How to create a business plan step by step (with a practical example)

If you ask ten successful entrepreneurs what they would do differently if they were starting over, most will tell you the same thing: "I would have made a plan before spending a single dollar." A business plan isn't an academic paper or a formality; it's the roadmap that tells you whether your idea can make money, how much you need to get started, and what you have to do each month to achieve it.

At the Hispanic Entrepreneurs Academy, the business plan is the first module of our Business & Taxes program. In this article, we'll teach you the same method we use in class, step by step and with a real-world example.

What is a business plan and what is it for?

A business plan is a document that describes what your business sells, to whom, how it will make money, and what you need to operate it. It serves three specific purposes:

1. Make decisions based on numbers, not hunches.
2. Detect problems before they cost you money (incorrectly calculated prices, hidden costs, market that is too small).
3. Supporting applications for credit, licenses, or investors: banks and organizations that provide microloans almost always require it.

It doesn't need to be 50 pages long. For most small businesses, a clear 5- to 10-page plan is more useful than a long document that no one will read.

How to make a business plan in 7 steps

1. Define the problem you solve and for whom.

Every successful business solves a problem. In one sentence, describe your target customer and the problem you solve for them. For example: "Hispanic families in Clarksville who need homemade Venezuelan food for events, without the hassle."

2. Describe your product or service

What exactly do you sell, in what formats, and what makes you different from other existing options (price, quality, language, service, speed).

3. Study your market

You don't need an expensive study. Answer honestly: How many potential customers are there in your area? Who else offers the same thing? What do they charge? Visit your competitors, check their social media and Google reviews.

4. Calculate your actual costs

This is where entrepreneurs most often go wrong. Add everything up: materials, transportation, permits, insurance, payment app fees, and your own time. If your time isn't on the cost list, your plan is incomplete.

5. Set your prices with a margin

Your price should cover costs and generate a profit. A simple formula to start with: total cost of the product or service ÷ 0.7. This sets aside at least 30% for gross margin. Then adjust according to your market.

6. Plan how to get your first 10 clients

Be specific: Google Business profile, local Facebook groups, partnerships with other businesses, distributing flyers at community events. "I'm going to do marketing" isn't a plan; "I'm going to ask every customer for a review" is.

7. Write down your target numbers for the first year

How much do you want to sell per month, how many customers do you need to achieve that, and how much can you spend? Review these numbers every month and adjust accordingly.

Example of a summarized business plan

Let's look at the example of "Dulce Arepa", a fictional event food business in Clarksville, TN:

• Problem and client: Hispanic families and local businesses that want home-style catering for events of 20 to 100 people.
• Product: Venezuelan food catering packages, with three price levels per person.
• Market: In the Clarksville area live tens of thousands of Hispanics and there are only two similar providers; neither of them offers formal packages in Spanish.
• costs: $6.20 per person for supplies, plus transportation, packaging, county permits, and insurance. Owner's time: 6 hours per event.
• Price: $14 per person in the basic package (gross margin over 40% after accounting for working time).
• First customers: Google Business profile, partnership with the local church and two Hispanic businesses, launch promotion for the first 5 events.
• Year 1 Goal: 4 events per month starting from the sixth month, with sales of $4,500 per month.

With this one-page summary, the owner of "Dulce Arepa" already knows how much she needs to sell to make the business worthwhile, and any bank can understand her business in two minutes.

Common mistakes when making a business plan

• Copying generic templates from the internet without adapting the numbers to your local reality.
• Do not include your own salary in the costs.
• Be optimistic about sales and forget the slow months.
• Make the plan once and never look at it again: the plan is reviewed every month.

Learn to make your plan with guidance

In our in-person program in Clarksville, TN, each student graduates with a business plan developed in class, in Spanish, and with one-on-one mentoring. The Class of 2027 is now forming, and scholarships are available: visit our enrollment page and submit your information.