Whether you’re just starting out or trying to expand, having a business plan is essential. There are many resources online on how to write one, but I’m just going to cover the most important parts of a business plan.
Executive Summary
The executive summary states what you’re business is all about. It lists your objectives, mission statement, and your key to success. This should be the first part of your business plan because it briefly summarizes your business and gives the reader an understanding about you. In this part, you need to really sell your business, whether it be for investors, a bank, or your potential clients.
Company and Product Summary
In this part of the plan, you need to explain what you’re company is all about. List all of the important finances such as cash flow, revenues and expenses. Also, talk about your products. List what you offer, how you make a profit with the products, and why your products are special and successful.
Market Analysis
List all of your competitors, your target market, demographics, and industry analysis in this part of your business plan. Be as descriptive as possible. List the names of your competitors. Define your target market and the demographics of it. List the median household income of your target market, their average age, their spending habits, etc. Lastly, describe your overall industry. Is it a growing industry, or a declining one? Explain how consumers purchase their items in this industry.
Strategy/Implementation/Management
It may seem like there is a lot of information crammed in this part of your plan, but all three of those items are tied to each other. List your strategy, explain how you’re going to implement it, and explain how your management team (maybe it’s just you) will be successful. Analyze your competitive edge and explain how your business will be successful because of it. Show how your marketing strategy will bring customers into your door. Finally, if there are more people running the business, list all of the members and how they contribute to the success of your company.
Financial Plan
This is the meat and the potatoes of your business plan. If you’re using a business plan to get loans, this is what the bank really looks at. In this part of the plan show how you’ll be making money. Forecast how much revenue you will make in the next three years. Make a graph of the profits you expect to have over the same time. List your cash flows and how that will impact your bottom line. The more detailed you are in this part of the plan, the better. List any and every possible revenue and expense source in this category.
As I’ve mentioned before, these are just some small tips on writing a great business plan. I’ve only included the most crucial ones. There are various opinions regarding what should go into a business plan, but these are the most important ones, and almost everyone will agree that it is necessary to include them.
If you’re looking for more information and greater detail in business plan writing, you can visit the SBA Website and explore their resources.