Key Points
- Build your first business plan around a clear set of services that match your skills and experience.
- Referrals are helpful in starting your business, but focused marketing will support steady growth and bring in new clients.
- When setting your prices, make sure to include the costs involved in running your business.
Starting your own business takes time, planning, and preparation. One of the most important parts of getting started is making a strong business plan. To help guide you, here are eight simple steps to help you create a clear and useful plan for your small business.
1. Outline Your Offerings
Start by building your business plan around a few key services that match your strengths and skills. For example, offering general marketing or tech help is a good start. But if you say you’re a “social media marketing expert who manages SEO for small and mid-size businesses,” you are giving a more specific and appealing service that can attract more clients.
2. Develop a Marketing Plan
A big part of your business plan is how you will bring in new clients. At the beginning, client referrals and job platforms are great ways to get started. But as your business grows, your marketing will need to grow too. Think about who your ideal clients are and decide if you should use tools like a website, social media, or direct marketing to support your early reputation.
3. Research Your Target Audience
Understanding the kind of clients you want to work with—both right away and in the future—is important for winning new business. Your current network may help you connect with these clients quickly. But before you make promises, be sure you can meet their needs and deliver value.
4. Price Your Services
Before you approach clients, make sure you can answer an important question: “What will it cost?” To set your prices, consider things like your level of experience, the clients you want to work with, and what others in your industry charge. This step takes some research, but knowing your rates is important if you want to succeed in the market.
Tip: Don’t forget to include overhead costs when pricing your services. These can include tools and supplies, marketing, office space, or paying others who work with you. A clear budget will help you choose a price that covers all your costs. Tools like a bill rate calculator can also help make this process easier.
5. Decide Where to Work
Think about where you will do your work. Will you work from a home office? Use a client’s space? Rent an office or join a shared workspace? To decide what works best, think about your line of work, how much you can spend, what kind of space or tools you need, who your clients are, and how you work best. Make sure to include your workspace choice in your business plan.
6. Prepare a Standard Contract
Some clients may already have a contract for you to use. Others may ask you to provide one. In that case, you’ll need to create a standard contract ahead of time as part of your planning. Since this is a legal document, you might want to hire a lawyer to help. You can also talk to a business consultant to learn what contract terms are best to include.
7. Obtain Required Licenses and Registrations
As an independent contractor, you’re seen as a small business owner. That means you may need licenses and must follow tax rules from local, state, or national government offices. Before you launch your business, look into which licenses or registrations you need to follow the law.
8. Set Long and Short-Term Goals
Most people start a business because they want to succeed—but it’s important to decide what that means for you. Is success making a profit right away? Breaking even within six months? Earning a set income each year, growing your client base, or having more free time? Write out your goals in a clear, measurable way in your plan so you can track your progress.
Once you have a complete business plan, you’ll be in a strong position to start your work as an independent contractor and turn your business goals into reality.
