Having a written business plan is essential when you are just starting as an entrepreneur. It helps you evaluate your business idea thoroughly before you begin, makes it easier to obtain a business loan or funding from investors, and provides you with a direction on the path to success. Because it has such a high impact on your future success, you should be aware of how a proper business plan looks like.
How do you effectively write one? What should you include in it exactly? There are some essential steps to take here, and informing yourself properly will allow you to achieve optimal results. Here are the main stages you need to go through when creating a plan that supports you in achieving your goals.
A succinct introduction to your vision is the first thing to focus on. Any business plan starts with an executive summary, and depending on how well this is written, the rest of the plan can unfold smoothly. One or two pages will be sufficient here, you shouldn’t provide too many details – keep it short and informative.
Considering that some investors only look over the summary of a business plan, you need to make sure you’ve gone over every important business aspect. Usually, an executive summary should answer the following questions:
- What industry and specific field are you targeting?
- What services or products do you have available?
- Who is your target group of customers?
- What is expected from your industry in the future?
- Is your company scalable? How?
- Who will run the company, and what can you say about their experience and qualifications?
- Why did you decide to start a company with this profile?
Although this will be your introduction, you should consider writing the summary after you’ve already completed the other chapters, so that you have more information to work with.
An accurate and strong mission statement will be relevant to your audience, as well as to your team. It shows what drives you to make certain decisions, what factors led you to choose this business model, and what your current and future objectives are.
Include details on your specific goals, and what has led you to have them in the first place. Talk about the strength and potential of your team. View this statement as a way of selling the benefits and features of your company — make it brief, yet substantial and informative.
A company overview might look a lot like the executive summary mentioned above. However, it contains a more specific look into your business’ structure and what exactly you will be doing.
To segment your company overview correctly, and write about the primary aspects here, use this approach:
- Start with a few sentences meant to describe what your company does. When reading this specific chapter, your audience should obtain a basic understanding of the business profile.
- Move on to a short explanation of the nature of your marketplace and industry. What is the primary purpose of your business? What consumerism needs will you be covering? How are you planning to serve those particular needs?
- Share details on the legal structure of your company. Explain to your readers if you are an LLC, a C-Corp or an S-Corp, and include some relevant info in regards to the ownership structure.
The relevancy of your business plan, as well as the success potential of your company, can be directly linked to the market research practices you’ve adopted. An in-detail analysis of your market, industry, and competitors should be performed in advance. The insights obtained through research should be later included in the market analysis chapter of your business plan.
- This section will foster a sense of trust in your business concept, allowing readers to understand the specifics of your market and industry, and figure out if what you are offering is something of value.
- Describe the main characteristics of your industry. Talk about its fluctuations, trends, future predictions, and current leaders. Create an informative description here.
- After offering a broader perspective on the industry in general, narrow it down to your targeted marketplace. What can you say about your market’s customers? What needs do they have? What major market players are currently servicing those needs? What are you planning to do differently? Discuss market size and potential growth and how you are planning to impact that specific sector.
- Your market research should offer some further knowledge of market pricing. Add a few details on pricing in this chapter.
- Go over potential barriers you might encounter due to the current market climate.
- Look into what your competitors are doing. Mention their strengths and weakness, as well as partnership.
Services and/or Products
What products are you planning to sell, or what services will you be offering? This is the chapter that allows you to draw most interest — it’s about what your business will be doing. Incorporate a general description of your service or product, giving an honest and realistic view of how you will be developing or supplying it. Highlight the benefits of your offerings and what you are doing differently than your competitors. Go over intellectual property, sourcing, and fulfillment, and product development research if these are relevant for your company’s profile.
Now you should take the reader through a day-to-day plan, to see how the operations of your company will be handled. Try to provide concise explanations on:
- Location and logistics
- Transportation – if your business involves product sales
- Legal factors – permits, license, union memberships, etc.
- Inventory specifications (only for businesses selling a product)
- Vendors and providers – detail any outsourcing contract you might have or are planning to establish in the near future
These are the main chapter sections to focus on here, but it’s up to you how you want to portray the operational side of your business. Try to provide readers with a “visual picture” on how a day at the company will look like.
Organization and Management Structure
It’s time to write about your business’ organization and management structure.
This chapter will help readers figure out if the people in charge are sufficiently qualified and experienced to reach initial objectives. Include a hierarchical chart of your business and how the operations mentioned above will go through that said chart.
List all positions and describe the responsibilities of each business succinctly remember. From the board of directors and advisors to technical specialists and salespeople, add relevant details about your future team.
Discuss staff expansion possibilities as well, so readers can get an idea of where your business is heading.
Because your business won’t be able to function without financial stability, one of the most critical chapters in the entire business plan revolves around fiscal planning and financial projections.
- Statements of projected income
- A forecast of cash flow
- Balance statements
- Profits and losses analysis
- Capital expenditure budgets
These are the chapters you need to focus on most when you are trying to put together the perfect business plan. Handling things correctly here can matter significantly, considering a great business plan will help you stay organized with any future company decisions, might allow you to draw the interest of investors and create the image you desire for your brand. Keep in mind these suggestions when you’re starting out, and understand the importance of each one of these steps. The further development of your business could depend on it.
Angela Baker is a self-driven specialist who is currently working as a freelance writer at Trust My Paper writing services. She is always seeking to discover new ways for personal and professional growth and is convinced that it’s always important to broaden horizons. That’s why Angela develops and improves her skills throughout the writing process to help to inspire people. She also writes for LiveInspiredMagazine.