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What Is a Business Plan?
Understanding business plans, how to write a business plan, elements of a business plan, special considerations.
- Business Plan FAQs
Business Plan: What It Is, What's Included, and How To Write One
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
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A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.
A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.
Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.
Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
- A business plan is a document describing a company's core business activities and how it plans to achieve its goals.
- Startup companies use business plans to get off the ground and attract outside investors.
- A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives.
- Businesses may create a lengthier traditional business plan or a shorter lean startup business plan.
- Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.
Want Funding? You Need a Business Plan
A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.
Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.
A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.
While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.
A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.
Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.
When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.
Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.
The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.
As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.
- Executive summary: This section outlines the company and includes the mission statement along with any information about the company's leadership, employees, operations, and location.
- Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
- Market analysis: A firm needs a good handle on its industry as well as its target market. This section of the plan will detail a company's competition and how the company fits in the industry, along with its relative strengths and weaknesses. It will also describe the expected consumer demand for a company's products or services and how easy or difficult it may be to grab market share from incumbents.
- Marketing strategy: This section describes how the company will attract and keep its customer base and how it intends to reach the consumer. A clear distribution channel must be outlined. The section also spells out advertising and marketing campaign plans and the types of media those campaigns will use.
- Financial planning: This section should include a company's financial planning and projections. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.
- Budget: Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
Unique Business Plans Help
The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.
Types of Business Plans
Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.
Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.
Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.
A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.
Other Considerations for a Business Plan
A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.
If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.
Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.
Think of the business plan as a living document that evolves with your business.
A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.
Why Do Business Plans Fail?
Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with a focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out-of-control budgets. Markets and the economy can also change. Without flexibility built into your business plan, you may be unable to pivot to a new course as needed.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.
Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.
Small Business Administration. " Write Your Business Plan ."
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What Should a Business Plan Include?
A business plan serves as a roadmap to successfully launch a business. It helps you overcome the challenges you might experience in your industry. Learn how to create and use a business plan for your startup.
One of the most fatal mistakes that aspiring entrepreneurs make in launching a startup is forgetting a business plan . You wouldn’t launch a ship at sea without establishing its routes and the direction you’ll steer it to. Without proper planning, your ship will end up adrift or worst, dramatically sink when the tides hit. And in a volatile commercial industry, the tides are constantly changing.
Avoid common startup mistakes by creating a business plan. A business plan not only strengthens your foundation but also helps you navigate the ever-changing field of business. Chances are your customers’ preferences will change over time and you have to keep up with them. Hence, a business plan also changes accordingly.
But how exactly do you create a business plan? Is there a template to follow? Should you enlist the help of other experts to write it? Today, we’ll look into what should be included in your business plan and how it should be written. The first step is by understanding what it is and what it is for.
What is a business plan?
A business plan is an official company document that breaks down all the goals of a business and how to achieve them. It basically lays out the groundwork for your idea to come alive. It’s often referred to as the “blueprint of the business”, summarizing your goals.
Although there are many ways to write it, its key point usually discusses the financial, marketing, and operational strategies of the business.
What is it for?
A business plan serves as a guide for a growing company. It’s a consistent reference for business owners and stakeholders to base critical decisions on. It’s especially useful for early-stage startups to attract investors. When a company doesn’t have a proven track record, it can lay out its full potential instead.
Not only is the business plan useful for the initial launching of a business, but it also helps with pivotal changes. Since the market is perpetually changing, it’s crucial that your plan also evolves with it. Hence, the goals and methods of achieving will be updated. In some cases, a whole new plan is created if the company wants to drastically move in a new direction.
What’s included in a Business Plan
Although there’s no fixed formula for writing a business plan, there are some identifiable key points. These are generally the items factored in its creation:
1. Executive Summary
The executive summary outlines the whole plan. You start with a clear introduction of who you are, what you sell, and what your ambitions are as a business. This section includes your mission statement, product description, and the basic overview of your company’s structure. It should also include your financial plans .
2. Business Description
The business description provides detailed information about your industry. It must describe its current outlook as well as its profit potential. You will go into detail about your target market and other organizations or businesses you cater to. Also, this section briefly discusses what problem the business is trying to solve.
3. Market Analysis
A business must have a firm understanding of its target market and should be able to prove its sustainability. The market analysis provides trends and studies about the target consumers—their size, demographics, buying power, and frequent activities. This section also touches briefly on the competitors.
4. Product Development
Investors need a clear idea of how you would create and maintain your product. The development plan section contains the details of the product’s design; its production methods, lifecycle, marketing, and development budget. This includes the overall strategy of how it will be sold in the market.
5. Marketing Strategies
The product is only as good as how much it will sell. Therefore, this section describes how you will present your products and services to the market. This will discuss your marketing campaigns, distribution channels, and types of media you’ll tap into. You will summarize how you intend to reach your customers and pitch your products to them.
6. Operations and Management
Your investors need an overview of how the business functions. The operations plan highlights the logistics of the company such as team responsibilities, division tasks, and operational expenses. This helps track down who is responsible for certain areas of the business.
7. Financial Plans
Money mobilizes the idea. Hence, it’s important to keep an accurate record of where it’s going. This section shows the company’s monetary plans and its future projections. This includes financial statements, balance sheets, and third-party business transactions. For startups, it will mostly contain the target profit and estimates of expenses.
Tips on Writing a Business Plan
Now that we have an idea of the business plan template , it’s time to learn how to write it effectively.
Here are some things to keep in mind when you’re writing one for your business.
- Keep it concise. It serve as a guide for the company and the investors. It needs to be easy to understand and direct to the point. You can’t afford to waste a reader’s time by creating a 100-page business plan. Instead, aim for a summarized version of your plan, only highlighting the important points and outlining the rest.
- Avoid jargon. Ensure that everyone, especially investors, can understand your business plan. Do not include complex jargon in your content. Save the technicalities for the experts and simplify the terms in explaining your ideas.
- Keep it up-to-date. As previously mentioned, business plans are not static. Over time, a lot of things in the industry will change and might make your original plans obsolete. Frequently update your business plan according to what’s new in the field and with new methods you’re employing. Remember, a business plan is only useful if it’s still relevant.
Build your Business
Business plans are important when you’re starting your business from scratch. However, the success of your business still heavily relies on their execution. A lot of startups fail because they can’t push through with what was proposed in the business plans.
More than just articulating your ideas, you need to do a lot more to make them come to life. For one, you’ll need the capital to kick things off and make everything operational. Second, you’ll need to hire the best people to run your operations. Lastly, you have to find investors to sustain your business.
One way to ensure that your business plan is properly executed is by enlisting the help of business experts. Full Scale is an offshore software development company that specializes in helping startups.
We can provide the talent and resources needed to begin your operations. Whether you need project managers, marketing specialists, or technical experts; we’ve got them all. We’ll take care of all the processes of recruitment and management so you can focus on your core competencies.
Ready to begin your entrepreneurial journey? Get your FREE consultation today!
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Step-by-Step Guide to Writing a Simple Business Plan
By Joe Weller | October 11, 2021
A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice.
Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .
What Is a Business Plan?
A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.
A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:
- Product goals and deadlines for each month
- Monthly financials for the first two years
- Profit and loss statements for the first three to five years
- Balance sheet projections for the first three to five years
Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.
While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.
For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .
Business Plan Steps
The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:
- Executive summary
- Description of business
- Market analysis
- Competitive analysis
- Description of organizational management
- Description of product or services
- Marketing plan
- Sales strategy
- Funding details (or request for funding)
- Financial projections
If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.
Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.
Do I Need a Simple or Detailed Plan?
Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.
How to Choose the Right Plan for Your Business
In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.
Use the chart below as a guide for what type of business plan to create:
Is the Order of Your Business Plan Important?
There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.
The Difference Between Traditional and Lean Business Plans
A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.
In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.
How to Write a Business Plan Step by Step
Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.
Step 1: Executive Summary
The executive summary will always be the first section of your business plan. The goal is to answer the following questions:
- What is the vision and mission of the company?
- What are the company’s short- and long-term goals?
See our roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.
Step 2: Description of Business
The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:
- What business are we in?
- What does our business do?
Step 3: Market Analysis
In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:
- Who is our customer?
- What does that customer value?
Step 4: Competitive Analysis
In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:
- Who is the competition?
- What do they do best?
- What is our unique value proposition?
Step 5: Description of Organizational Management
In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.
Step 6: Description of Products or Services
In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.
Questions to answer in this section are as follows:
- What is the product or service?
- How do we produce it, and what resources are necessary for production?
Step 7: Marketing Plan
In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:
- Who is the target market (if different from existing customer base)?
- What channels will you use to reach your target market?
- What resources does your marketing strategy require, and do you have access to them?
- If possible, do you have a rough estimate of timeline and budget?
- How will you measure success?
Step 8: Sales Plan
Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts.
Start by answering the following questions:
- What is the sales strategy?
- What are the tools and tactics you will use to achieve your goals?
- What are the potential obstacles, and how will you overcome them?
- What is the timeline for sales and turning a profit?
- What are the metrics of success?
Step 9: Funding Details (or Request for Funding)
This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:
- How much capital do you currently have? How much capital do you need?
- How will you grow the team (onboarding, team structure, training and development)?
- What are your physical needs and constraints (space, equipment, etc.)?
Step 10: Financial Projections
Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years.
While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:
- How and when will the company first generate a profit?
- How will the company maintain profit thereafter?
Business Plan Template
Download Business Plan Template
Microsoft Excel | Smartsheet
This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.
For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy.
If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.
How to Write a Simple Business Plan
A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.
Below are the steps for creating a generic simple business plan, which are reflected in the template below .
- Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company.
- Add a Company Overview Document the larger company mission and vision.
- Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
- Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
- Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
- Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
- Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
- Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
- Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting.
- Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.
Simple Business Plan Template
Download Simple Business Plan Template
Microsoft Excel | Microsoft Word | Adobe PDF | Smartsheet
Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.
Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates .
How to Write a Business Plan for a Lean Startup
A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.
While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:
- Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
- List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
- Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
- Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
- Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.).
- Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
- Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
- Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.
Lean Business Plan Template for Startups
Download Lean Business Plan Template for Startups
Microsoft Word | Adobe PDF
Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.
See our wide variety of startup business plan templates for more options.
How to Write a Business Plan for a Loan
A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.
In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.
Download free financial templates to support your business plan.
Tips for Writing a Business Plan
Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.
- Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
- Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
- Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
- Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
- Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”
Outside of these more practical tips, the language you use is also important and may make or break your business plan.
Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.
“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”
Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”
Resources for Writing a Business Plan
While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.
Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.
How a Business Plan Helps to Grow Your Business
A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships.
Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.
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Business Plan: What It Is + How to Write One
Discover what a business plan includes and how writing one can foster your business’s development.
What is a business plan?
A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.
In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes.
Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]:
The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors.
The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks.
Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.
How to write a business plan
In the sections below, you’ll build the following components of your business plan:
Products and services
Marketing plan and sales strategies
Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.
Read more: What Is a Marketing Plan? And How to Create One
1. Executive summary
This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan.
2. Business description
Use this section to provide detailed information about your company and how it will operate in the marketplace.
Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers?
Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more.
Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.
Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice.
3. Competitor analysis
This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following:
Value proposition: What outcome or experience does this brand promise?
Products and services: How does each one solve customer pain points and fulfill desires? What are the price points?
Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?
Sales: What sales process or buyer’s journey does this brand lead customers through?
Read more: What Is Competitor Analysis? And How to Conduct One
4. Products and services
Use this section to describe everything your business offers to its target market . For every product and service, list the following:
The value proposition or promise to customers, in terms of how they will experience it
How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives
The features or outcomes that make the product better than those of competitors
Your price points and how these compare to competitors
5. Marketing plan and sales strategies
In this section, you’ll draw from thorough market research to describe your target market and how you will reach them.
Who are your ideal customers?
How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)?
What are their daily lives like?
What problems and challenges do they experience?
What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?
What messaging will present your products as the best on the market? How will you differentiate messaging from competitors?
On what marketing channels will you position your products and services?
How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?
Read more: Market Analysis: What It Is and How to Conduct One
6. Brand strategy
In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience.
What are the values that define your brand?
What visual elements give your brand a distinctive look and feel?
How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices?
How will your brand look and sound throughout the customer journey?
Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand?
Read more: What Is a Brand Strategy? And How to Create One
7. Financial planning
In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].
Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning.
How many individual products or service packages do you plan to sell over a specific time period?
List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.
What is your break-even point, or the amount you have to sell to cover all expenses?
Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast
Quantify how much capital you have on hand.
When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.
Business plan key takeaways and best practices
Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors.
Keep these best practices in mind:
Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.
Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles.
Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success.
Start your business with Coursera
Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization :
1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.
2. Inc. " How to Write the Financial Section of a Business Plan , https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.
This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.
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What to Include in Your Business Plan Here's what your business plan should contain, how long it should be and what it should look like.
By The Staff of Entrepreneur Media, Inc. • Dec 9, 2014
In their book Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors briefly describe just what your business plan should contain, how long it should be and how to know if it's time to write it.
A business plan is a written description of the future of your business. It's a document that tells the story of what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan.
But there are some generally accepted conventions about what a full-blown business plan should include and how it should be presented. A plan should cover all the important matters that will contribute to making your business a success. These include the following:
1. Your basic business concept. This is where you discuss the industry, your business structure, your particular product or service, and how you plan to make your business a success.
2. Your strategy and the specific actions you plan to take to implement it. What goals do you have for your business? When and how will you reach your goals?
3. Your products and services and their competitive advantages. Here's your chance to dazzle the readers with good, solid information about your products or services and why customers will want to purchase your products and services and not those of your competitors.
4. The markets you'll pursue. Now you have to lay out your marketing plan. Who will your customers be? What is your demographic audience? How will you attract and retain enough customers to make a profit? What methods will you use to capture your audience? What sets your business apart from the competition?
5. The background of your management team and key employees. Having information about key personnel is an important but often misrepresented portion of a business plan. It's not a long and detailed biography of each person involved but an accurate account of what they've done and what they bring to the table for this specific business opportunity.
6. Your financing needs. These will be based on your projected financial statements. These statements provide a model of how your ideas about the company, its markets and its strategies will play out.
As you write your business plan, stick to facts instead of feelings, projections instead of hopes, and realistic expectations of profit instead of unrealistic dreams of wealth. Facts—checkable, demonstrable facts—will invest your plan with the most important component of all: credibility.
How long should your plan be?
A useful business plan can be any length, from that scrawl on the back of an envelope to more than 100 pages for an especially detailed plan describing a complex enterprise. A typical business plan runs 15 to 25 pages.
Miniplans of five to 10 pages are the popular concise models that may stand on their own for smaller businesses. Larger businesses seeking major funding will often have miniplans as well, but the full business plan will be waiting in the wings. It's to your advantage to run long when creating your plan, then narrow it down for presentation purposes.
The size of the plan will also depend on the nature of your business and your reason for writing it. If you have a simple concept, you may be able to express it in very few words. On the other hand, if you're proposing a new kind of business or even a new industry, it may require quite a bit of explanation to get the message across.
The purpose of your plan also determines its length. If you're looking for millions of dollars in seed capital to start a risky venture, you'll usually (although not always) have to do a lot of explaining and convincing. If you already have relationships with potential investors, they may simply want a miniplan. If you're just going to use your plan for internal purposes to manage an ongoing business, a much more abbreviated version may suffice.
Many business plan presentations are made with PowerPoint decks, using 10 to 12 slides to tell your story. That's a great starting point, but you should have at least a miniplan available, especially if you're seeking millions of dollars.
When should you write it?
Still not sure if it's time to write a business plan? Here are a few clues that it's time to start writing:
- A business plan is a good way to explore the feasibility of a new business without actually having to start it and run it. A good plan can help you see serious flaws in your business concept. You may uncover tough competition when researching the market section, or you may find that your financial projections simply aren't realistic.
- Any venture that faces major changes (and that means almost all businesses) needs a business plan. If the demographics of your market are rapidly changing, strong new competitive products challenge your profitability, you expect your business to grow or shrink dramatically, or the economic climate is improving or slipping rapidly, you'll need a business plan. This will allow you to make changes accordingly.
- If you're contemplating buying or selling a business, your business plan can provide you with a handy tool to establish a value—and to support that value if challenged.
- You'll need a business plan if you're seeking financing. Your business plan is the backbone of your financing proposal. Bankers, venture capitalists and other financiers rarely provide money without seeing a plan. Less sophisticated investors or friends and family may not require a business plan, but they deserve one. Even if you're funding the business with your own savings, you owe it to yourself to plan how you'll expend the resources you're committing.
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How to Write a Business Plan
When how to write a business plan is at the top of the SBA list of the ten steps in how to start a business, it tells you something about how important the experts consider it to be. Planning a business and writing a business plan is more than just having a location picked and a product or service to sell. Financing, marketing strategy, and future growth all require a well-researched and thought out business plan.
- Chapter 1 – Getting Started
- Chapter 2 – The Key Elements of a Business Plan
- Chapter 3 – Executive Summary
- Chapter 4 – Business Description
- Chapter 5 – Business Environment Analysis
- Chapter 6 – Industry Analysis
- Chapter 7 – Competitive Analysis
- Chapter 8 – Market Analysis
- Chapter 9 – Marketing Plan
- Chapter 10 – Operations Plan
- Chapter 11 – Team and Management Plan
- Chapter 12 – Financial Projections
- Chapter 13 – Appendix
There are many articles and resources available on the Internet explaining how to write a business plan, but writing a business plan is more than merely following a business plan template or copying someone’s business plan examples. A business plan can be as simple as a few notes scrawled on a paper napkin. It can be a 40-page document with multiple sections and subsections describing every minute detail of its operations, products, and finances.
Writing an effective business plan is easier if you take time before starting the writing process to conduct your research and gather the information you need to incorporate into it. Business owners of new startups or established companies can benefit from thinking through and researching such success-determining issues as:
- Marketing strategies
- Regulatory environment
- Capitalization requirements
- Financing opportunities
From this list, you quickly realize that a business plan is more than a document a business uses to get financing or to attract investors. It is a roadmap of how your business will operate to succeed. Before you can begin writing your business planning roadmap, you need reliable information about your industry, your competitors, your product, and your customers for inclusion in it. An industry analysis, competitor analysis, product feature comparison, and market research will give you the information you need.
How to Conduct an Industry Analysis
Understanding the market and industry in which your company will do business is accomplished through industry analysis. An industry analysis conducted before you begin to write a business plan will help you to:
- Recognize and analyze ways of reducing business risks
- Identify industry trends including potential problem areas within the industry
- Project capitalization requirements for your business
- Identify product and service trends and opportunities
Industry analysis is specific to the particular industry in which a business is currently operating or plans to venture. It provides information from which a business owner can create a long-term strategy to minimize risks and take advantage of growth opportunities.
Porter’s Industry Analysis Method
A method developed by Michael E. Porter of Harvard University has become the most frequently used method for analyzing any industry to create a strategy to compete within it. According to Porter, five forces influence all markets and industries.
The five forces are:
- Ease of entry: When new companies can enter an industry with relative ease, those companies already in operation will love their competitive advantage. Profits will suffer unless existing companies have a way to block or slow new entries. Government regulation, customer loyalty, and patents and copyrights can be barriers to new businesses entering a market or industry.
- Power held by suppliers: Suppliers of products, services, or materials that a business needs can affect a company’s ability to compete. If there are few alternative products or only a few vendors offering the materials, the suppliers can dictate prices, quantities, and delivery times to businesses that must purchase from them.
- Power of buyers: Strong customer bargaining power, as in industries where there are many competing products from which a buyer can choose, can affect a company’s ability to price its products without fear of losing customers.
- Availability of substitute products or services: If two companies with similar products compete within an industry, they will each benefit as advertising and marketing by the companies will generally increase customer demand. For example, two businesses selling different house paint brands will mutually benefit as customer demand for their products increases due to the competing marketing campaigns. A company that sells and promotes vinyl siding as a substitute for painted surfaces will reduce the market share’s size for paint.
- Competitive rivalry: This factor in the analysis takes into consideration the number of competitors in an industry and their relative strength. An industry with many companies offering similar products will offer a company little opportunity to control consumers’ or suppliers’ ability from going elsewhere.
Porter believed that an analysis of the five forces that exist in every industry could help forecast a company’s ability to compete and remain profitable. You will obtain sufficient information on your industry from the five forces analysis to formulate long- and short-term strategies to incorporate into your business plan.
