No two business plans are alike, but there are some standard elements that should be present. These include: an executive summary, company description, market analysis, product/service description, marketing strategy and financial projections.
By taking the time to do a thorough plan, you can avoid costly mistakes down the road.
1. Know Your Purpose
If you know your audience, you can tailor the plan to fit their needs. For instance, if you’re seeking investors or lenders, you’ll need to include a more comprehensive business plan than if you’re writing it for yourself or your team.
An executive summary distills the information in the rest of the plan and provides time-crunched readers a high-level overview that persuades them to read further. This section also includes a description of your product and details about your company’s management and organization strategy and legal structure.
2. Get Organized
Writing a business plan can be a huge undertaking. Use this tool to break the process down into manageable chunks and stay organized throughout the entire project.
There are a few different types of business plans. A traditional business plan follows a standard format and can be dozens of pages long. This is the type of plan most commonly used to request funding from investors or lenders.
A lean business plan is high-level focused and can be as little as one page. This type of plan is often used to onboard new hires and refocus existing strategies.
3. Do Your Research
Before drafting a business plan, be sure to research your target market and competitors. This information will help you make more strategic estimations about how your company could perform.
Include a table of contents and an executive summary. The executive summary should highlight the main points of your business plan and capture attention. Provide a list of the products and services you offer, your current revenue and profits and projections for future earnings.
4. Create a Table of Contents
A good business plan should be detailed and accurate. Investors and bankers can spot a false number or an overly optimistic projection quickly.
The first section is the executive summary, which gives readers an overview of the plan. This should highlight the main points of the plan and why it’s worth their time to read the rest of the document. It should also describe the ownership structure and provide a legal explanation for your business.
5. Write an Executive Summary
The executive summary is a high-level overview of the business plan. It allows you to distill the details into a shorter document that gives time-crunched reviewers the basic information they need to decide whether to read on.
It includes a description of the company, such as management structure and legal form (sole proprietorship, LLC, partnership or corporation). Then comes the market analysis – who will be your target audience and what is the potential size of their market.
6. Write a Market Analysis
Industry analysis is a big part of any business plan, whether it’s for internal use or to show to investors. It’s an opportunity to prove that you know your industry and your target market well enough to develop appropriate strategies for success.
Start by exploring your industry on a local, regional, national, or global level. Then break it down into market segments to identify specific customer groups that you will focus on.
7. Write a Financial Plan
Describe the management and organization of your company, including legal structure. Provide business financial projections based on anticipated expenses and sales forecasts. Include a projected income statement, balance sheet and cash flow statement.
Provide a list of current assets and long-term assets, along with accounts receivable and payable. Explain the core uses of any outside funding, if applicable. This template from PandaDoc includes detailed sections for all the main components of a business plan. It’s ideal for companies seeking a high level of accuracy and comprehensiveness.
8. Write a Marketing Plan
Before diving into marketing plans, it’s important to state your company’s mission, vision and values. This will put all of your marketing goals, activities and plans into perspective for anyone reading the plan.
Writing a business plan is an essential part of starting and managing a new business. Whether you need to secure funding or bring on partners, the perfect business plan can help your ideas become a reality.
9. Write a Management Plan
Explain what you have to offer to the market and why your product or service is unique. This section can be especially important if you’re seeking financing or investors.
Include your management team here, including their complete resumes and a description of how they will help you meet business goals. If you have an Advisory Board, highlight that too. Having an external team can give your company credibility and fill in the gaps where you might lack expertise.
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