Writing a Business Plan
You have a business idea in mind. The details have been stewing in your brain for weeks. Maybe you even wrote some bullet points on a napkin while eating lunch. What’s next? Writing a business plan provides a map for starting your business and is essential to getting your business off the ground.
The business plan serves two purposes. First, it provides the blueprint for your organization by outlining company goals and how you will achieve them. Second, the business plan is a resource for others to use to learn about your company.
Each business plan is unique to the company that creates it and length and content may vary based on the intended audience. Because your company is a growing and changing business, your business plan will also change, but by including key information about your company you will always have a jumping off point for making key decisions. Keep your business plan concise by only including relevant information—no filler. Some common elements of a business plan include the following:
The Executive Summary
The executive summary is a short overview of your business plan that entices the reader to read the entire plan. It describes your business concept including a product or service description, the market you will serve, and your business’s unique attributes (how you will compete against other similar businesses in the industry.) Include high-level information such as:
- General information such as the company’s legal structure, history, office locations, and mission statement
- A listing of owners and key employees
- Key financial highlights such as sales, profits, cash flows, return on investment, and growth
- Product or services
- Target market
- Company ideals
In this section provide detailed information about your company’s history, ownership structure, company locations, and your start-up costs. Start-up costs could include costs to develop your product, license fees, insurance costs, rental fees, and marketing costs. Also include any capital you have available when you launch the business.
Products or Services
Tell readers what you sell or plan to sell and why it would be a benefit for them to purchase your product or service. If you have developed a product or service to meet a market need, mention that here. Explain what features make your product or service different from the competition and why those differences are important to consumers.
In your business plan define characteristics of the market where you will be offering your product or service. Use the results of a SWOT analysis to help complete the market analysis section. Some items to include are:
- Industry trends and how they are affecting market growth
- Past growth rates, current sales, industry size, and industry growth forecasts
- Regulatory restrictions on your industry and related costs
- Information about your target market (the market segment or niche where you will offer your product)
- An overview of main competitors
- Pricing plans, marketing strategies and promotional campaigns you hope to undertake
- Efficiencies you have identified
- Customer service initiatives
It is important to have a good grasp on your company’s financial health even if you are in the early stages of launching your business. If your business is just getting off the ground, supply forecasted financial information. Make sure it is realistic and well-researched based on the results of businesses similar to yours, industry trends, and your own knowledge and experience.
The following financial information should be included in the financials section for a 12-month period:
- Balance Sheets
- Income statements
- Amortization and Depreciation
- Cash Flow Statements
If you don’t feel comfortable creating the financial documents, popular accounting software is available to do so. Document templates may also be available on the Internet. You can also contact an accountant to create financial documents. It is important to be as accurate as possible.