A business plan for startup companies will benefit from an industry analysis that provides ownership with information to make decisions and formulate policy in certain key areas. You should be able to answer the following key questions about the industry and your company’s ability to successfully compete in it when you have completed the industry analysis:
- What are the primary economic characteristics of the industry?
- How strong are the competitive forces that exist within the industry?
- What trends or changes can be expected in the industry, and from where will they come?
- What response will competitors make to the entry of a new company into the industry?
- What are the factors that will determine your company’s ability to succeed?
- What are the industry prospects for profitability and potential for growth?
- Will the company compete on a local, national, regional, or international basis?
- What modifications or changes must be done to the company’s products or services to make them competitive in this industry?
Industry Analysis Resources and Tools
There are several free industry analysis resources and tools available to entrepreneurs preparing to write a business plan. A few of the more popular sources of industry information include:
- BizStats (www.bizstats.com): It offers statistics and financial data on businesses in a variety of industries as well as tools to calculate business valuation and cost of goods sold.
- Securities and Exchange Commission (www.sec.gov/edgar.shtml): The SEC makes annual reports and other financial filings of publicly traded companies available for review at its website.
- FreeLunch.com: This site from Moody’s Analytics offers data on economic trends and financial data from around the country.
- Hoover’s Online (www.hoovers.com): This is a Dun & Bradstreet offers a searchable database of financial information and profiles of public and private companies.
- U.S. Census Bureau (www.census.gov): Government agencies can offer a treasure-trove of information. The Census Bureau has searchable databases with industry overviews, economic data by region, and population statistics.
- Thomas Register (www.thomasnet.com): Originally published in book form, the Thomas Register is a searchable database of product information and market trends for various industries. It publishes an annual survey it calls its “Industry Market Barometer” that shows where reporting companies are, where they have been and where they are heading.
- Library of Congress Legislative Information (https://beta.congress.gov/): The primary source for information about recently enacted federal legislation that could affect a business or an entire industry.
- Websites of individual companies or trade associations: Most companies have websites that provide information about the business, including products and management structure. Trade associations usually have websites that offer glimpses into what is happening within an industry from those working in it.
Industry analysis is not to be confused with a market analysis or a competitor analysis, both of which are included in a business plan for entrepreneurs. Industry analysis will describe the products offered within a particular industry and the marketplace parameters concerning economic, regulatory, and political issues. An industry analysis establishes the marketplace’s scope; a market analysis tells a business owner if a particular industry’s market will be profitable for a company’s product.
How to do a Competitor Analysis
Competitor analysis is when a business obtains information to identify and learn more about key competitors to predict how the competition will react. Competitive analysis plays a vital role in strategic planning, so writing a great business plan becomes easier if you do your research before writing your business plan.
Unlike the competitive rivalry factor of industry analysis, a competitor analysis focuses attention on each competitor’s strengths and weaknesses instead of focusing on the overall competitive climate within an industry. A competitor analysis offers a detailed profile of each competitor along with an analysis of marketing strategies that can be used to counter position your company to improve market share or profitability.
At the completion of your competitor analysis, you should be able to:
- Identify your primary competition within your industry and marketplace
- Know the company profile of your competitors
- Identify the geographic location in which competitors operate
- Identify competitor’s market share and profitability
- Know and understand your competition’s strategies and objectives
- Identify benefits, such as increased customer awareness, derived from your competitors’ marketing
- How to identify and understand competitor strategies that are successful and those that are not
- How to anticipate your competition’s response to implementation of your strategies and plans
- Learn how to turn your competition’s anticipated response to your benefit
The following steps will guide you through your competitor analysis:
- Create a list of your current and future competitors
- Gather data and information about your competitors, their products, and their marketing and pricing strategies
- Review and analyze the data
- Create a list of your competitors’ strengths and weaknesses
- Create strategies to take advantage of competitors’ weaknesses while a minimizing threats posed by their strengths
Sources of Competitor Information
Information for competitor analysis is available from several sources, including news stories and press releases, advertising, company websites, promotional campaigns, patent and copyright applications, price lists, and, in the case of publicly traded companies, annual reports, and SEC filings.
Sometimes, getting information about a competitor might require a bit of sleuthing on your part. If your competitor has a store that is open to the public, no rules are prohibiting you from visiting it and taking a look around. Becoming a member of a competitor’s mailing list to receive promotional material and updates on new products and pricing is a quick and easy source of information.
The information gathered about competitors might not seem like much when looked at separately, but it can be mosaic-like in what it reveals about your competition when viewed as a whole. A random conversation with a supplier might reveal information about a change in a competitor’s product line. The point is to take advantage of every opportunity to acquire data about the marketplace in which your business operates. It might reveal something about your competitors that could be used in developing or refining your marketing strategy.
How to do a Product Feature Comparison
A product feature comparison allows you to compare your company’s product with products produced by competitors. Unlike a competitor analysis that allows you to determine how your business measures up to competing businesses, product feature comparisons limit their focus to the products themselves. When used as part of creating an easy business plan, product features comparison data can provide critical information to making marketing decisions.
1. Conducting the Research
The first thing you should do is purchase or acquire your competitor’s product. This gives you the chance to evaluate your competitor’s sales process while acquiring the product to test. Using the product, you can compare features on the competitor’s product with your own product. If the features of the competing product give it a performance advantage over your own, you can evaluate how important those features are to determine if your product should be redesigned. Another source of information on the product is the internet. What are consumers saying about your product versus the product sold by your competitor? Product reviews by websites that specialize in testing products could also tell you how your product is faring in the marketplace compared to other products.
2. Product Comparison Tables
The information you obtained through your research and product testing is easier to compare if compiled in a simple table format. Each product’s features can be listed under separate columns for each feature, and each product feature can be judged to determine which one was the best. The best feature gets one point while the other product’s feature gets no points. The winning product is the one that ends up with the most points.
Another method of evaluating the features of different products is to assign a score of 1 to 10, with a higher score going to features deemed to be the most important as far as product performance. The winning product is the one that ends up with the highest overall score.
3. Coming to a Conclusion
Comparing a competitor’s product features with those of your own product is only useful if you use the information to make worthwhile improvements to your product. Redesigning your product just to make it look more like your competitor’s product only makes sense if the redesign meets a customer need that your product is not currently meeting.
The conclusions you reach from the data a product feature comparison gives can be incorporated into the market analysis, competitive analysis, and marketing plan sections when writing a business plan. The information will also be useful in guiding decisions made for the future development of new products.
How to Conduct Market Research
Market research provides businesses with information about their customers and the markets in which they do business. By analyzing its data, business owners offer products that consumers want at competitive prices with other sellers. For the new entrepreneur who is learning how to start a business, market research performed before preparing a business plan can help formulate strategies to reduce risks, recognize marketplace and industry trends, and identify opportunities to increase sales.
The marketplace for many businesses is no longer limited to one country. The growth of internet commerce has made it possible for even small businesses to participate in the global economy for many products and services. Market research can help owners of businesses to evaluate the feasibility of expansion into international markets.
The data collected through market research should give a business owner the answers to the following questions:
- Who are the customers for a company’s product or service? What factors influence consumers to purchase this product or service?
- What improvements or changes in current products would encourage customers to purchase more of them?
- What price range will cause customers to switch to other competing products?
- What features of a competitor’s product do customers like or dislike?
- What other uses of the product exist that can be introduced into new markets?
- Marketing research allows you to compile a profile of your current or potential customers to provide answers to the following questions:
- How old are they?
- Where do they live?
- What is their highest level of education?
- How large is the customer base?
- What are their favorite leisure time activities
- What do they do for a living?
- How much do they earn?
- Where are they employed?
- What technology do they use and prefer?
- What are their beliefs, values or opinions?
- Where do they prefer to shop?
- For whom do they shop?
Market Research Tools
The methods of gathering information about consumers do not have to be complicated. Frequently used methods include: Interviews by telephone or face-to-face Surveys are conducted online, by telephone, or through the mail. Questionnaires are completed online, in person, or through the mail. Focus groups to solicit feedback from people representing a cross-section of potential customers
Steps in Market Research
Any of the tools used to gather information can be employed using a five-step approach.
- Step 1: Identify what you want to learn or find out. Be specific about what you want to learn. Working on a single issue or question is easier than trying to create a survey or interview covering a wide variety of topics. For example, if your company is attempting to develop a new and improved widget to replace widgets currently being sold, you might focus your research on customer experiences with the old widget. Are they satisfied with how it performs? Do they believe there is a need for a new and improved model? Would they buy a new and improved model? How much are they willing to pay?
- Step 2: Draft questions to allow for follow-up questions depending upon the answer given.
- Step 3: Identify the target group for your research. Interviewing people who have never used your product will not generate data to determine how your product users react to its design changes.
- Step 4: Select the most effective tool for obtaining the information you need. If your company is in the telecommunications industry, surveying by telephone might be more effective than one conducted through the mail.
- Step 5: Analyze the results of your research. Market research data is only as good as the use to which you can put it. Go back and review the purpose of your research. Determine if the data you gathered allows you to answer the question or solve the problem. If it does, develop a strategy and implement it. If it does not, then decide what additional data you need and return to step 1.
The Key Elements in Writing a Business Plan
The answer to the question “How do you write a business plan?” depends upon the type of business and the purpose for which you are going to use it. Too many business owners think of a business plan as they need to convince a bank to lend their company a loan or convince a venture capitalist to invest in it.
In fact, business plans come in all shapes and sizes, depending upon the audience for which the plan is intended. For example, a startup company would want a business plan containing all of the bells and whistles to serve as a comprehensive guide for the new owners and management. Should the time come when financing is needed for new equipment or expansion, a revised business plan that focuses on the company’s financial growth and ability to repay, the debt would be needed.
Business plans are written with an audience in mind. Internal business plans are written for a company’s management team to use as an operational guide. It can also be written with a specific project in mind to allow owners and managers to evaluate its feasibility and profitability. These types of plans might include projections about profitability and growth ten or more years into the future.
External plans are written for the benefit of an audience located outside of the company. Prospective investors or venture capitalists and lending institutions are examples of the types of audiences for which external business plans are created. These types of plans are created to answer a question or address a particular problem. For instance, prospective investors want a business plan that demonstrates their future growth and profitability to generate a return on their capital investment.
