A business plan is a great tool to evaluate an idea to see if you can make money with it. This does not have to be a long complicated, 40-page corporate document. In fact, the most useful business plans for startups and small businesses are often short, clear, and easy to update.
In this guide, you’ll learn how to create a simple business plan and how to use competitor research and a SWOT analysis to determine the right price for your product or service.
1. Start with the Business Section
The first step in writing your business plan is to clearly define what your business does. This section, often called the “Business Section,” describes your product or service in just a few sentences.
Ask yourself:
- What exactly am I offering?
- Is it a physical product, a digital product, or a service?
- How does it benefit my customers?
Example: “I offer personalized online tutoring in high school math, specializing in algebra and geometry, using live video sessions and interactive digital tools.”
Keep it short, direct, and easy to understand. If someone reads this section, they should immediately know what your business is about.
2. Leave the Executive Summary for Last
Even though the executive summary is the first section of a formal business plan, it’s best to write it last. The summary is an overview of the entire plan, including your business concept, market research, strategy, and financial projections. By waiting until the end, you’ll have all the details needed to write a strong, accurate summary.
3. Use a SWOT Analysis to Understand Your Market
There is a whole post about this coming soon, but here is the overview:
Before you decide on pricing, you need to understand how you compare to other businesses in your space. A SWOT analysis is a simple but powerful framework for evaluating your own business and your competitors. SWOT stands for:
- Strengths – What you or your competitors do exceptionally well. This might include product quality, customer service, speed of delivery, or brand reputation.
- Weaknesses – Areas where there’s room for improvement. This could be higher prices, slower service, limited product selection, or weaker online presence.
- Opportunities – External trends or gaps in the market you can take advantage of. Examples include new technology, shifting customer preferences, or underserved niches.
- Threats – External factors that could harm your business, such as economic downturns, new competitors, or changing regulations.
How to Use SWOT for Competitor Research:
- Find at least three competitors offering a similar product or service.
- Visit their websites, review their pricing, marketing strategies, and customer reviews.
- Create a SWOT chart for each competitor.
- Create your own SWOT chart for your business.
- Compare them side by side to see where you have an advantage and where you may need to improve.
Example:
If your competitor has a strong reputation but slow delivery times (weakness), you might highlight your faster turnaround as a selling point. If you notice all competitors charge higher rates, you could consider entering the market with a slightly lower price — or matching their rates but offering added value.
4. Using SWOT to Set Your Price
This post is also coming soon, but here is an overview:
Once you’ve completed your SWOT analysis, you’ll have a clearer picture of your position in the market. Pricing should balance your costs, your value to customers, and your market positioning.
- If your strengths include premium quality or unique expertise, you may justify a higher rate to signal quality.
- If you aim to attract a large customer base quickly, a competitive or lower price might help you gain market share.
- Always consider opportunities and threats — if your target market values affordability, pricing too high could be a threat. If customers associate higher cost with better results, pricing too low could hurt your brand image.
Remember: Price is more than just a number — it’s part of your business’s identity.
5. Build the Rest of Your Plan
Once your product description and pricing strategy are clear, fill in the other core sections of your business plan:
- Market Research: Who your customers are and the problem you solve for them.
- Marketing & Sales Plan: How you’ll reach and persuade customers.
- Operations Plan: What tools, equipment, and processes you’ll need.
- Financial Plan: Your costs, expected revenue, and break-even point.
6. Keep Your Plan Simple and Flexible
A business plan is a living document. Start simple, keep it clear, and refine it as you learn more about your market.