You’ve no doubt heard the expression, “Failing to plan is planning to fail.”
Many entrepreneurs write a business plan only when they need tosecure start-up financing. However, your plan is far more than adocument for banks and investors to read; it’s an invaluable roadmap for launching and growing your business.
In order to put your business concept on paper, you need to thinkthrough and research the many factors that are needed to make sure yourbusiness is a success. With a plan, not only can you spot potentialweaknesses, opportunities, and threats, your plan can help you makeinformed decisions about your venture before you commit yourself legally or financially.
Here, we’ve summarized the key sections that you’ll find in a business plan.
The Seven Key Sections of a Business Plan
1. Executive summary
Your executive summary should be 1–2 pages long, and provide anoverview of your business concept, key objectives of your business andyour plan, ownership structure, management team, your product or service offering, target market(s), competitive advantages, marketing strategy, and a summary of your financial projections. Your executive summaryshould be written last, after you’ve written the rest of the plan; eachparagraph should be a summary of the more detailed, related section ofthe plan.
2. Business Overview
In your overview, include details regarding your business’s history,vision and/or mission, objectives, and your ownership structure.
3. Products and Services
Expand upon your products and services, including features andbenefits, competitive advantages, and, if marketing a product, how andwhere your products will be produced.
4. Industry overview
The industry overview is your opportunity to demonstrate theviability of your business by discussing the size and growth of yourindustry, the key markets within your industry, how your customers willbuy your products or services, and which markets you’ll be targeting.
5. Marketing Strategy
Here you describe your target market segments, your competition, howyou’ll differentiate your products or services, and your products’ orservices’ unique selling proposition (USP).
- Discuss product or service pricing and promotion, including how your promotional programs will appeal to each of your target marketsegments.
- Provide a plan of traditional and guerrilla marketing tactics, suchas tradeshows, press-magnet events, social media marketing (e.g.Facebook, Twitter, etc.), networking, and print, media, or onlineadvertising. Include the cost associated with each tactic.
- Describe how your products or services will be sold (e.g.storefront, online, wholesalers), and your target markets’ buying cycle.
6. Operations Plan
Provide a profile of your management team, your human resources plan, your business location(s) and facilities, your production plan (ifselling a product), and an overview of day-to-day operations.
7. Financial plan
Some believe this is the most important part of a plan – so much so,it’s worth dedicating up to 80% of your time to writing this section.You’ll need to show three years’ worth of projected financialstatements, including income statements, pro-forma balance sheets, andmonthly cash flow and annual cash flow statements. Summarize eachstatement into a few easy-to-understand sentences and put these in acover page for the statements. Be sure to document all of theassumptions you used in forecasting your revenues and expenses.