Too many businesses start with inadequate planning. No one goes into business to lose money. If you start a business, you expect that it will be profitable and succeed. Writing a business plan forces you to focus on the strategies that will make your business a successful one. That is why learning how to write a plan is important for new businesses or established businesses that might be venturing into new markets or launching new products.
Business plans come in all shapes and sizes, so what you choose to include in your business plan will depend upon your audience, the question it seeks to answer or the problem it seeks to resolve, and your personal preferences. The most frequently included elements of a business plan are the following:
- Executive summary
- Business description
- Business environment analysis
- Industry analysis
- Competitive analysis
- Market analysis
- Marketing plan
- Operations plan
- Team and management plan
- Financial projections
The Executive Summary
Regardless of the business plan format chosen, the executive summary always appears first in the document. Its purpose is to educate and inform the reader about the company. It should explain where the company is at present, where it is going, and how it plans to succeed. In a plan prepared for an external audience, such as investors or bankers, the executive summary is the first opportunity the business owner has to engage the reader’s interest.
Even though it appears first in a business plan, the executive summary should be written last. The executive summary is a snapshot of your business plan that a reader can quickly look at to become acquainted with your business. Writing it last allows you to highlight your plan’s strengths in the first section your audience reads.
Your executive summary should include the following information
- Mission Statement: This explains to the reader why your company exists. Its mission statement should guide the activities of your company.
- Company Information: This is a brief statement giving a historical perspective of your company. It should include the date of formation, locations, company founders, and current employees.
- Highlights: This is an opportunity to tell the reader about profit or market milestones achieved by the company since its inception.
- Products and Services: Briefly mention and describe the company’s products or services.
- Financial Information: This section is particularly important for companies seeking financing and should include mention of bank references and investors.
- Future Projections: Explain the direction in which ownership and management plan to take the business.
Remember that even though it might be the last thing you write for your business plan, the executive summary is the first thing people will read. You have to grab the reader’s attention and hold it. Think of the executive summary as a highlight reel showcasing your business. One of the reasons for saving the executive summary until last to write is to give you the chance to include the best parts from each of the sections of your business plan in it.
Write the executive summary with a particular audience in mind. If you are trying to attract investors, you should focus on those sections of your business plan that establish how your company’s product fills a consumer need. Reference the market research and marketing strategies that demonstrate how your company will take advantage of this.
After completing the executive summary, read it aloud. It should convey your intended message is clear, unequivocal terms that flow without sounding like a sales pitch.
A business description tells the reader more than simply, “We sell things.” This section of the business plan is an overview of the company, including its legal structure, its owners and management, a brief company history, information about the products or services it offers, markets the company will serve and other information to demonstrate how the company plans to introduce its product into the marketplace.
The purpose of the business description is to help a reader to quickly grasp the goals the company has set and how it intends to meet those goals. By the time people are finished reading, they should have a clear picture of the nature of the company’s business, its business structure, its goals and objectives, and its strengths and advantages.
Begin the description with a few sentences that give a capsule view of the company, its product, and its position in the industry in which it competes. This is an elevator pitch to get the reader interested in learning more about the company. Let the reader know if this is a new venture or a business for a while.
The business description should continue with a statement about the type of business structure adopted by the company. Explain whether it is a corporation, partnership, sole proprietorship, or limited liability company, and list the principals’ names along with brief profiles for each one showing how their presence benefits the company.
Part of the business’s description should include information about the company’s products and services, the potential customers, supply and distribution channels, competitive advantages offered by product features, and how the company plans to exploit those advantages. End the business description by explaining the specifics of how the company plans to be profitable.
The business description section of a business plan should not be overly long. Depending upon the company’s size and the number of products offered by it, a description that is one to two pages in length should suffice.
Business Environment Analysis
Business planning is an ongoing process that does not begin and end with writing a business plan. Periodically taking stock of how a company is doing is essential to ensuring that it meets its goals and will become or continue to be successful and profitable. A business plan should be flexible by incorporating tools to analyze company performance compared to other industry businesses.
A business environmental analysis accomplishes section accomplishes this by providing useful information to management and company owners. Analyzing this data allows the management team to identify those plans and strategies that are not.
The environment in which a company operates involves internal and external factors that influence how business is conducted. Internal factors include a company’s business culture, its organizational structure, and the methods by which it is managed. External environmental factors might include government activities such as laws and regulatory actions, economic changes such as recessions, social trends and movements that shift consumer preferences, and innovations in technology that can help or damage a business’s profitability and productivity.
A systematic process of analyzing the environment to identify those environmental factors affecting a company determines its impact on the business and developing strategies to take advantage of them or limit their effects. After a business has implemented a strategy, the process will monitor the business environment to ensure that it is working and does not require modification or change.
Business plan tools that give management a constant source of current and accurate information about the marketplace and the industry and competitive forces at work in both are essential to an effective analysis of the business environment. Three of those tools are the industry analysis, the competitor analysis, and the market analysis that should be included when writing a business plan.
The industry analysis you performed before sitting down to write your business plan can be incorporated into it to provide data on the industry and markets in which your company conducts business. Drawing upon the data you collected using the various industry analysis resources mentioned earlier allows you to identify the risks and opportunities confronting the company as it prepares to enter the marketplace with its products or services. This information permits you to develop strategies to take full advantage of business opportunities while minimizing or avoiding the identified risks.
When written as a section of a company’s business plan, an industry analysis can be presented as a five-step process.
- Step 1: Give a brief overview of the industry. Define the industry in terms of historical background, the geographic area it services, and its products.
- Step 2: Review trends and growth patterns that have existed within the industry.
- Step 3: Identify factors that influence the industry. These might include government regulatory policies and competitive practices of other businesses.
- Step 4: Using data gathered through research, the industry forecast anticipated growth. The predictions should be both long- and short-term.
- Step 5: Describe how your company will position itself within the industry. Focus on how your company can take advantage of opportunities identified within the industry.
You want your business plan to tell you how your company compares to others in the industry. It is difficult to predict how your company’s product or service will perform in the marketplace without knowing what your competitors are doing. A competitive analysis section draws upon the research you did before writing your business plan to offer the data and analysis to support your performance assumptions.
Writing an effective competitive analysis can be accomplished in five steps. Keep in mind that the data you will need about your competitors should have been gathered earlier when you conducted the industry analysis before starting work on creating your business plan.
- Step 1: Identify and list your competitors. You can do this in paragraph format or a spreadsheet. You should include each competitor’s name and location along with the products they offer, sales volume, market share, pricing information, marketing strategy, and other details of their business.
- Step 2: List your competitors’ strengths and weaknesses.
- Step 3: Analyze the strengths and weaknesses of your company. Focus on how your company can exploit its strengths while overcoming or minimizing identifiable weaknesses.
- Step 4: Describe your company’s role in the marketplace. Explain how your company can compete for a market share, given the information you acquired about your competitors. This is where you support marketing decisions and strategies with the data you previously gathered through your marketing research, product feature comparison, competitive analysis, and industry analysis.
- Step 5: Give a detailed description of your company. Use this opportunity to describe how ownership, management, location, business structure, and other resources possessed by your company will allow it to succeed in the marketplace.
You should use this section of your business plan to describe the market into which you intend to introduce your company’s products or services. This is where you draw from the data you collected earlier when you did your preliminary market analysis before getting to work on preparing your company’s plan.
Ideally, the market analysis should offer an overview of the marketplace, the positions held by your competitors, and other facts to support your company’s strategies about marketing, production, and distribution.
Some of the key topics that should be addressed in this section include:
- A description of the industry and the market. This should include information about projected growth, potential changes in consumer demand, and anticipated trends or cycles that could affect product performance.
- Describe your customers. Describe the customer need that the product or service satisfies. Provide demographics about your customers and show how the product your company offers falls within those demographics.
- How big is the market? If your market research shows that the market has been shrinking, a decision to enter or continue in the market should be supported by research supporting a prediction for future growth.
- Describe and explain the pricing structures of your company and its competitors. Describe how your marketing and pricing will give your company an advantage in the market, or describe what changes must be made to give your company an edge.
- The data collected in the competitive analysis can be incorporated into the market analysis to show how your company will compete with other companies offering the same or similar products or services.
The purpose of a company’s marketing plan is to attract customers willing to purchase a particular product or product line. Creating a market for the product or service your company offers began with the business environment analysis and continues by developing a marketing strategy. A marketing strategy must be flexible and should be evaluated periodically to determine if it must be reworked due to changes in the marketplace.
Marketing plans frequently include strategies for four stages.
- Penetration strategies represent the company’s plans for its initial entry into the market.
- Growth strategy builds upon a product’s success by introducing it to different users or into new markets.
- Another strategy analyzes new or alternative methods of distributing a company’s product to increase sales, such as hiring salespeople or developing new retail outlets.
- The fourth strategy controls the communications process between the company and its customers. Methods of advertising and audiences to be targeted are just two of the issues that a communications strategy should address.
The strategies created by a company under its marketing plan are affected by or affect other aspects of the business plan. For instance, a business’s decision to expand into new markets by acquiring a company already selling in the new market might be hampered by a lack of capital to complete the transaction. It might force the company to seek additional capital by adding investors or borrowing money.
The operations plan is closely tied to the team and management plan section of a business plan. An operations plan is the engine that runs the machine you call a business. Without an operations plan, nothing else in your business plan will get done. The operations section of a business plan created to obtain bank financing or some other external purpose does not require the details to go into a plan that will guide ownership and management in running the business.
This section should be crammed with details and instructions to direct people within the business’s day-to-day operations. The personnel covered in the team and management plan section of a business plan should refer to the operations plan to carry out the strategies and tasks needed to run the business.
An effective way of including an operations plan when writing a business plan is to combine it into a single section entitled “Operations and Management Plan.” Writing the section begins with creating an organization chart showing each business member’s title, duties and responsibilities, and supervisory role.
Team and Management Plan
The people who make up your ownership and management team focus on the team and management portion of a business plan for entrepreneurs. Whether intended for internal or external use, readers of this section of a business plan should have a clear understanding of who is in charge. The length and complexity of this section will depend upon the size of the company. The business plan written by a sole proprietor will be much shorter than one prepared for a corporation with multiple management teams, a board of directors, and multiple locations.
The team and management section includes a list of owners and key management personnel and a description of the role each plays in running the organization, the compensation and benefits each one receives, and the criteria used for giving promotions and increasing compensation. Brief biographical information for each of the owners, key personnel, and members of the board of directors offers readers insight into the qualifications each person brings to the organization.
