Starting a business requires a solid plan. Each step is important, and the better organized you are, the more solid your new corporation or LLC is likely to be. Think of your business plan as the map you'll use to guide you through each stage of starting a business. There are many business plan resources available to those interested in learning how to write a business plan, and you'll find that throughout all of these business plan resources, you'll see a lot of common elements that are important to the success of a new venture.
When writing a business plan, you must include an executive summary. The executive summary explains the purpose of your business, its current stage, and where you envision it being in five years.
- Strive to keep your executive summary one to two pages in length.
- Make the executive summary a document that can stand alone or be the introduction to your business plan. Be ready to furnish just the executive summary to potential investors.
- Include a mission statement paragraph, general company information such as names of founders and the number of employees, financial highlights, descriptions of products or services, and future plans.
Write a company overview that adds more detail to the information provided in the executive summary. The company overview includes in-depth information about how your business is structured and what the business does.
- Start the company overview by describing what the business does.
- Explain your industry and marketplace and how the business fits into it.
- Describe the legal structure of the company and the ownership structure.
Analyze your niche, the marketplace, and your competition. The market analysis enables potential investors to better understand the company and feel confident about investing.
- Include a description of the industry, its size, recent growth, and forecasts about future growth.
- Describe your target market, why consumers need your product or service, and how you intend to reach them.
- Provide information about the size of the target market, how they make purchases, how often they buy, and if there are stronger times of the year when they buy.
- Make a prediction about how much of the market share you expect to capture.
- Give an estimate of product pricing based on market research.
- Discuss any barriers to market entry that the business might face.
- Highlight top competitors, including their market share, barriers they present, and information about their strengths and weaknesses.
Business Organizational Structure
Outline who will be responsible for the smooth operation of your company. Provide information about the experience and background of everyone on your team.
- Create an organizational chart that shows your business structure.
- Provide more information about how the company is structured legally, who owns what, and the percentages of ownership.
- Give more information about the background and expertise of partners, managers, and other high-ranking people on your team.
- Make a list of potential hiring you may need to do in the future.
Description of Products and Services
When you get to this point in writing a business plan, it's important to fully describe the products and services you will be offering. Provide more information about the consumers who need or want your product and the need the products fulfill.
- Outline what makes your product special and how what you sell serves consumers' needs. How is your product or service different from what others are selling?
- Describe the status of your products, whether products still being developed or you have a finished product ready to sell.
- If you are still in the development stage, share information about how you will bring the product to the final stage.
- Explain any intellectual property matters if you have a proprietary concept that is part of your product development.
- Include information about outside sourcing if you will be relying on vendors to provide a product or service.
Marketing and Sales Plan
Explain how you will market and sell your product or service. Go into detail about how you will get consumers interested in what you are selling.
- Outline how customers will find you and interact with you. Give details about how you will stand out from your competition.
- Share how you plan to reach customers, including advertising methods, packaging ideas, public relations, and content marketing.
- Describe who will sell the product or service and the size of your sales staff. Outline how employees will be trained.
- Explain your team's selling strategy, whether employees will cold call customers or possibly set up sales meetings. Outline how sales agents will close deals.
Financial Plan and Projections
If the company is already operational, provide data to show the state of its finances. If the company is brand new, provide financial projections as determined by research and analysis.
- Financial data for an operating company should include income statements, balance sheets, cash flow statements, accounts receivable and payable statements, and information about debt.
- Financial projections for a new company should include cash flow forecasts, statements of projected income, and capital expenditure budgets.
- Include information about funding needs immediately and in the future.
Add an appendix at the end of the business plan that provides supporting information. The appendix is for any information you did not specifically cover in the plan.
- Add legal documents, business licenses or permits, and contracts.
- Provide product pictures, if applicable.
- Furnish your professional résumé and résumés of high-ranking team members in the appendix.
Additional Business Plan Resources
- Write Your Business Plan
- Basics of Writing a Business Plan
- Writing a Business Plan
- The Elements of a Business Plan: First Steps for New Entrepreneurs
- How to Write a Business Plan
- Get Help Forming a Business
- How to Create a Business Plan: A Step-by-Step Guide
- What to Include in a Business Plan
- What Is a Holding Company?
- Writing a Business Plan
- Parts of a Business Plan
- Writing a Successful Business Plan
- Overview of a Business Plan
- Start a Wyoming LLC
- Guide to Creating a Business Plan
- How to Write Your Business Plan