Having a good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.
Executive Summary: Write a brief portrayal of what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. This component provides an overall picture of your business from its very beginning to where you are presently.
Company description: Use your company description to provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organizations, or businesses your company plans to serve. Explain the competitive advantages that will make your business a success. Your company description is the place to boast about your strengths.
Market analysis: Understand your industry outlook and target market. Research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. You can obtain this information through federal and state departments of commerce, and trade organizations. It is important to explain where you located your information about your industry’s demographics.
Organization and management: Explain how your company will be organized and who will lead it through the creation of an organizational chart. Your business structure influences how much you pay in taxes, your ability to obtain funding, the paperwork you need to file, and your liability. You will need to decide on a structure before you register your business with the state. Most businesses will also need to get a tax ID number and file for the applicable licenses and permits. Seeking advice from business counselors, attorneys, and accountants can prove helpful.
Service or product line: Define the products or services that provide for your customer base. Explain how it benefits your customers and what the product lifecycle looks like. Share your plans for intellectual property, like copyright or patent filings.
Marketing and sales: Your strategy should adapt and change to fit your unique needs. This is the space intended to describe how you can bring in new customers and keep them throughout your business career. This is also where you will define how you will make a sale happen so make sure to thoroughly describe your complete marketing and sales strategies. Begin this portion of your business plan by discussing your industry along with specific information that applies directly to your business.
Funding request: If you’re asking for financing, this is where you’ll give a quick rundown of your needed capital. The objective
is to comprehensively clarify how much financial support you’ll need over the next five years and a detailed description of how you’ll use your funds. Be specific as to whether it is to buy equipment or materials, pay salaries, or cover specific bills until revenue increases. It would be wise to also include your plans such as paying off debt or selling your business.
Financial projections: Include financial projections that show that your business is stable and will be a financial success. If you are an existing business, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it as well. For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.
Appendix: Provide supporting documents or other materials that were specially requested. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, patents, legal documents, and other contracts. For more information check out US Small Business Association.