Other information about the company that should be included in this section includes:
- Business structure
- Length of time business has existed
- Mission statement and values
- Background and history of the company
This section of the business plan provides readers with a picture of where your company has been and where it is going from its finances. Established companies should include financial data on past performance. Banks, venture capitalists, and other lenders usually want at least three years of financial data, but some might want to see up to five years of information.
Financial data that should be included in the plan include income and cash flow statements and balance sheets. Some lenders might ask to include accounts receivable statements, accounts payable statements, and documentation of other company debt obligations.
Regardless of how long a company has been in existence, this section must include projections of its future financial picture. These projections must be supported by data the company has compiled through its research and analysis of the industry, competitors, markets, and products.
Financial forecasts should include the following documents:
- Statements of projected income
- Balance sheets
- Cash flow statements
- Capital expenditure budgets
Assumptions that a company makes about future market trends or other factors that could influence the financial projections should be explained. People outside of a company want to see that financial projections in a business plan are supported by accurate data or an analysis based on assumptions having a historical basis.
Financial projections can be supported by graphs, charts, credit history, order history, reference letters, or anything that a business believes will lend credibility and support the plan’s predictions. Such items might work best if they are included in the appendix section of the plan.
The information supporting projections, strategies, and assumptions made in a business plan will be found within the body of each section of it. An appendix usually contains financial information to which company owners and managers might want to limit access. For example, a company that prepares a plan specifically to obtain lender financing could use the appendix to submit tax returns, credit histories, and confidential data such as customer information only to those lenders requesting it. It can also be used for supporting reports, photographs, and other information that takes up more than a couple of pages.
An appendix should begin with a table of contents corresponding to the organization of the business plan sections. Even if it only contains information on some but not all sections of the plan, the appendix should always be located after its last section.
Resources on How to Write a Business Plan:
Business plan examples.
http://www.bplans.com/sample_business_plans.php http://www.score.org/resources/business-planning-financial-statements-template-gallery http://www.businessplans.org/businessplans.html http://www.businessballs.com/freebusinessplansandmarketingtemplates.htm http://www.businessplanarchive.org/
Business Plan Writing Resources
http://www.carnegielibrary.org/research/business/bplansindex.html http://www.hbs.edu/entrepreneurship/resources/businessplan.html http://www.entrepreneur.com/businessplan/index.html http://www.sbdcnet.org/small-business-information-center/business-plans http://www.inc.com/business-plans https://www.sequoiacap.com/grove/posts/6bzx/writing-a-business-plan http://www.sba.gov/tools/business-plan/1 https://business.usa.gov/start-a-business http://www.startupconnection.net/premium-resources/business-plan-disconnect/
Article References on How to Write a Business Plan:
- William A Sahlman. How to Write a Great Business Plan. Harvard Business Press Books 2008. ISBN-1422121429
- Bruce R. Barringer. Preparing Effective Business Plans: An Entrepreneurial Approach. Prentice Hall 2008. ISBN-0132318326
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9 Essential Sections You Can Include in a Business Plan
As an entrepreneur, your business plan is one of your most important documents. Your plan is the best way to share your goals and secure financing. A well-written plan shares your story, drive, passion, and tells the world that you are serious and committed to making your dream real. So what should you include in your business plan to highlight this?
In your plan, you share your business concept, what you plan to do with your business, and how you intend to execute your idea and achieve your goals. Your business plan is a written document and management tool that outlines the details of your company.
What to include in a business plan
A business plan is the story of your company split up into key sections. These include but are not limited to:
- Cover Page – Include your company name, a logo, title of the document, contact information and a confidentiality disclaimer.
- Executive Summary – Just as it sounds, you’ll write a summary that covers everything in your business plan. I suggest waiting until you write every part of your business plan before you write this one. It will be easier to do later. Although you will want your executive summary to be the first thing people read in your business plan. Often readers won’t get past this part, so it’s important your key details are here to snag their attention and keep them reading further.
- Business Overview – Introduce the key parts of your business, including a description of your company, your place in the market, your product and your strategic objectives.
- The Market – Who are you selling to? Break down your market and ideal customers here.
- Marketing & Sales Plan – Create a plan that covers your product, price, place and promotion strategy so you can effectively reach and sell to your chosen market.
- Operations Plan – Outline how your business will operate on a daily basis, from location, to inventory, to customer service. Include key operating systems .
- Management Plan – Who is part of your team? Describe your existing and projected team members. Include an org chart if you have one, if you don’t I suggest making one.
- Financial Plan – Prove your business will be profitable by projecting your company finances for the next 3-5 years. Find out where you can get funding and list those options here.
- Action Plan – How do you plan to meet your objectives? How will you put your business plan into action? You’ll explain that in this section.
Taking your great business idea and putting it onto paper is no easy task. It’s one thing to document your idea, and another to do the research, analysis, writing and presentation to create a comprehensive, neat package you can use to easily sell your idea to investors, funders, employees or potential customers.
Take your time really giving each section the detail and attention it deserves. If you need any assistance with your business plan, we are here to help. Reach out any time .
Until next time, enjoy your Entrepreneurial Journey
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No matter what type of business your plan is for, there are certain universal parts that must be included.
If you’re considering starting a business, one of the first things you’ll need to do is develop a business plan. However, business plans come in various flavors. There’s the plan you develop to prove to yourself and others that your great idea can actually make money. There’s the plan the bank wants to see if they are going to consider lending you money (even if you provide collateral). And there’s the plan you need if you are seeking outside investors (9.8 out of 10.0 degree of difficulty if this is your first start-up.).
No matter what type of business your plan is for, there are certain parts of a business plan that must be included (or followed), according to business plan expert, Tim Berry , founder of Palo Alto Sofware, author of The Lean Business Plan and creator of LivePlan . Here are his four must-haves:
1 | Projections are not important for their actual numbers as much as for their presentation of drivers, relationships between growth and spending, key spending priorities, sales aspirations, and assumptions related to cash flow. They have to be solid and integrated, but accuracy is much more a matter of transparent assumptions than accurately predicting the future.
2 | All business plans should include these components.
- Essential numbers
- Projected sales
- Direct costs
3 | All business plans should provide the ability to measure accountability and track results .
4 | All business plans should be reviewed and revised at least monthly .
The review should look for assumptions that need to be changed. The review should analyze the projected results vs. actual results. Revisions should be based on the variation between the two.
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How to Write a Company Overview for a Business Plan
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When you start a company, you ideally want it to grow. If you’re seeking business funding to scale your business or an initial investment to get your business off the ground, you’re going to need a business plan . Putting together a business plan can be an intimidating process that involves a lot of steps and writing — but breaking it down piece by piece can help you accomplish this seemingly insurmountable task.
One small piece of your business plan is the company overview, so let’s take a look at what that is, exactly, check out some company overview examples and go over how to make a company overview of your very own.
What is a company overview?
A company overview provides the reader of your business plan with basic background information about your company so they have an understanding of what you do, who the management team is and what customers your business serves.
The company description is the second piece of a business plan, falling right after the executive summary. Similar to the executive summary, your company overview will be short and succinct. Your reader needs to have a grasp on what your business does and who your customers are, even if they have limited time.
Why do I need a company overview?
The company overview is the part of your business plan that gives the basics and background of your business. It’s the foundation on which you will build the rest of your business plan.
If you’re looking to appeal to investors or potential clients, you need a reader to make an informed decision about your company. Before they can do that, they must know what your company does and who your customer is. Lenders in particular need a reason to keep reading, since they see tons of business plans regularly. The company overview provides those answers, and it will help you get a better sense of your business so you can firm up things like your marketing plan.
What should i include in a company overview.
The exact elements that you need in your company overview will depend upon what details of your business are important, but there are some foundational elements that will be included in every company overview.
Once you’ve covered the basics, you can include any other minor details that will benefit a reader who will need to make an informed decision about your business.
Basic company information
Consider the company overview like an introduction for your business. In the opening paragraph of your company overview, you’ll want to include basic company information. That includes:
Your company name: This should be the official name of your business, exactly as it is written when you registered your business with the state.
Business structure: Your reader will want to know what business entity your company comes in: sole proprietorship, LLC, partnership or corporation.
Location(s): Share where your business is headquartered and other locations the business owns.
Ownership and management team
Break down who owns your business and how each owner is involved with the business. What shares of the company belong to whom? If you have a highly involved management team, share their names and key roles with the company as well.
Part of what makes your company unique is its history. And, even startups have some history. Don’t put too much focus on this section, but do add some personality and interesting details if possible, especially if they relate to your company culture.
Your company’s mission statement should be included in the company overview. If you don’t yet have a company mission statement, that’s okay. Think of a mission statement as the purpose of your company.
If you don’t have one, you can create one with your team. Or you can simply replace the mission statement with a problem statement. Your business idea should exist to solve a problem or pain point faced by your customers. Share what that problem is and what your business does to solve it. That’s essentially your mission statement.
Product/service and customer
This section of the company overview is where you can share the nitty-gritty details of your business. Talk about what product or service you provide and to whom you provide it. You can share some numbers here, but in general, save the numbers for later in your business plan.
The company overview should give the reader a general understanding of your business, your product or service, and your customer. If they’re interested to know more, they’ll reach out to you for a meeting or take the time to read the rest of your business plan. Keep it simple and straightforward here.
While concrete details and facts about your business are important to whoever is reading your company overview, it’s also important to share your dreams and your vision. If you’re writing a business plan for a business that’s already in place, it’s very likely you’re looking for business financing to scale or solve a business problem. If you’re just starting out, though, then it’s likely you’re hoping to find startup funding.
The section on your future business goals should include a brief description of your growth goals for your business. Where you are now tells the reader a lot, but they also want to know where you plan to go.
A company overview is comprised of many small parts. Each part shares just a little bit more about your company with your reader.
Tips for writing a company overview
While a company overview is simply the details of your company written out, it might not be easy to write. Break it down into small steps and use these tips to make putting together your company overview just a little bit easier.
Start with the elevator pitch
If your business is already in operation, then you likely have an elevator pitch. Your company overview can start off with your elevator pitch.
The first paragraph of your company overview should include just a few sentences that explain your business and what you do. The shorter and clearer this is, the more likely your reader will understand and keep reading.
