How to Research Your Business Plan

No matter how eager you are to launch your business based on that winning idea you have in your head, writing a thorough business plan is a must on your path to entrepreneurship.

Not only will you be expected to present a strong business plan to potential lenders and investors when seeking funding, but you’ll use this document to guide your decision-making as you keep building your company. In fact, a solid business plan will search as a roadmap for the next three to five years of small business growth.

Wonder how to go about conducting research for your business plan? Here are some tips.

What Will You Need for Your Business Plan?

While no one can tell you exactly what needs to go in your business plan, it’s helpful to use a template as you’re crafting it — this way you can make sure you’re not missing important information.

Here is a business plan example, including some of the most commonly found sections from to Yahoo Small Business:

  • Executive Summary: This section should be between a page and four pages and will prime readers for what is to come ahead, offering high-level overview.
  • Business Description: Cover the “what, when, where and how” of your business.
  • Market Analysis: Put together a data-driven analysis of whichever market(s) you will be entering, as well as your target audience within that market.
  • Products and Services: Describe in more detail exactly what you are selling.
  • Marketing and Sales: Explain how you plan to reach potential customers and convert them.
  • Financial Information: Give an in-depth rundown of how your financial numbers look now, including but not limited to: expenses, start-up costs, additional funding needed.
  • Projected Income: Look ahead two to three years in terms of income and balance sheets.

Depending on the nature of your business, you may need to add more sections to your business plan to give yourself and readers a comprehensive idea of where your company is headed. This just represents some of the fundamental points to include in your document.

Gather Primary and Secondary Research

When you’re conducting research for your business plan, keep in mind there are two different kinds of research upon which to draw: primary and secondary.

As Entrepreneur writes, primary research involves studying customers firsthand. An example would be surveying a pool of potential customers about what they want, need and expect from your product type. Another source of primary information would be using your website analytics to gain an understanding of customer usage habits — like when people tend to shop, how long they view certain products and how they engage with your website.

As the name implies, secondary research would include reports and statistics that someone else published. You can still learn a lot from these secondary information sources and include them in your business plan. They can go a long way in supplementing the primary research you are able to conduct yourself.

The soundest business plans will combine primary and secondary research to fill in all the gaps. Having a healthy mix of research sources also signals to readers, like potential lenders or investors, that you have done all the legwork possible to understand your business and its market from every possible angle. If you find yourself leaning toward just one form of research, see what else is out there. What you learn may surprise you and help you make savvier decisions.

At the end of the day, the first step of writing a business plan is knowing how to approach the research process.