Writing a business plan can undoubtedly seem overwhelming. Many entrepreneurs do not have a business plan because they do not know where to begin or what to include. Creating a business plan is an essential step in helping your business launch, grow, thrive, and stay the course. A business plan addresses each of the key areas inside your company to look at each area independently and how it serves the business overall.
A solid business plan provides vision and strategy to establish a clear timeline and the necessary resources to achieve expected goals. A comprehensive business plan may also offer a clear way to track progress and growth. Imagine how different your business journey might be having new insight and predictive data regarding potential risks to your plan moving forward? But if you’ve never written a business plan, knowing where you should start and what you should include is tough, but we can assist!
Like most intimidating projects, starting a business plan is best done step by step. As the saying goes, how do you eat an elephant, one bite at a time. While plans vary as much as businesses do, here’s an overview of the seven key areas of a business plan we have found to be foundational and what each section should include. Launch and Balance Consulting LLC offers help here with a proprietary template and training video that we’ve prepared to help you get started.
Now that you’ve ready to create a business plan, let’s go over the 7 key areas of a business plan.
1) Executive Summary
The executive summary is the most important part of your business plan, it should contain the following information about your business:
- Mission Statement: Goals and objectives
- Key Personnel: Biography of founders with relevant experience leading to the business creation
- Growth Projections: Report the estimated potential of the business
- Products/ Services: Describes what it is your business will sell
- Financial Information: Describes financial situation of company and current investors
The executive summary is built from each of the following sections of your business plan so it should be completed last. After reading your executive summary people should know exactly what your business is about and what you hope to accomplish. Your summary should be clear enough that investors can tell if your plan is viable or not from the information gathered here.
2) Company Description
The company description is the how. How will your business offer its products/ services? How will you compete with the competition? How will your business add value to your area? Here is where you differentiate yourself with how exactly your business will be successful.
3) Market Analysis
The market analysis shows how the industry you are breaking into currently runs. Where does the demand come from in your industry? Who currently meets those demands? How large is the market? Who is your target market, and how will you stay competitive? These questions will be answered in the market analysis and help investors see how your business will thrive and survive in its industry.
4) Organization and Management
The organization and management portion of your business plan will focus on the structure of your business. This section helps explain how you will be managed internally. What roles will be needed and who will complete the task needed for your business success? Creating these outlines help guide you in knowing exactly who and what your business needs.
5) Products/ Services
The products and services section of your business plan will further explain what you are selling. Here you should include details about your suppliers, cost of products and services, and the net revenue you expect to make from your sales.
The marketing section of your business plan shows your plan for growth. How will you attract customers and grow in the future? Here you can detail how you will market to your target audience and encourage sales.
7) Financial Projections
Financial projections are the financial goals for your business. You must outline how the marketing and sales you discussed earlier in your plan turn into profit. You should also include historical financial data, income statements, balance sheets and cash flow statements for the past three to five years including funding. If you are a startup, projections 3-5 years out are ideal. Then conclude with a brief analysis of your financial data, featuring a ratio and trend analysis for all financial statements.
Be sure to check out our newest template and mini course to assist you with taking the first step of business planning. Although nothing can guarantee your business success, you can certainly improve your chances by having a well thought out strategic business plan to navigate forward, pivot, and perform with confidence!