Stick to the basics
It’s tempting to pile on all the details when you’re writing a company overview. Remember, many of the details of your company, including the numbers, will be included in later sections of your business plan.
Your company overview should include only the most basic details about your company that the reader needs to know.
When you share the history, mission statement, and vision for the future of your company, it’s okay to show your passion. You wouldn’t be in business if you didn’t love what you do.
Your excitement for your business could spark interest for the reader and keep them engaged with your company overview and business plan.
Keep it succinct
When you’re passionate about something, it’s easy to get carried away. Remember that you’ve got plenty of space for details in your business plan. The company overview should be just the most basic information someone needs to understand your business.
It’s OK if your first draft of your company overview is long. Simply go through and edit it to be shorter, removing unnecessary details and words each time you read through it. Clear, concise descriptions are more likely to be read and to keep the reader reading to other sections of your business plan.
Your company overview is just one piece of a multi-tiered business plan. Creating a clear structure for your business plan makes it easier to read. The same is true for your company overview.
Your business plan should have chapters, one of which is the company overview. Then, you can further break down the content for easy skimming and reading by adding sub-chapters. You can denote these breaks in content with bold headers.
While you can break down each section of the company overview with bold headers based on the above suggestions, you can also interweave some information together, such as the company structure and leadership structure. Each section should be only a few sentences long.
Write it later
If you’re struggling to write your company overview, come back to it. Write the rest of your business plan first and then write your company overview.
While this might seem like the opposite way of doing things, knowing what will be contained in the rest of your business plan can help you to focus in on the very most essential details in the company overview and to leave everything else out.
Get a test reader
If you’re struggling to edit down your company overview, get a test reader. Ideally, you’ll want to ask someone who doesn’t know a lot about your business. They’ll help you understand whether or not you’ve clearly communicated your message.
Proofreading is the final step in editing something you’ve written. This type of editing looks for typos, misspellings and grammatical errors that have been missed. Many of these small errors can be difficult to spot in our own writing, so be sure to ask someone who hasn’t seen multiple drafts of your company overview.
Company overview examples
If you don’t want to shell out for business planning software, but would still like some company overview examples to get you started, there are many places online you can look to for help getting started, like the Small Business Administration and SCORE.
Many successful companies also have some version of their company overview made public as their company profile page online. There are some variations from the company overview steps we’ve listed above, of course, but you can use the language and style of these company overview examples for inspiration:
Starbucks company profile .
Puma company page .
TaskRabbit About page .
Peloton company page .
Nestlé About page .
If you’re still feeling stuck, or want more company overview examples, try searching the websites of your favorite companies for more information. You might be surprised what you find — the Nestlé page, for example, has more information about their strategy and business principles.
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6 essential elements of a good business plan
Entrepreneurs, executives and venture capitalists discuss how to craft a business plan that will impress investors and be a good road map for your company.
Whether you are just starting out and need startup investment or are looking to expand your business and raise capital, a business plan is a must. Indeed, a business plan is not only essential if you want to get people to invest in your idea, it can help you articulate what it is you hope to accomplish with your business – your mission, goal(s) and values – and plot the company’s growth trajectory.
However, to be successful, a business plan cannot just be a bulleted list of an entrepreneur’s thoughts and musings, hopes and dreams. It needs to be a serious business document with the following six elements.
1. Executive summary
“An executive summary is the ‘elevator pitch’ of your business plan,” explains David Mercer, founder, SME Pals , a blog dedicated to helping entrepreneurs. “More often than not, landing a new investor relies on hooking them with a great elevator pitch. Without grabbing their attention, your business plan, no matter how well researched and presented, may not stand out enough.”
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The executive summary should, in brief, describe the “problem you are going to solve, and why that problem needs to be solved right now,” by you, says Peter Arvai, CEO, Prezi presentation software. “If you aren’t able to communicate that deeper purpose to others, you will have a very hard time convincing investors to fund your idea and people to join your team.”
Tip: Write the Executive Summary last, after you’ve done all your research and put everything down on paper.
[ Related: 12 tips for creating a must-read business blog ]
2. Description and bios of your leadership/executive team
“The entrepreneur should clearly demonstrate what they are bringing to this venture – the idea, the technical ability or the passion,” says Hossein Rahnama, founder & CEO, Flybits . “Investors want to understand how you will execute using your personal strength.”
You should also “talk about the leadership team,” says Andrew Witkin, CEO, StickerYou . “If the leadership team has a previous track record of building and delivering businesses, this should be highlighted. Business plans serve multiple purposes, but one of them is to build trust, and the team is as important as the product to potential investors and partners.”
“Investors bet on jockeys, not horses, and knowing about who will execute on an idea is key to an investor making an investment decision,” says Richard J. Foster, president, Foster Management & Holdings. “Very frequently I’ll see multiple companies with the same idea, but the one to invest in is the one with the team who has the experience and the credentials to succeed. Having the best idea with the wrong team is a recipe for failure, but proving that your team is the [right] one to execute [your idea] can make all of the difference.”
3. Description of your product(s) or service(s)
“When developing a business plan, it’s crucial to clearly [explain] the need your product or service is trying to address,” says Elena Filimonova, senior vice president, global marketing and strategy, CGS . “Your business plan should highlight how the product or service will address the need, what is unique about your offering and why it would be difficult to replicate. To do this, you should outline key differentiators, features and why the product or service is something that stands out in the market.”
[ Related: 11 ways to build your online brand ]
4. Market/competitive analysis
“Every business plan should have a section that defines the target sales market – who you are selling to,” says Victor Clarke, owner, Clarke Inc. “This is the part that requires considerable research into areas such as industry sales data related to the service or product you are selling and trends within the industry. You should look at competitors and see who they are targeting, look at your current customer base and create a profile of an ideal customer or client for your product.”
“For a business plan to be effective and attractive to investors and partners, you must be able to provide tangible data and information that supports the notion that your demographic is strong and growing, and that market trends support the continued need for your service or product offering,” says Brock Murray, cofounder & COO, seoplus+ .
[ Related: 7 attributes of a successful CMO in the digital age ]
“Sequoia Capital has a great framework that every business plan should use: separate your Total Addressable Market (everyone who conceivably needs your product category), Serviceable Addressable Market (everyone who needs your specific product or service, limited by factors like where you can do business) and Serviceable Obtainable Market (the portion of the market you can realistically capture),” says Christopher S. Penn, vice president, Marketing Technology, SHIFT Communications . “For example, lots of companies say everyone is a customer, and while that may be a TAM, if the company has only one salesperson, their SOM is significantly smaller. VCs and investors especially want to understand what’s realistically obtainable, and splitting out your addressable markets… shows them you’re not just presenting pipe dreams.”
Also be sure to “include a competitive analysis section,” says Bryan Robertson, founder & chief revenue officer, Mindyra . “Every business has competition, so it’s a good idea to research companies in your industry who are fighting for the same customers. You should include specific details about their strengths and weaknesses. This forces you to become very familiar with your market. It also encourages you to think of ways to differentiate your business [from] the competition.”
5. Financials (how much cash you need and when you’ll pay it back)
“Make sure that the plan goes into exacting detail about how much startup capital will be needed, where it will come from and how it will be paid back,” says Bruce Stetar, executive director, Graduate Business Programs, SNHU . “Equal importance should be given to how you [plan to] pay back capital as how you acquire it. Investors want to know when they will see a return. Failing to plan adequately for capital acquisition and payback is one of the chief reasons that new businesses fail.”
“Whether you’re hoping to receive funding to build a brick-and-mortar shop or a technology venture, you must have your numbers straight,” says Erica Swallow, founder & CEO, Southern Swallow . “For tech entrepreneurs, I’m a big fan of the startup financial model template developed by startup investor David Teten, in collaboration with a couple of colleagues. Based in a nearly fully-automated Excel worksheet, it enables early-stage entrepreneurs to map out their financial plan, without being too overwhelming. It’s the best startup financial model I’ve encountered over the past five years.”
6. Marketing plan
“It is critical to have a plan [for] how you are going to spend your marketing budget,” says Deborah Sweeney, CEO, MyCorporation . “Assess different options (paid search, salespeople, flyers, [social media], etc.) and the associated ROI with each.”
“The plan should cover both sales and advertising strategies and costs,” says Stetar, as well as customer acquisition costs. “Be conservative here since you will look good if your over achieve but it will cost you investor confidence if you under achieve.”
A successful business plan is one is easy to read and follow
You need to make your business plan easy to read and follow. “There’s nothing more daunting than to receive an all-text business plan, 30 pages in length,” says Swallow. “Keep your potential investors engaged by including product and user photos, team headshots, colorful headings, financial graphs, charts, tables, anything to make reading more of a pleasure. Even bullet points help.”
Indeed, “don’t underestimate the importance of visuals,” says Arvai. “Researchers have found that presentations using visual aids are, on average, 43 percent more persuasive than those without.”
Finally, before you go public with your plan, “have trusted mentors and expert peers look over it [and give you] their feedback,” says Sam Lundin, CEO, Vimbly . “Having [someone] review your business plan [before you present it to investors] is crucial.”
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What should be included in a business plan? 9 essential elements of an executive summary
- Blog , Launch your startup
Some specialists think that startup founders shouldn’t worry about creating a business plan. Why? Such a plan can age quite quickly, nobody has time to read it, and it’s time-consuming to prepare it. However, it is sometimes necessary for a startup to have such a document. How to prepare a business plan? Why create it? Read on to find out more.
What should be included in a business plan? – table of contents:
Executive summary, how to write an effective executive summary, business description, company’s vision.
What should be included in a business plan? Not everyone is aware of that, but the executive summary of the venture is one of the most important parts of a business plan. That’s why it’s worth putting extra effort into creating it. It is best to write this part at the very end when the other elements of the business plan are ready.
Why write the executive summary of the venture at all? Unfortunately, you have to assume that the person who receives your business plan is quite busy, therefore, they will not read the entire document unless something in it intrigues them. After all, the executive summary is to intrigue the reader.
An executive summary is usually placed at the beginning of the document. This part is supposed to provide a brief overview of the most important issues related to the planned business. When you write a business plan for yourself, the executive summary can be omitted. Otherwise, it should be properly prepared. This kind of summary must highlight the key points that appear in the business plan.
