortune Magazine reported that 9 of 10 startup businesses fail. Also, there is anecdotal evidence that suggests that 90-99% of affiliate marketers fail.

The U.S. Bureau of Labor Statistics shows a consistent low survival rate of new businesses over the years. The following chart shows the survival rate data based on the number of years.

business survival rates

Business planning should improve survival rates.

The consensus among experts like SCORE suggests cash flow is a leading cause of failure. Cash flow problems include lack of adequate funding and spending control. Lack of a business plan is often listed in the top 10 reasons for failure.

StartUpNation says the #1 reason for small business failure is a "paranormal lack of planning."

What Can Writing a Business Plan Do for You?

Writing a business plan will provide a blueprint for building your business. Some people consider a business plan as a roadmap showing where a company is going in the future.

As I show you in this post, a business plan is a vital tool to help you create a successful business.

Furthermore, writing a business plan will help define your vision for your business. It also helps create goals and action plans to achieve your vision. And determine your resource requirements, and keep you focused on your business.

This gem is from the people at AllBusiness:

"A well-thought-out business plan forces you to think about the future and the challenges you'll face. It also forces you to consider your financial needs, your marketing and management plans, your competition, and your overall strategy."

I have compiled a list of elements to consider while writing a business plan. These will help you in defining your goals and the path your business needs to take to achieve them. The elements start with a concept of your vision and end with financial statements to keep your business on track to profitability.

Define Your Vision

Define your dreams into a strategic statement. The statement converts your idea into why you want to start a business. The purpose is to add clarity to your desire. From a strategic, from-the-top point of view, you can frame a reference to what you want to do.

Your vision defines the direction you want to take your business. From your idea comes the overall mission or overview, which adds more detail to your business concept.

Prepare an Overview

An overview or mission statement, if you prefer, describes how you will achieve your vision. The overview states in terms of who, what, how, when, and where.

Who is your target audience? And what problems do they have that need solutions?

What products do they need to solve their problems?

How will your product solve their problems?

When does the target audience need your products? Is there an immediate demand for your products?

Where are products or services delivered and consumed? Where is your market located?

Describe your Unique Selling Proposition (USP). Your USP defines how you will stand out from your competition. Furthermore, it determines why your target audience would select you over your competition.

When I started my tax practice, I knew I could not compete with H&R Block and other tax preparation businesses. So I had to identify and create a USP. Back in the day, I knew people who thought it inconvenient to take their tax document to a tax practitioner.

So I offered a "come to the customer" tax service by going to either their homes or business locations. While this may have been inconvenient for me, customers liked it when I came to them. I also mailed them a checklist and questionnaire to help them prepare for my visit.

Create Your Goals and Action Plans

Identify your goals for sales, profits, and marketing efforts as well as the associated action plans. Goals should be SMART.

To make your goals S.M.A.R.T., they should be Specific, Measurable, Attainable, Relevant, and Timely. (SMART goals are often associated with Peter Drucker's management by objectives concept.)

Marketing quote by Peter Drucker

Peter Drucker, American author, who contributed to practical foundations of the modern business corporation.

Don't think of goals in short periods. Goals can be strategic (long term, multiple years) and tactical (daily, weekly, monthly).

Your goals and action plans will determine your marketing, financial, and resource requirements.

Create Your Marketing Strategy

The basis of your marketing strategy is knowing your customer and how to reach them with your promotional material. You will need to identify promotional methods and materials.

Online marketing methods include content marketing, social media, referral marketing, paid advertising, and others.

Too many businesses fail because they did not know their customers. Or worse yet, ignored their customers.

Affiliate marketing online is a tough business. If you cannot provide value to the right target audience, some other company will. Understanding the motivation behind your customers' action can help make your business successful.

Part of your marketing strategy is knowing who your competition is. Some niches are highly competitive, make-money-online, for instance. You may have a great idea only to find someone else already had it. Considering that there are billions of internet users, your target audience should be large enough to be profitable.

Identify Required Resources

Identify the resources needed to complete your action plans and meet your goals. Resources include business tools, equipment, supplies, training, and internet services and software.

Successful entrepreneurs either have the required training, experience, and knowledge to succeed or the ability to get what they need. Business failure causes include businesses that did not get the necessary skill sets to establish a "going concern."

A "going concern" is an accounting principle that "for a company to be a going concern, it must be able to continue operating long enough to carry out its commitments, obligations, objectives, and so on."

Identifying the required resources ​is the center of developing a business budget.

Develop Financial Requirements and Projections

Develop financial projections that reflect how your business will be profitable. Your estimates should also include a breakeven analysis. The breakeven point is the moment where revenues and expenditures are equal. The breakeven analysis should consist of how many sales (or amount of commissions) needed to breakeven. The study should also include an estimate of how many people need to see your promotions to generate one sale.

Also, develop a budget based on the required resources. Creating a budget helps identify resource requirements as well as control costs.

Plus, having a budget and financial projections help measure performance against goals.

writing a business plan infographic

Infographic for writing business plans

More Business Plan Thoughts

Business plans can be as simple or complex as you want; from one page to many. My tax preparation business plan was elaborate. Professional tax preparation software is expensive. I also incurred costs being an authorized IRS e-filer transmitting client tax returns directly with the IRS.

Business plans are meant to be dynamic. They should be reviewed periodically and revised as necessary. After all, they are a blueprint for action. If you don't follow your plan, it is a waste of time to prepare it. Sticking to the plan should help avoid chasing the next shiny object or buying into a scam.

Writing a Business Plan Summary

If you wish to minimize the likelihood of business failure, then I recommend writing a business plan. It can be one page if you like.

Writing a plan will help you describe your vision and create a roadmap to converting your dream into reality. Another significant benefit is managing your expectations. If you have an estimate of the effort to turn your vision into profits, you should realize the time and effort it will take.

Developing goals and action plans will help you focus on the higher priority tasks first. A plan will help you set your direction and focus.

Writing a business plan will equip you to start a successful business.

Put your ideas down on paper and get started today.

Writing a business plan will equip you to start a successful business.

Put your ideas down on paper and get started today.

If you have any questions or comments about writing a business plan, please fill in and submit the form below. I love feedback.

Additional Information:

Affiliate Marketing Guide

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