A good business plan serves as a road map providing guidance in making decisions. The plan should include industry and market information, financial projections and exit strategies. Your business plan helps define your business and keeps owners, managers, employees and other stakeholders on the same page. Properly structuring the plan makes it easier for others to read and for you to refer back to. A well-laid-out plan can also help attract investors and secure financing for your venture.
The Parts of a Business Plan
Create a professional cover sheet and table of contents. The table of contents helps readers find the specific sections or information they are seeking, and is often placed just after the executive summary. Shorter plans typically don't need a table of contents.
Place the executive summary at the beginning of the business plan just after the cover sheet—but write it last because you'll need details from the rest of the plan. This is the most important part of the business plan because it is the most often read by potential investors. Summarize key information from the plan's subsequent sections to provide a brief overview of your business. Include the mission statement, founding date, names of founders, number of employees and location. Also spotlight your business' current situation and future plans.
Outline your market research and analysis. Identify the industry your business operates in, provide an industry outlook and describe the market for your products or services (including the target market's size and distinguishing characteristics). Detail any market research you have conducted and share the analysis upon which you'll base your marketing strategies. Identify competitors and spell out your business' advantages as well as weaknesses and strategies for overcoming them.
Describe your company, how it will satisfy the market needs you have identified, and list primary success factors.
Outline the organizational structure and management. Include an organizational chart showing responsibilities and authority, explain the business' legal structure, and include such ownership information as the names of owners, percentage of their ownership, their involvement with the business and type of ownership. Profile the top management and board of directors and explain how their backgrounds strengthen your business.
Share the marketing strategy, which you should base on the research and analysis you highlighted earlier in the plan. Tell how you'll enter the market and communicate with consumers. Discuss advertising, promotion and public relations plans plus sales and distribution strategies.
Describe your service or product in detail, explaining why it can satisfy the target market's need. Outline the product's life cycle and provide any pertinent information about protecting intellectual property and conducting future research and development.
Spell out the business' financial status and funding needs. Formally request any additional funding and explain why it's needed.
Add detailed historical financial data in the form of past income statements, cash flow statements and balance sheets. Use pro forma financial statements to predict the business' future financial requirements and status as well as validate the funding request made in the previous section. Analyze your business' financial situation and future.
Construct an appendix using pertinent information supporting the claims and strategies you've outlined in the plan. Include resumes of important managers, past credit history, product images, letters of reference, legal permits and licenses, contracts and any other information that will strengthen your plan.
Keep your paragraphs short and use clear and concise language. Use bold type or underlined titles to clearly identify and separate sections. Employ bullets, lists, block indents, charts and diagrams to help tell the story and emphasize important points. Keep the reader's attention with images and color.
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