The executive summary should not be too extensive. In fact, one page is enough. After all, the point here is to convey the gist of the business plan. It should include the following elements:
- startup idea
- business objectives
- product description
- potential customers
- marketing strategy
- current financial situation
- projected financial status
- funds needed for the development
- information about people involved in a startup
The executive summary is actually a shortened version of the business plan and its essence. This part of the document must be extremely convincing. How to write an effective executive summary of the venture? There is no one-size-fits-all template, but it is worth paying attention to a few key points when writing.
The executive summary should be properly composed. You need to think carefully about what this part of the business plan should be about. The questions of what your brand is and why the audience of the business plan should be interested in it should be answered. It is worth including some surprising information to intrigue the reader.
Another important point is the brevity of the executive summary. The fewer paragraphs, the better. Preferably four, but they also shouldn’t be too extensive. It is a good idea to ask someone to edit the executive summary, and perhaps the entire document.
This should be a person who deals with writing on a daily basis and can convey important information effectively. Also, you can give the abstract to other team members for review. It is best to write several versions of the executive summary and choose the best one, and then polish it.
The executive summary of the venture should be followed by the business description. In this part, you need to answer the following questions:
- Who are you?
- What are you planning to do?
Answering these questions is about explaining why you are in business in the first place and why you have decided to launch a company. You need to explain what makes you different from other business projects and why you can revolutionize the market. This is, at the same time, a good opportunity to define on paper the intangible aspects of your company, its ethical value, operating philosophy, principles, etc.
You should include the following aspects in your business description:
- the structure of the startup
- basic information about the company
- the chosen business model
- description of the industry
- vision and mission of the company
- company history
- short-term business objectives
- long-term business objectives
- team, and key employees
- employment costs
It is worth including the company’s vision in your business plan as well. You need to formulate the impact of your startup on the market, and perhaps on the world. Here a sentence or two will be enough. However, it must be a clear and specific statement.
What should be included in a business plan – summary
A business plan is a document that has a certain structure. The individual parts must be prepared carefully and accurately. However, it seems that the most important part is the executive summary placed at the beginning of the business plan. It is its attractiveness that will make the reader want to move on to the next sections.
You’ve just learned what should be included in a business plan . Check out our other articles: Startup marketing strategy.
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Author: Andy Nichols A problem solver with 5 different degrees and endless reserves of motivation. This makes him a perfect Business Owner & Manager. When searching for employees and partners, openness and curiosity of the world are qualities he values the most. View all posts
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How to Write a Business Plan Complete Guide
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24 Min Read
Welcome to the journey of entrepreneurship . You are here because you have a great business idea and want to know how to write a business plan to convert that idea into reality.
Before you start writing your business plan, let’s understand What is a business plan? Why do you need one in the first place? And What should you include in your business plan?
What is a business plan?
Why do you need a business plan, what to include in your business plan, business plan outline, key things to remember, how to write a business plan.
Let’s get started with an important question.
What is a Business Plan?
In simple words, a business plan is a document that outlines your business goals and details how you plan to achieve those goals. It is a living document that will prove to you and the rest of the world that your idea is not just a dream but can be a viable reality.
Also, it will help investors learn about your business, and vision , and convince them that your business idea is worth investing in. Your business plan will provide concrete evidence that your business idea is sound and has every chance of success.
Your business plan is the backbone of your business.
What Should You Include in Your Business Plan?
Every business idea and plan is unique in its terms. You should include all the details that explain your business idea in the best possible way. However, there are a few elements that every entrepreneur should include in their business plan.
The following is a full guide for creating a comprehensive business plan. We’ll first list out the sections that must be included in the business plan and in the later part, we’ll explain what should be added to each section:
Business Plan Cover Page
Table of contents.
- Executive Summary
- Company Overview
- Problem Analysis
- Products & Services
- Product Features
- Market Overview
- Market Size
- Target Customers
- Customer Needs
- Direct Competitors
- Indirect Competitors
- Promotions Plan
- Distribution Plan
- Key Operational Processes
- Management Team Gaps
- Board Members
- Revenue Model
- Financial Highlights
- Funding Requirements
- Use of Funds
- Exit Strategy
- Appendix – Supporting Documentation
Now you are ready to write your business plan, let’s understand in detail how you can write your business plan and what you should include in each element of the business plan.
The business plan cover page is the first and most important part of the business plan because it will create the first impact and will set the platform for how investors or readers will engage with your business plan.
Just by looking at the business plan cover page, an investor or reader can get a quick idea about the purpose of your business idea and business plan.
However, many entrepreneurs do not pay enough attention to the cover page, which is their biggest mistake.
In any document, the business plan table of contents provides a quick overview and works as navigation to navigate across the document. The same does for a business plan as well.
A table of contents is important to provide a quick overview of the sections that you have included in your business plan and help readers to navigate to the section that interests them the most. If investors are excited about a particular part of the business plan first, they will find the table of contents extremely useful in finding the relevant sections within the business plan.
Usually, the table of contents needs to be added at the start of the document and just after the business plan cover page.
Here’s a Quick Overview of Each Key Chapter:
1. Executive Summary
The executive summary is the first section of your business plan. However, the executive summary is always written at last as it is a brief introduction to your business plan and a summary of your entire business plan document.
A good executive summary should answer the following basic questions:
- What are you trying to achieve with your business idea?
- Why is your business idea important? and
- How are you going to achieve your business goals?
Generally, a good executive summary should include the following details:
- A brief description of the problems you will be solving
- Summary of your business goals & vision
- Products or services you are going to offer
- A solid description of the market you are targeting
- A quick look at your competition and your competitive advantages
- A basic financial projection of your revenue, expenses, and profits
- Your funding requirements (if any) and how you will be using that funds.
It does seem like lots of details are required to write a good executive summary but at the same time, it is important to get it right because if your summary does not clearly explain how you will solve a customer problem and make a profit, then investors or readers might not find it worth reading.
Most of the investors just read the executive summary and decide if they should read the rest of the business plan or not. So make your efforts count in this part of the business plan.
In short, write your executive summary in such a way that readers would want to turn the page and keep on reading.
Always remember, that a good executive summary should not be more than one or two pages long. However, in some cases, it can be longer if there is an absolute requirement.
2. Company Overview
The company overview section provides a brief history of your company if it already exists. However, if you are starting a new business, here you will need to write about yourself, your achievements, and how you will set up and form your business as a company.
Here you need to answer questions such as how and when your company was formed, what type of legal entity you are, and what are your achievements to date. Your past journey and achievements are the best sign of your possible future success, so make sure to include all the important milestones you or your company have achieved to date.
As a startup, your company overview can be very much short, so focus on your personal history, achievements, and the journey that led you to start your business in the first place. Sharing your original idea is important because it shows how you think and how you were able to craft your idea into a business.
Even if you are just starting, your educational background, professional experience, achievements, and the details of your best business idea can give potential investors a vision of what you are trying to achieve.
Have a look at this company overview example
- Starbucks company profile
- Puma company page
3. Problem Analysis
You have started the business because you have identified the unique problem that customers are facing and in this section, you just need to explain that problem.
The problem statement section can be explained with three simple questions.
- Whom does the problem affect?
- What are the causes of the problem?
- Why is it important to fix it?
When you write your problem statement, just describe how bigger the problem is and why it is most important to fix it. Also, there might be multiple problems you will be solving, but always try to focus on the main problem because you don’t win on the number of problems you solve; you win on how well you solve a specific problem .
While writing the business plan, most entrepreneurs focus on the solution they are going to offer, and in that process, they forget to explain the actual importance of the problem. Remember the more accurately you will explain the problem, the more valuable the solution will be.
Remember to keep the problem statement as simple as possible and should be self-explanatory. Also, it is good to include the key statistics that explain the severity of the problem.
After you explain the problem, it is also important to describe the world once a particular problem will be solved and that will set the stage to introduce the solution you are proposing.
4. The Solution
The solution section is also called the product & services section . In this section, you will need to define your best-proposed solution to the problem you explained in the previous problem analysis section.
Your solution details should be as simple as possible. It is not recommended to use too many technical or industry details while writing about your product details. Keep in mind your readers will not have the same education or technical background as you.
The length of this section will depend on the nature of your business. for example, if your business is product-focused and the product is relatively new in the market, then you should write more about the product, its design, its features, etc. However, if your business is relatively common like selling bicycles or restaurant business and you are planning to compete with better pricing or customer service then you probably don’t need to write more about products.
If your product is hard to explain it’s a good idea to include a picture. Also, if you are planning to expand your business and will come with new products or services in the future, then you can mention those details here as well.
Your product or service pricing should be mentioned here in this section. Apply the right pricing strategy to set the best pricing for your product or services. Also, if you have any product patents, copyrights, licenses, etc then add those details here in this section.
In short, your solution section should answer the following common questions:
- Your products or services are currently under development or already available?
- If not available, what will be the timeline for delivering products and services to the market?
- How are your products or services different from the competition?
- How will you get your products? Are you the manufacturer or do you purchase products from suppliers or wholesalers?
When you write this product and services section, think of your reader as a person who knows little to nothing about your business. so make it as simple as possible.
5. Market Analysis
Before you start your business, it is essential to check if there is a viable market available for the products or services you are planning to offer, and that makes market research the most critical and key to success for any business.
In simple words, market analysis is studying the industry your business will operate in, the size of the industry, and its trend & direction (growing, stable, or in decline).
The market analysis consists of main three parts:
- Market Overview: This is a general overview of the industry. In this part, you will need to describe the current position of the industry, market trends , and where it is heading. Also, you can write about your knowledge and experience in the industry.
- Target Market: In this part, you will need to be more specific about the segment of the market that will use your products or services. Not everyone from the industry will use your product or services, so it is important to find the right audience for your product. (For example, if you are starting a veg restaurant in the town, then all the people from town will not visit your restaurant. The only people who prefer and eat veg food will be your target customers).
- Market Size: Market size is all about finding how many potential customers are there for your product or service. Here you will need to show some statistics about the size of the industry (e.g., total U.S. sales in the last year) and its growth rate over the last few years.
The main objective of the market analysis is to identify the opportunities and risks associated with the business. It will also help you to understand how you should prepare your marketing strategy , where you should invest in terms of marketing efforts, and avoid making the wrong decisions.
With market analysis, you can identify the market entry barrier, and market needs, and estimate the market attractiveness from a financial standpoint.
