Parts of a Business Plan

Business plans typically follow a traditional format or structure. They may also include charts and graphs along with a detailed set of financial statements. While there is room for creativity, most lenders expect to see at least the following components, roughly in this order:

Executive Summary: Since this summary highlights the key points of your plan, it’s usually best to write it last. Or, conversely, if you feel you need to “force” yourself to boil your business down into a short statement, you may want to write it first, but be open to revising the summary later. This section is where you answer the general questions about your business concept, team, needs filled, market advantages, financial viability, and overall likelihood of success and profitability.

Business Description: This section breaks your business down to the basic facts and everyday details of your business. What type of company is it? Retail? If so, what are you selling? And so on. Include the company’s formal name as well as any DBA’s (fictitious business names), and subsidiaries, as well as URLs  (domain names) you have secured. What is the company’s legal status? (Partnership, LLC, etc.) If this is a business plan for an existing business, give an overview of its existence and accomplishments to this point. You can also list prior funding and new monies sought here.

Market Analysis: In order to effectively sell products or serve customers, you need to know your target audience. This section identifies your customers, or how a diverse population of customers breaks down geographically or in other ways. For example: college students, single moms, urban professionals, dieters. Lenders, partners, and other interested parties will want proof that these populations exist in sufficient numbers and that you have what they want. This is also the place to describe market trends.

Marketing Plan: Your sales or marketing plan doesn’t have to be incredibly detailed, but you should have at least an outline and relatively clear vision of how you will reach your target market and/or sell your product or services. Be sure that somewhere in your business plan documents you include a realistic budget for advertising, promotion, social media, etc. (Summarize your plan for the Web/e-commerce.) Besides spelling out a plan to promote your business, determine how you wish to be positioned in the marketplace re: corporate values, reputation, slogan, etc.

Operations and Management Strategy: (If you will have a sizable management team, you may want to break that out into a separate section.) The operations plan lays out how your business will function day-to-day, and especially how it will make you compete in the marketplace. Address facilities, equipment, quality control, inventory, distribution, customer service and so on. List all founders. If this is for an existing business, be sure to explain any major changes in management composition.

Competitive Analysis: Along with knowing your target market, it’s important to know who else is targeting your market. The competitive analysis takes into account other businesses that are competing, or will compete, with yours, and their current share of the market. Look not only for businesses with a similar product or service, but also for those serving a similar audience. This information will prove invaluable not only as you submit your business plan, but well into the future. Demonstrate why customers will choose you.

Development Plan: Set out milestones you expect your business to reach within a set number of years, in multi-year increments. Be sure to include concrete dollar figures, sales numbers, employee counts, market share, building plans, and so on. Also address where you might ultimately take the company: Will you go public? Sell? Merge? Franchise? Do you have an exit strategy?

Financial Statements: Any savvy investor desires a Return On Investment (ROI) and will want to see a professional set of financials. Plus, they’re something you will need for your own tax and reference purposes anyway. In some cases, this is also where you will include a statement of how much money you are seeking, from which sources. Typically, the financial statements include: Assets, Liabilities, Net Worth, Annual Income, and Profit and Loss Forecast. BusinessPlanTemplate.net has many of these forms available for instant download.

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