How to Write a Business Plan
When starting a business, writing a business plan is the first step in the establishment of your prospective business. A business plan is the mission statement of the business. It will lay out the goals, objectives, and aims of the business. This business plan should address the clientele that will be served, the marketing and advertising plans, financial structure, how the business will be funded, and both short and long-term goals of the business.
Those looking to learn how to write a business plan should include the following sections. These sections are important for creating a successful business plan so that potential buyers, customers and board members will want to become a part of your business. Parts of a business plan include: Executive Summary: This is a brief outline of what the entire business plan includes with key points from all sections of the business plan.
Essentially this document should be able to be separated from the rest of the plan and read individually and still make sense. This part of the plan is often given to potential financial backers, board members and other interested parties for review. This is the most important part of the business plan, as this section may be the only part of the document that potential investors see.
Business overview: A section of the business plan that provides a description of the business. The business overview section of a business plan should include information about the legal structure of a business, how the business came to be formed, the type of business, location of your business, types of business conducted (i.e., internet sales, storefront, mail order, etc) and what products and services you will provide to your customers and clients. Operations Plan: This part of the business plan should include how the business will operate, including how it will be set up, and who will be in charge of what responsibilities.
Organization and Management: Organizational structure, details about the ownership of the company, who is part of the management team and who are the board members. In addition to who the board members are, you will need to describe why they were chosen to be a part of the board. This is the part of the business plan that should include a chart describing the organizational structure, which includes the managers, employees and other important point persons of the business.
Within this organizational chart, each managerial position should list the name of the person, the position, primary responsibilities, education, who they manage, special skills, number of years with the company, and prior employment. Ownership Information: It will be important to discuss the ownership information of your business. Is this business an incorporated company, a partnership, or a proprietorship? Such as names of owners, percentage of ownership, extent of involvement of each owner within the company, forms of ownership (stock, partner, limited partner, etc) and common stock information.
Market Analysis: This section is vital in showcasing the owner's knowledge about the industry within they have chosen to open a business in. For example, an industry description, industry outlook, target market, marketing testing data and marketing leads. This is a section for defining your target market and how you plan to market to this specific group of people. This section will often use charts and graphs to illustrate certain points and trends. Products and Services: Using a business plan to outline what products will be produced or sold, or what services are offered is a wonderful way to communicate information to others.
This section should highlight biggest sellers, unique products or services that your business provides and give a description about your items. This section will show the heart of your business, and what you are offering to the public. Marketing and Sales: Once the products have been outlined in the business plan, it is important to discuss how these products will be marketed to the desired audience. What forms of communication do you plan to use to market to customers? Print, radio, internet or viral campaigns-all forms of advertising should be discussed in depth.
Also, what kind of sales force will you be using in the business, and what will be the strategy to retain customers once they have already purchased goods or services? Competitive Analysis: This section is important for potential investors to read, as it discusses the strengths and weaknesses of your competitors. Competitors may be both direct and indirect, and you need to show your potential investors how you plan to stay relevant in a competitive field.
What will you do to stand apart and what will you do that is similar? Showing that you have unique ideas and will be able to stand out in a crowd will impress anyone reading your business plan. Financial Plan: This section should include all financial information of the company, including startup costs, balance sheets and other visual information to show the financial status of the company. The outline to the financial plan should include:
1. Where will the start up or seed money come from?
2. What amount will be needed over the next year, two years or five years for the b
3. Plans for revenue and profit.
4. Anticipated needs for additional funding.
5. Ongoing business expenses. Business projections and summary: Provide projected income statements, balance sheets, profits and revenue for a few years.
Wrap-up your key points, including mission statement, why this business is and will be relevant in the industry and finally give compelling reasons why financial backers should fund this endeavor. Using a business plan to ask investors for money is not a new practice.
Many small and large business owners alike have had to write business plans to ask for money and put board members in place. An effective one can help make or break the business, as a sound business plan usually means sound ideas, practices and commitment to excellence. A successful business plan can mean the start of a successful business.