6. Customer Analysis
Once you complete your market analysis, it’s time to identify the customers and needs of customers who are going to use your product or services, and this process is called customer analysis . Customer analysis is a key element of any successful marketing plan, as well as your overall business plan.
Customer analysis is critical for any business to succeed because if you do not know who is going to your offerings, and what your customers want, no business can succeed.
Now that you know customer analysis is that important, it is time to learn how you can perform strong customer analysis.
Customer analysis consists of main three parts:
- Demographics: Age, Sex, Ethnicity, Income, Family, Occupation, etc.
- Geographic: Location (Neighbourhood, Region, Urban/Rural, Online)
- Psychographic: Lifestyle, Personality, etc
- Interests: Hobbies, Activities, etc
- Growth: Size of the target customers and whether they are growing, shrinking, or stable.
It’s up to you what is the best way to get this information for your business. However, some practical methods include customer surveys, existing customer data analysis, social media listening, or talking with your customer support team.
- Identify your customer’s needs: Once you identify who your customers are, it’s important to understand their needs as well, and the answer to this question should be your offering.
- Explain how your product or services will meet those needs: Now that you know your target customers and what they need, it’s time to explain your products or services’ benefits. In this part, list out the key features of your products or services that will fulfill customers’ needs, explain the benefits of your offerings, and the outcome customers can expect by using your products or services.
Keep in mind, that a strong customer analysis must answer these three key questions:
- Who are your customers?
- What do they need?
- How do your products or services meet those needs?
7. Competitive Analysis
Competitive analysis is all about finding your competitors, analyzing their strengths and weaknesses, products and services, pricing, social media presence, marketing & sales strategy, etc.
Your competitors can be categorized into two classes:
- Direct Competitors: Direct competitors are the ones who provide the same solution as you do. For example, if you operate an Italian restaurant, other restaurants that serve Italian food will be your direct competitors. In this section of your business plan, outline who your direct competitors are, and add their strengths and weaknesses.
- Indirect Competitors: Indirect competitors are the ones who do not provide the same solution as you do. However, solve the same customer problem as you do. For example, if you operate an Italian restaurant, a Mexican or Spanish restaurant would be an indirect competitor. In this section of your business plan, outline who your indirect competitors are, and add their strengths and weaknesses.
Once you identify who your competitors are, it’s time to explain how different and superior you are compared to them and that will be the competitive advantage section of your business plan .
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Her strengths and weaknesses are subjective to your business which you can control and change like business location, pricing, uniqueness, etc. While opportunities and threats are external that are running outside your business, in the larger market. However, you can take advantage of opportunities and defend your business against potential threats, but you can’t change them.
It is always best if the business owners perform a SWOT analysis themselves. This task is not something that you should assign to someone else. A precise SWOT analysis will allow you to measure your strengths and weaknesses against the opportunities and threats in your business environment.
Once your SWOT analysis is ready, it will help you to form a strategy to achieve your business goals .
8. Marketing Plan
Now that you have explained your products or services and identified who is going to use those products or services, it is time to let your customers know about your products or services. And for this, you will have to plan strategy, and that planning you will need to explain in this section.
Your marketing plan can be divided into the following sections:
- Pricing: Explain your product or service pricing here in this section. Mainly, discuss how you finalized your pricing and how your pricing is better than the competition. Also, discuss if it’s low-cost or premium offerings and how your pricing supports it. This will ensure investors also that you have finalized your pricing with proper research.
- Promotional Plan: In this section, talk about your marketing activities and strategies that you will execute to attract your customers. It is always great to have some unique selling propositions (USP). However, Unique selling propositions should be short and self-explanatory. For example, Domino’s Pizza’s USP is “We deliver hot, fresh pizza in 30 minutes or less, or it’s free.” Also, discuss your other marketing or promotional activities that may include discount offers for early customers, media or online advertisements, product launches or social events, radio newspaper or magazine ads, affiliate or referral programs, etc. In this section, you can also write about your customer relation and support team and how they will work to retain your existing customers.
- Distribution Plan: The main purpose of your marketing plan is that customers to buy your products or services. So it is important to explain how they can buy your products or services. Your distribution plan will include all details about your distribution channel, sales channel & strategy, and payment policies.
Once you complete writing your marketing plan , make sure your marketing plan answers these key questions.
- What will be the pricing of your offerings?
- How will you reach out to your target customers?
- How will you retain your customers to buy from you repeatedly?
- How and from where customers can buy your products and services?
Your marketing plan can be 7-8 pages long. However, while writing your business plan, make sure you do not go into details and try to keep it as simple as possible. You can separately write your marketing plan for internal purposes.?
9. Operations Plan
Your operation plan will explain how you will manufacture your product and run your business. It can include a lot of details depending on your business. For example, if you are in the production business, you will want to include all the information about how you will get raw materials, and equipment, build your products and ship them.
However, it is not recommended to include all these details while writing the operations section of your business plan . You should include only major details that you think will give you a competitive advantage or are important for your readers.
An operations plan is useful for internal purposes as it will help your team to understand their roles to achieve your business goals. However, it will help investors also to learn how you will run your business to make your business succeed.
The management team should be the easiest section of your business plan because, in this section, you will need to write about yourself and your core team members who will run the business.
Always remember, that businesses’ success will depend on the team who is running them. So you must write this section carefully and convince your readers or investors that you are the best person to execute and run this business.
Many investors believe it is not the business that succeeds, it is the team that makes the business successful. In fact, in some cases, investors have funded start-ups mainly based on the team who will run the business.
In this section, list out important details of core team members like name, position in the company, contact information, qualifications, past experiences, achievements, etc.
You can also mention any management gaps present in your organization and when you are planning to fill those gaps. You can also mention if there is an advisory team or board of members who might not work in your organization but will advise you from outside.
10. Financial Plan
The financial section of the business plan is the most important component of the business plan. Whatever you will write in the business plan will be conceptual until you do not add some numbers to support it.
Have a financial plan if you want to secure outside funding from investors or bank loans from financial institutes . Even if you do not need funds, it is always helpful to have a financial forecast to achieve your business goals and make your business successful. Financial forecasting will give you a clear idea of whether your business is viable or not.
Your financial plan will include the following sections.
- Revenue Model: The main purpose of this section is to explain the different revenue streams of your business. Do you sell products? Do you provide services? Do you provide third-party advertisements? Or do you sell all of the above? It is equally important to update this revenue model section, once you start generating revenue. Use the revenue model as a living document to improve your plans. Focus on revenue streams that work best, while changing your approach to those that aren’t doing well.
- Financial Highlights: Include financial reports like cash flow, balance sheet, profit & loss, projected revenue, expenses, etc.
- Funds Needed: This section is required if you are looking for funds to run your business operations. Before you directly request funds , it is good to explain your current financial situation, how much you have already invested, and how much funds you already have secured. Once you explain your current financial position, it is time to explain what type of funding you are looking for. What are your preferred options to secure funds? It is important to update this section once you secure funding.
- Use of Funds: Once you explain how many funds you are looking for, it’s time to explain how you will use those funds. You will use it to hire new talents, expand your operations, pay your existing debts, or buy new equipment. If you are going to use funds for multiple things, mention each and also mention how much funds you are going to spend for each thing. Investors or financial institutes usually approve funds if they have a clear idea about how you are going to use your money.
- Exit Strategy: If you are looking for equity funding, it is important to have an exit strategy. A common exit strategy includes selling your company to a larger firm (acquisitions), selling or diluting your ownership, initial public offering (IPO), etc. If you have such plans, provide a detailed explanation of them in this section.
With upmetrics, business financial forecasting is easy and fun. Once you add your data, the system will generate all required reports automatically. Later you can embed those reports into your business plan. learn more about the upmetrics financial planning feature .
11. Supporting Documentation (Appendix)
Adding supporting documents is not a mandatory section in your business plan. However, it is important to add the documents which you think can convince investors that your business will succeed.
These documents can include achievements, product patents, awards, financial statements, resumes of key team members, legal agreements , product or organization pictures, etc. These documents can help readers understand your story clearly and concisely.
Once you write your business plan, it is equally important to update your business plan as your business grows . Keep in mind, that a business plan is not just a document but it is a roadmap of your business.
Things to Consider Before Writing a Business Plan
Now before you start the actual writing of your business plan and learn what to include in each section of the business plan, there are some key concepts that you must keep in mind and rules that you should follow during the entire business planning process .
Keep it short
Don’t you want your business plan to be read by your investors? Remember, many investors do not like to read a long business plan.
In this competitive time, no one has time to go through a 100-page long document. A typical 20-25 pages should be fine for any standard business plan. A well-written business plan ensures to communicate your message to your potential investors effectively.
However, if your business idea is a completely new kind of business or even a new industry, it may need quite a bit of writing to get the message across.
Your business plan writing purpose will decide how long your business plan should be. If you are writing your business plan to seek millions of funding, then you might need a lengthy and detailed business plan. A short business plan would work if you are looking to expand your business.
Be realistic and creative
Do not consider your business idea as your baby. Be realistic and honest with yourself while writing your business plan, and always try to add facts and realistic details of your business idea.
Also, your business plan should grab your reader’s attention quickly. Be creative while designing your business plan cover page and writing any important details in your business plan.
When it comes to the formatting of the business plan, make sure to use bullet points, images, and charts. Also, highlight the key points or metrics that you want readers to focus on. It helps bring your idea to life. Plus, it will keep your readers focused on reading.
You should be able to change it as the business grows
Most businesses start with a business plan, and once written, it’s never revisited. Never make that mistake. Your business plan should be treated as a working document that should be developed as your business grows.
For example, you might want to update your business plan as per the changing trends for a new round of funding or you might want to update it to counter unexpected problems like the COVID crisis. In a nutshell, keep your plan alive!
Why Do You Need a Business Plan?
Some entrepreneurs have achieved tremendous success without writing a business plan with their past experiences, less competition, or maybe by luck.
But the fact is, that many entrepreneurs have failed as well. It is just that we learn more about success stories only.
So, does writing a business plan guarantee success? Of course Not.
But, the business plan is your companion on your entrepreneurship journey. It will help you and your team understand the problems and the competition you will encounter in your journey. It will keep you and your entire team in sync and on the right path to achieving your business goals and success.
Click here to download how to write a business plan pdf
About the Author
Paresh Balar is the co-founder of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He loves sharing his thoughts on business and financial planning and its challenges through his blog posts. Read more
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