Business plans help guide you as a business owner through each stage of starting and managing your business. Your plan will show you how to structure, run, and grow your new business.
Business plans can help get you funding or bring on new business partners. When applying for a business loan, the majority of credit unions or loan programs will ask for a business plan in order for you to express your confidence in your business idea. This will also encourage investors into loaning you the money.
But not all businesses need a plan. According to Carl Schramm, author of “Burn the Business Plan”, many big companies did not have a business when they first started. “-Companies like Amazon, Apple, Facebook, Microsoft, none of these companies ever had a business plan before they got started.”
We understand that not all businesses need a comprehensive plan, but we suggest smaller businesses and startups at least recognize that they need an outline. An outline will help a small business see its strengths and essentials for its business.
Here, we will show you a brief overview of what each section of your business plan should cover. This is just a guide, so take or leave any information you desire from this article. Customize each section to your brand, goals, and product or services. Just always keep in mind the idea is to present your business in the most professional, inviting, and credible way possible.
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Executive Summary
An executive summary should summarize what you expect to accomplish with your business. But it’s meant to highlight what you intend to express about the rest of the plan, so write this section last.
This introduction should include your mission statement and details about your products and/or service. Your mission statement should be irresistible and appealing as you briefly explain why you’re starting your company. Include inspiring details about your experience in the industry, showcasing your goal in order to become successful.
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Company Description
In your business description, you should include your goals, key info about your business, and your targeted market. Here you will explain why your company is different and/or better compared to other competitors. You can do this by breaking down your business’s strengths, proficiency, and competitive advantage.
Your competitive advantage is your company’s unique skills and resources which will achieve results better than others in your field. Understanding what sets you apart from your competitors can help you succeed with your business.
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Market Analysis
In this section you should be showing your understanding of the ins and outs of the field you plan to have your business in. You can do this by backing up the strengths you highlighted in the company description. By showing data and statistics you can break down the industry’s trends and themes which will assist you in showing your knowledge of the field.
Display what other businesses’ failures and triumphs are by showing what they are doing with their products, advertisements, and investments. The market analysis should help give a visual representation of your targeted customers. Present on how much your customers make, what their buying habits are, which services do they need, and more.
Overall, the numbers you are displaying should help answer why your business can achieve greater than those already out there.
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Competitive Analysis
Any good business plan should have a clear comparison of what your business is compared to your direct and indirect competitors. A competitive analysis should prove the knowledge you have of the industry by having an assessment of your competitor. This includes their strengths, weaknesses, and any advantages they might have.
You should also have an analysis of how you will overcome any barriers to enter into your chosen market. You can demonstrate this by showing the unique qualities your business possesses compared to your competition.
Your primary goal is to distinguish your business, but also persuade potential funding sources to assist you in bringing your business to life. If there are any issues that could draw you back from entering your business into the market, like high upfront cost, this is where you would mention why you are asking for financial assistance.
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Management and Organization
This section will outline your business’s legal structure and management resources. Introduce your internal management team, your external management resources, and your human resources need. Summarize any special skills and responsibilities each team member in your business brings to your company.
When asking for financial funding, it could be helpful to include an advisory board. An advisory board is a formal diagram showing who is where on the management team. This also shows which person does what in the company, assisting in explaining the structure of your team.
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Product and Services
A detailed breakdown of your products and services will give a clearer description of what your business is creating and selling. It can also present how long your products or services could last and how they will meet existing demand.
Don’t forget to mention your suppliers and any other key information about how much it will cost to make your products as well as how much money you are hoping to bring in. Your revenue should show how much you plan your business to make within a year.
Mentioning all information pertaining to patents and copyright concerns helps display the credibility and authenticity of your brand.
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Sales and Marketing Plan
This section should offer a detailed explanation of your sales and marketing strategy, pricing plan, promotion ideas, and anything pertaining to your products or services. You should demonstrate how you plan on selling your products/services and how you will persuade your targeted audience to purchase from you.
Outline your unique selling proposition to explain what sets you apart from the competition. Your USP should convey a message to the public justifying why your business is worth spending money on. You can do this by expressing your differences from other competitors through a slogan.
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Operating Plan
Make sure you explain in detail how your business will be run. Your operating plan should provide your business’s physical location, descriptions of the facilities and equipment, types of employees needed, inventory requirements, suppliers, and any other operating details.
Describe your manufacturing process and specialty items that are needed for your day-to-day operations to continue to explain how your business will successfully function.
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Financial Plan
The main reason anyone wants to start a business is to make a profit, to make their own money, and be their own boss. It’s important to demonstrate the knowledge you acquire of your current finances, funding needs, and projected income.
In this section, you will need to provide a description of your funding requirements, detailed financial projections, and a financial statement analysis. You must also present three financial documents: your balance sheet, your income statement, and a cash flow projection.
You must also provide an anticipated revenue for the first 12 months and your annual projected earnings for the second, third, fourth, and fifth of business. This should be based on the market research you have done in your field of work.
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Appendices
This is the last section of your business plan where you will include any additional information to assist you in the credibility of your business. You can do this by providing marketing studies, photographs of your product, permits, patents and other intellectual property rights, credit history, resumes, marketing materials, and any contracts pertaining to your business.
The appearance of your business plan matters. When you’re writing it up make sure you are organized, precise, and descriptive. If you are looking for funding or investors, the business plan should look like a formal document. Think of it as your thesis essay before receiving your master’s degree.
Pay attention to the margins and formatting. There should be a title page and table of contents, explaining where each section is in the plan.
If you need printed copies, get them professionally printed and bound. This shows the legitimacy and how important this document is. First impressions are the main factor in creating success and you want to make a memorable one.
