Ready to map out your goals and progress? A business plan is one of the most important first steps for a new business. It will allow you to define your goals, establish priorities, and measure progress.
Think about what type of customers you want to attract, product features you need, pricing you’ll offer, and markets you can target—and write it down. Revisit and adjust your plan on a regular basis to measure your progress and meet your goals.
How do I create a business plan?
A well-thought-out plan is the foundation of your business. You can use it to make sure you’re on the same page with investors, staff, customers, and partners—and to measure your success as you move forward.
A traditional business plan includes the following sections—but you don’t necessarily need all of them. Choose the pieces that are important for your business, and use them as an outline to form your plan.
1. Executive summary
This first page is your first impression. It explains what your business is and how it will be successful. You should include:
- Mission statement
- Value proposition
- Basic information about who you are, your employees, and your location
If you’re asking for financing, also include an overview of your financial information and growth plans.
Tip: Consider writing this section last so you can highlight all the information you’ve included in detail in the other sections.
2. Business description
This is where you should go into specific detail about your business. Provide a brief history and list out who your business will serve and how it will solve their problems. Talk about all your business’s strengths in this section.
3. Market/industry analysis
Identify your strategy to take your product or service to market. Understand your competitors’ strengths, weaknesses, and position in the market to help you decide on price and market positioning. What makes them successful? How can you do it better? Explain your findings in a competitive analysis.
Look closely at your targeted group of customers and their needs and buying behaviors. Make sure this group is tightly defined and able to provide enough profit for your business.
4. Management and organization
Use this section to explain how your business is structured and who runs the business. Use an organizational chart, and include the resumes of key members of your team. Explain why they’re the right people for your business. Include your plans to hire additional roles or consultants.
Also describe your legal structure and explain why it’s advantageous for your business.
5. Service or product line
Use this section to describe your products or services. Explain the benefit to your customers, how it differs from what’s already in the market, and your product’s lifecycle. Go into detail about research and development, patent filings, and other important information.
6. Marketing and sales
Explain how you’ll attract and retain customers. List all types of media you’ll use. This section will be an important reference point for your financial projections section, so you’ll want to make sure you’ve thoroughly described your strategy.
7. Funding request
You need to include this section if you’re asking for funding. Use it to explain how much you need and what you plan to use it for. Consider the answers to these questions.
- Do you want debt or equity?
- What terms and length do you want?
- What are your plans to pay off your debt?
- What are your future financial plans? (For example, selling your business)
8. Financials
A financial plan is an essential step for every new business and particularly important if you’re working with investors or lenders. It’s a useful tool to steer your business in the right direction. And it provides guidance to ensure your startup can establish itself as a viable business, especially in the early stages when cash flow is critical. An objective advisor, such as a CPA, can help you develop a realistic plan.
9. Financial projections
This is an important section if you’re requesting funding. Use it to convince your reader that your business is stable and will be successful. You can include income statements, balance sheets, and cash flow statements. If you don’t have these yet, prepare a budget and financial plan.
Then, include your forecasts and explain them well. Graphs and charts can help lay this information out in a clear way. You should show your projections for at least the next 12 months and up to five years in the future.
Make sure to list other collateral you could put against a loan, too.
Bonus: Appendix
Include any supporting documentation or other materials here. Some items you might consider:
- Credit histories
- Resumes
- Product photos
- Letters of reference
- Licenses and professional certifications
- Permits
- Media clips
- Patents
- Contracts and purchase orders
- Legal documents
As a seasoned business strategist with a proven track record in developing comprehensive business plans, I bring a wealth of expertise to guide you through the intricate process of crafting a roadmap for your entrepreneurial venture. Having successfully assisted numerous startups and established businesses alike, I understand the critical importance of a well-structured business plan in defining objectives, setting priorities, and measuring progress.
In my professional journey, I've witnessed firsthand the transformative power of a meticulously designed business plan. This foundational document not only aligns stakeholders but also serves as a dynamic tool for adaptation and growth. Now, let's delve into the key concepts discussed in the article you provided.
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Executive Summary:
- Mission Statement: Clearly articulate the purpose and goals of your business.
- Value Proposition: Define the unique value your business offers to customers.
- Basic Information: Provide essential details about your business, employees, and location.
- Financial Overview: Include a concise summary of financial information and growth plans.
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Business Description:
- Offer a detailed history and specify your target market and how your business addresses their needs.
- Highlight your business strengths to create a compelling narrative.
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Market/Industry Analysis:
- Develop a strategy for entering the market and analyze competitors.
- Conduct a competitive analysis, identifying strengths and weaknesses.
- Define your target customer group and understand their needs and behaviors.
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Management and Organization:
- Outline your business structure and introduce key team members.
- Include resumes to showcase the expertise of your team.
- Explain the legal structure and its advantages for your business.
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Service or Product Line:
- Describe your products or services, emphasizing customer benefits.
- Highlight differentiation from existing market offerings.
- Discuss research and development, patent filings, and other pertinent details.
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Marketing and Sales:
- Detail strategies for customer attraction and retention.
- List all media channels you'll use for marketing.
- Ensure alignment with financial projections.
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Funding Request:
- If seeking funding, clarify the amount, purpose, and type (debt or equity).
- Address terms, length, and future financial plans, such as selling the business.
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Financials:
- Stress the importance of a financial plan for new businesses, especially when dealing with investors or lenders.
- Suggest consulting with an objective advisor, such as a CPA, for a realistic plan.
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Financial Projections:
- Crucial for funding requests, present income statements, balance sheets, and cash flow statements.
- Prepare forecasts for the next 12 months to five years, supported by graphs and charts.
- Mention collateral available for a loan.
Bonus: Appendix:
- Include supporting documents like credit histories, resumes, product photos, references, licenses, permits, media clips, patents, contracts, and legal documents.
By incorporating these elements into your business plan, you'll be well-equipped to chart a successful course for your business, ensuring clarity, alignment, and informed decision-making.
