A good business plan is a road map for your business. And like any good road map, it should provide you with quality directions to where you’d like your business to go. The difference in business is that you may have to change how you get to where you want to go. In that case, you may need to make changes to your business plan. And that’s OK! It’s your business. A business plan should be dynamic and change as your business matures. It should serve a purpose and tell a story that provides insight into what your goals are and how you plan to achieve them. So how do you write a business plan and what should you include?
Executive Summary: a brief overview of your business. The executive summary should include a mission statement, what your business does, who owns/runs your business, and where your business is located.
Company Description: this should be more detailed than the executive summary. When describing your business, you should focus on the audience your company will serve, what will make your company better than other existing businesses and highlight any key personnel that will contribute to your success. Don’t be ashamed to highlight why your business will be great!
Market research: the environment you will be operating in. The reader of your business plan will want to see that you have a good understanding of the existing market you’re entering. You should know who your competitors are and what makes them either successful or unsuccessful. The reader will also want to know what your business will do that will make it better than your competitors.
Organization: who operates/manages your business and how is your business structured. Let the reader know what type of business you have (LLC, C Corp, partnership, etc.) and who has control over the business. When providing information on management, highlight special qualifications an experience that indicate the potential for success. You may want to include an organization chart that shows the overall management structure.
Service or product: what is it that your business will do. You obviously have a good idea of what services you will provide or products you will produce when you start your business. Here you will provide greater detail on that service or product. Include any patents you may have or new methods you will bring to the market for providing a service.
Marketing: how you reach your customers. You can’t survive in business without customers. Here you will describe what methods you will use to attract and retain clients. What strategy will you use and how might it change over time?
Funding request: money! If you’re writing a business plan with the intent of seeking financial investment or a loan you will need to be specific. How much money are you asking for? What are the terms/length of the loan you’re seeking? What equity are you exchanging in return for investment? How will the money be used? What existing capital do you currently have to act as collateral? What is your financial outlook over the next year, 3 years, 5 years? The shorter the terms of a loan, the more detailed you should be: consider detailing your financial outlook by quarter or even monthly. A prospective investor or lending institution will want to know that you are a good option for their money!
There are organizations that will assist you in writing and reviewing your business plan. The Small Business Administration (SBA) and the Small Business Development Center (SBDC) are two excellent resources you should seek out. They both employ staff that are experienced in helping small businesses and are willing to help.
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