The business plan defines the foundation of the business. A well-written business plan will help you get funding, recruit partners, set goals, and know where to allocate your funds. It will show your company’s mission and keys to success. All businesses need a business plan — even web design businesses.
In this article, we’ll look at the elements of a business plan and share some advice for aspiring web designers on how to approach each element for their web design business.
Elements of a business plan
There are several ways to write a business plan. You could go the detailed route, which investors love, or the lean route, which is easier to write. Let’s look at the detailed (traditional) route. This is what investors will ask for, and it teaches you more about your business.
The business plan is usually written as a document with several components. Let’s take a look at each component and see how it applies to a web design business.
This is a summary of the entire business plan. It describes your company and its goals, your leadership team, employees, and the types of websites you intend to create. It also indicates the demand for those websites and how you will create them. Your executive summary specifies cost, profit, and how you will reach your target audience.
This section describes what you do, what makes you different from your competitors, and which markets you serve. It states your competitive advantage, expertise, location, strengths, and business model.
Your company description will explain everything from your services to your target customer, business structure, and competitive advantage.
How will the business compete with similar business? What sets your design business apart from other web design businesses?
Who is your target customer? What type of customers do you want to build websites for? This will help decide the types of websites you will build, such as those for churches or online stores.
Are you the sole owner or is this a partnership?
Anyone qualified to provide business plan advice will tell you that you need to do your market research. Your market analysis will describe the amount of business that’s available to you and who your competitors are.
What is your skill-set for the web development work you intend to provide? What are your competitors doing and what are their strengths? What can you do better?
Organization and management
This section introduces the owners, their roles and qualifications, and the legal structure of your business.
Show each person’s experience and how it will contribute to the success of the web design business. Include resumes of key team members. Will it be a general or limited partnership, a sole proprietor or LLC, or a C or an S corporation?
Service or product line
Your service line describes the exact nature of the web design service you provide. It shows how it benefits your customers, and what maintenance should be done and by whom.
To what extent will you design the website? Will you include features that have to be developed? How will you develop those features? Does this require you to partner with a developer? How often will the website need to be changed? Will you include small changes in the agreement?
Marketing and sales
Marketing is forever changing, but like the other aspects of your business plan, having a basic idea of how you’ll market your business will give you a roadmap to follow. Discuss your sales strategy, how you’ll reach your clients, and how a sale will take place. This section will help build your financial projections.
How will your potential clients know about your web design business? Will you advertise? If so, what types of advertising will you use? How much will it cost? Will this include IT-related magazines, websites, Google ads, etc.?
Professionals who give business plan advice will remind you to be well-prepared in case funding request opportunities present themselves. If you’re seeking funding, here’s where you’ll provide information about costs, ROI (return on investment), and a timeline of how much you expect to make and by what dates. Show how much funding is needed for the next five years and exactly how it will be used.
What is the overhead? Will you need money to live on until your web design business starts paying you and other employees? What are the insurance costs? What equipment will you need? Will you need an office? How much will your website cost? Will you need to purchase design tools?
Provide the data to support the funding request. This charts the financial projections for the next five years and demonstrates that your business will be a financial success.
Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, use monthly projections. Explain your projections and show them with graphs and charts.
For an established business, include income statements, balance sheets, and cash flow statements for at least the past three years. It should also include any collateral you own.
This section is optional. It’s a list of supporting documents including credit histories, resumes, references, licenses, patents, permits, contracts, legal documents, and product images.
The SWOT analysis is a good tool to help you build your business plan. It shows your strengths, weaknesses, opportunities, and threats within a matrix or a list.
What are your strengths as a web designer? What is your skill level with specific design tools?
What are your weaknesses in web design? How will you overcome those weaknesses?
What market opportunities are there for your web design strengths? Is there room in the market for another designer with your web design strengths?
What threats will your business face? Is it difficult to stand out from the crowd?
Business resources from GoDaddy
Here are a few tools from GoDaddy that are helpful in running your business.
Check out cloud-based versions of Microsoft Office with secure online storage. Use Word, Excel, PowerPoint, and more — anytime and anywhere. There are three plans to choose from.
GoDaddy Pro provides free tools for designers and developers to help you manage your clients and websites. Features include:
- One-click updates across all WordPress sites.
- Automatic daily maintenance including backups and security.
- Performance, security, and uptime monitoring in real time.
Building a business plan for your web design business isn’t that difficult but it can be time-consuming as it requires lots of research and planning. It’s time well-spent, though, as it shows the viability of your business, helps you know where to make changes, and helps you plan for the best direction, so you can lead your business to success.