Whether you are seeking financing, developing your marketing budget, doing research for an upcoming product, service, or just trying to build a better brand, having a business plan in place is vitally important. This simple document can do so much, yet many business owners minimize its impact or skip it altogether.
Part of the reticence is the unfounded worry that writing a business plan will be overly complicated. Many business owners believe that they cannot write a plan on their own, and that paying a professional to do it will use up precious resources that could better be used elsewhere.
You do not have to worry about any of those things. If you are smart and capable enough to run your own business, you have the mental resources to write a business plan as well. Here are some key things you need to know as you put your business plan together.
Build Your Outline
No matter what the size or nature of your business, the business plan you develop should follow the accepted format. Having a properly formatted business plan is essential if you want lenders, potential partners and others to take you seriously, so start with the outline listed below.
- Executive summary
- Business description
- Objectives and business goals
- Business and management structure
- Products and services
- Marketing and sales plan
- Financial analysis
- Financial projections
This outline will help you develop a winning business plan in a few simple steps. More importantly, the rigid structure will allow you to analyze your business even as you are writing the plan, giving you real insights into what you hope to accomplish, the customers you plan to focus and other key aspects of your entrepreneurial dreams.
Every business plan will begin with an executive summary. This is where your mission statement will go, so think about your business and a phrase that sums up what it has to offer. Your mission statement should be succinct, meaningful, and reflective of what you want your firm to be.
The next part of the business plan is a brief description of your business. This is where you will detail things like the legal name of your business, the address, a list of phone numbers and other key details. You can also include a history of the business, including its compelling origin story, to flesh out this second part of the business plan.
Objectives and Goals
The third part of the business plan is objective section. This is where you will detail exactly what you want your business to achieve. What are your goals for the firm? Do you hope to attract outside funding? Are you planning to take on a partner or issue shares of stock? This is the part of the business plan where that information should be located.
Part four of the business plan is where you will talk about the structure of your firm. Is your business a C-corp, an S-corp, a partnership or a sole proprietorship? Why did you choose the business structure you did? Think about how your business is structured and how your management team will help you accomplish your goals.
Products and Services
The fifth part of the business plan is where you will talk about the products and services you offered. In addition to descriptions of the products and services, this part of the business plan should include key details such as the pricing structure you are using, the customers you are targeting and the fulfillment model you plan to use for your orders.
Sales and Marketing
Part six of the business plan is where you will discuss your sales and marketing plan. No matter how great your products and services may be, without the right marketing your business will not go far. This part of the marketing plan is where you will detail your plans to get the word out, from viral sales campaigns and influencer advertising to more traditional forms of marketing.
The seventh part of the business plan is all about money, specifically the financial analysis of your firm. This section of the business plan will include details like your net profit margin, the amount of money you will keep after all expenses have been paid. The financial analysis will also include details like measurements of liquidity, debt repayment and how you plan to handle your accounts receivable.
The final part of the business plan is used to look at the future. Armed with hard data on sales and profitability, you will project those numbers out, giving you a look at what your business, and its financials, will look like as time goes by.
In addition to the text itself, your business plan will probably include several documents, from documentation of your business structure to profit and loss statements to justify the numbers you have provided to mockups of your marketing plans. All these documents make up the appendix, and they will comprise the final pages of your business plan.
Having a business plan in place is essential for your success, and it is a step you should not overlook. Despite its length and seeming complexity, the business plan is a straightforward document, and now that you know you to write one you have no excuse for not doing so.