Nowadays, it seems like a new company is starting every hour.
But, while starting a company may seem easier now than ever before, entrepreneurs have an uphill battle from the moment they start a business. On average, a new business will need to compete with 25 competitors in order to stand out and thrive in its industry.
Aspiring business owners that go in blind without a clear, actionable plan for marketing, hiring, finances, and operations are destined to face significantly more difficulties on their journey to building a successful company — which is why crafting a business plan is an essential step in the entrepreneurial process.
This way, you’ll be able to show them how organized and well-thought-out your business idea is, and provide them with answers to whatever questions they may have.
When looking at a blank page on a laptop screen, the idea of writing your business plan can seem impossible. However, it’s a mandatory step to take if you want to turn your business dreams into a reality.
That’s why we’ve crafted a business plan template for you to download and use to build your new company. You can download it here for free. It contains prompts for all of the essential parts of a business plan, all of which are elaborated on, below.
Your business plan should be prefaced with an eye-catching cover page. This means including a high-resolution image of your company logo, followed by your company’s name, address, and phone number.
Since this business plan will likely change hands and be seen by multiple investors, you should also provide your own name, role in the business, and email address on the cover page, as well.
2. Executive Summary
The executive summary of your business plan should provide a one or two page overview of the business and highlight the most crucial pieces of information for readers. Intended to grab the reader’s attention, this section should summarize critical information regarding your company overview and upcoming short-term and long-term goals.
The executive summary is essentially a boiled-down version of your entire business plan, so remember to keep this section to-the-point and filled only with essential information.
Typically, this brief section includes:
A mission statement.
The company's history and leadership model.
An overview of competitive advantage(s).
An ask from potential investors.
3. Company & Business Description
In this section, you’ll provide a more thorough description of what your company is and why it exists.
The bulk of the writing in this section should be about your company’s purpose – covering what the business will be selling, identifying the target market, and laying out a path to success.
In the Company & Business Description portion of your business plan, you can also elaborate on your company’s:
Mission and/or vision statement.
Team & organizational structure.
3. Product & Services Line
Here’s where you’ll provide a more in-depth overview of the makeup of your business’s product and/or services line. You should provide each product or service’s name, its purpose, and a description of how it works (if appropriate).
Next, add some color to the sales strategy by outlining your pricing model and mark-up amounts.
If you’re selling tangible products, you should also provide an explanation of production and costs, and how you expect these factors to change as you scale.
4. Market Analysis
The market analysis section is where you’ll provide details about the audience to which you’re marketing your business. This should encompass the size of your total addressable market, your market’s demographics and psychographics, and a location analysis for your business’s operating space.
It helps to reference your market research documentation here, like a Porter’s Five Forces Analysis or a SWOT Analysis (templates for those are available here). You can also include them in your appendix.
If your company already has buyer personas, you should include them here as well. If not, you can make them right now using the Make My Persona Tool.
5. Marketing Plan
Unlike the market analysis section, your marketing plan section should be an explanation of the tactical approach to reaching your aforementioned target audience. List the channels you’ll be advertising on, what organic marketing methods you’ll employ, etc.
It doesn’t matter if your sales department is an office full of BDRs or a dozen stores with your products on their shelves. The point is – like all companies – all sales strategies are different, so you should clearly outline yours here. Common talking points include:
Sales team structure, and why this structure was chosen.
Your investors may want to know the legal structure of your business, since that could directly impact the risk of their investments. For example, if you’re looking for business partners to engage in a non-corporation or LLC partnership, this means they could be on the line for more than their actual investment. Because this clarification is often needed, explain if you are and/or plan to become a sole proprietor, partnership, corporation, LLC, etc.
You should also outline the steps you have taken or will need to take in order to operate legally. This includes necessary licenses, permits, registrations, insurance requirements, etc. that are needed to follow the law. The last thing your investor wants to hear after they’ve sent you a big chunk of change is that you’re operating without proper approval from local, state, or federal government.
8. Financial Considerations
Ultimately, investors want to know two things:
When they will earn their money back.
When they will start seeing returns on their initial investment.
That said, you’ll need to be clear, calculated, and convincing in this section. It should cover:
Sales forecasts for the next several months/quarters.
Break-even analysis for time and dollars.
Projected P&L statement.
Most importantly, you’ll want to explain the why behind each of these sections. Facts and figures are key here, so be as specific as possible with each line item and projection, in addition to why you’ve included it.
If you have pages upon pages of charts and spreadsheets for this section (which – arguably – you should), you may want to distill them into a page or two and include the rest of the sheets in the appendix.
The best business plans are filled with imperative information, spanning dozens or even hundreds of pages long. To avoid disrupting the flow of the business plan with visuals, charts, and spreadsheets, consider including all of these resources in the appendix. Aside from what we’ve already mentioned – marketing plan, sales plan, department budgets, financial documents, etc. – you may also want to attach the following in the appendix:
Floor plans for your location.
Images of social media pages.
Your logo and any graphic design assets.
Mock-ups of your product.
Renderings of your office space or location design.
Adding these pieces to the appendix enriches the reader’s understanding of your business and proves you’ve put the work into your business plan without distracting from the points throughout the plan.
Use a Business Plan Template to Get Started
Writing a business plan shouldn’t be an insurmountable roadblock to starting a business. Unfortunately, for all too many, it is.
That’s why we recommend using our free business plan template. Pre-filled with detailed section prompts for all of the topics in this blog post, we’re confident this template will get your business plan started in the right direction.
Originally published Aug 7, 2020 7:00:00 AM, updated August 07 2020