Starting to sort through the details of your business? We’re here to help!
At a high-level, business owners use a business plan to assess if their business is viable (will it make money) and to overcome future challenges.
Having a business plan doesn’t mean you’ll be successful and neither does not having a business plan mean you’ll fail. It’s still a good idea to understand the details of your business before you jump into it and to return to it on a regular basis to assess how your business is doing.
Creating a business plan takes time, research, and energy. Take it step by step with us, and you’ll make it there.
Your business plan should include:
1. An executive summary including a vision statement, mission statement, target clientele, and a competitive edge unique to your business.
Keep it brief. Many of the elements you’ll want to introduce in your executive summary should be addressed in more detail elsewhere in your business plan.
Once you’ve completed your executive summary, practice presenting it and share with other family members or friends to get their input. Become comfortable explaining your business idea in 1 sentence and in 1 minute. You’ll have a lot of opportunities to tell people about your business, making your best impression (quickly) is critical.
As you’re defining the values of your new business, consider the relationships you’ll be forming throughout its journey. Ask yourself, how would I like to relate with other ESPs, my employees, Arizona families, and potentially investors? Consider what sort of relationships they want to foster. Thinking through these relationships beforehand will help you form your own identity as an ESP and define your values. You might be surprised how many people get excited about your business and want to offer you additional support or investment!
2. A company description outlining your product or service and organizational structure.
A lot of your focus will be on delivering and improving your primary product — tutoring, training, teaching students, or a physical product. Taking special interest in providing an awesome customer experience is essential. Think through the details of what you want your customers to experience and how you’ll organize your business to reach those goals. Remember, it’s okay to start simple, ie: one product or one class. Everyone has to start somewhere!
3. Market research into the education market in Arizona capturing the size of your market (families you can market to and reasonably accommodate).
Entrepreneurs gain a lot from researching like-minded businesses and competitors in your market area. As you assess these organizations, take note of their marketing, the services they offer, and the commonalities between them. There’s no better way to gain insight into best practices and how you can position your own business to stand out than surveying who’s already doing it.
Another component of market research is understanding your customers. Unless your primary service is web-based, you need to have a firm understanding of the distance your clients or you are willing to travel.
Once you have an understanding of your geographic reach, capture an estimate of the number of potential clients you’ll have access to. As an ESP, your target market will be parents likely to have the expendable income to enhance their kid’s education experience. For example, you could use the U.S. Census Data to estimate the number of families with children above in your area and infer the number of children on an Empowerment Scholarship Account and families above a certain income in your area. It’s helpful for you to know that there are 1.1 million kids eligible for public education in Arizona, meaning K-12. Arizona’s ESA program is rapidly growing, with over 51,000 account holders as of April 2023. Remember that you may end up becoming an ESP to families with an ESA, but kids in public, private, or homeschool may end up wanting your services, too! Some ESPs create tangible products (like educational delivery boxes) and some do online classes or tutoring. We’ve seen ESPs launch and end up serving families in multiple states!
And remember, these are informed guesses! Don’t waste your energy perfecting your market research, aim to generally understand your competition and your clientele.
4. A strategy that includes a plan for marketing, sales, and operations.
It’s likely that as an ESP many of your leads will come through referrals. Providing an awesome product and forming meaningful relationships with the families you serve will go a long way to generating new business. Networking with other entrepreneurs and families will be essential too. We can’t recommend enough making networking a weekly part of your work and sticking to it! You’ll catch the hang of it soon enough.
Understand the suppliers and equipment you’ll need to make your business work and its cost.
Does your ESP need physical facilities to host your service or employees? You’ll want to capture the contours of this cost too.
5. A description of your management team briefly outlining their experience.
6. A financial plan detailing a financial forecast for your business.
As you’ve been building out your business plan so far, you’ll have begun outlining the costs and revenues (income) you’ll need to form your financial plan. Capturing these elements and forecasting them across your first year will not only help you make informed financial decisions during your launch, but also help you communicate your business’s financial viability to potential investors, partners, and employees. It can also be helpful to know how much you may need to fundraise, if you’re going the non-profit route and want to work with grants and donations as well.
As you’re finalizing your business plan, set aside time to edit and re-edit drafts. This document (likely) won’t remain internal to your business for long. Edit your business plan until it’s clear, concise, realistic, and persuasive. Master the components of it and be prepared to answer questions. Many entrepreneurs use their business plan to attract investors, onboard new employees with a leaner version, and form the backbone of their communication strategy. It’s a lot of work to perfect the language, but it’s worth the time. If writing isn’t your strongest skill, hiring a copywriter to edit this document will be worth the investment.