Your business needs a written business plan. This one document can help you attract potential investors and keep your business moving in the right direction. Whether you are an entrepreneur working on your own or a small business owner starting your newest venture, taking the time to write out your business plan is important.
Every business plan will be unique to the individual business. However, there are a few elements that are typically included in every business plan. Keep reading to learn about the necessary steps to create your business plan.
1. Executive Summary
You should write this section last, but it is positioned at the top of your business plan. Use this section to briefly inform your reader about your company. Focus on the highlights for why your business is and will be successful. In this section, include:
- Your mission statement
- Your products or services
- An overview of your leadership team and employees
- Your location
- Brief financial information
- A high-level plan for growth
2. Company Description
In this section, you can provide more details about your company, including your customers. Spend time detailing the problems your business will solve and the competitive advantages your business possesses.
3. Market Analysis
Do your research before writing this section of your business plan. Detail what other businesses are currently doing as well as their strengths. Identify any industry trends and what makes your competitors successful. You should also note what your business can do better. Take note of the specific ways your business can serve the industry or ways you can improve upon what your competitors are doing.
4. Organization and Management
The legal structure of your business should be clearly laid out. This information is important to include for potential investors. It is a good idea to include an organizational chart even if your company is small. This will make it clear to your team and potential investors on the structure of your company and the key members of your team.
5. Services or Products
You can go into more detail in this section on the products and services you plan to offer. Describe the products and services fully as well as any research and development efforts you are conducting for your business. Lay out the lifecycle of your products and the benefits your offerings provide for your customers.
6. Marketing and Sales
This section will be radically different for every business. The strategy you use for marketing and sales is key to how you plan to attract customers and retain them. Lay out the process for obtaining a sale and describe all marketing strategies in detail. The more information you can provide here, the better.
7. Request for Funding
Include this section if you are planning to ask for funding. Detail your funding requirements over the next five years and how you plan to use those funds. Be clear on the type of funding you are looking for, any other funding you have acquired, and your plan for paying off debt in the future.
8. Financial Projections
In this section, you can convince potential investors that your business has the potential to be a financial success. Financial projections should include previous statements of income, balance sheets, and your cash flow statements. Provide at least three to five years of documentation if possible.
If you do not already have an established business, you should provide your financial projections for the next five years. Be as specific as possible for the first year, using monthly or quarterly projections. Your projects should align with your funding request in the previous section.
Use this section to provide any detailed charts, graphs, or supporting documents. Potential investors may request specific documents, so be sure to include them here as well. Legal documents, permits, resumes, and other extensive documents are typically included in the appendix.
If you are writing your first business plan, the task can seem daunting. However, there are plenty of free business plan templates to help you get started. The process will take time and practice, but it is essential to your business.