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If you’re looking to start or grow your business, you need a business plan. With a business plan, you gain a bird’s eye view of your entire business and a clear roadmap for growth. You get clear priorities, develop accountability, can track results, manage your cash smartly, create and complete milestones, and manage change. You will gain strategic insight into your target market and product/service needs, and if needed, will have the document required to raise funding.
So what should your business plan include? The right business plan template for small businesses will include 10 elements that are completed honestly, realistically and thoroughly. Let us look at each of these 10 elements and what they should include. You can also visit Profitable Venture for more tips on how to write your business plan.
1) Executive summary
The executive summary is a summary (typically one or two-pages) providing readers with an overview of your business. Although this is the first element of your business plan, we suggest writing this at the end – that way, you can consolidate all the essential features you have put together. The critical elements of an executive summary are:
- The problem statement
- Your business idea
- Company history
- Target customer(s)/market
- Financial plan
- Management team
2) Company overview
If you are looking for investors, please bear in mind that the company overview allows them to assess your company and understand how you developed your business concept. Here, you will provide, in detail, information about your company’s history and mission and products/services. For your company’s history, consider including information like:
- The day you started your business
- The location of your business
- The origin of your business’ story
- Significant accomplishments (if an established business)
3) Industry analysis
Your readers might not be familiar with the industry within which your business operates. This section is designed to enlighten your reader on the industry’s performance at a local, national, and/or international level and how similar products/services perform within the industry. Create this section after conducting research from credible sources. Add necessary information (for example, statistics) from research reports to give your readers a clear idea of the industry. Include:
- Total market size
- Relevant market size
- Historical market growth
- Future market growth
- Market share estimates
- Market trends
4) Customer analysis
The customer analysis describes your target market – who your customers are, their buying behavior, the problems your ideal customers face, and how your products/services will solve those problems. Consider creating an ideal customer profile known as a customer avatar or ideal buyer profile while defining your perfect customer whose problem your business helps solve.
5) Competitive analysis
A competitive analysis is a detailed analysis and a comparison of your top competitors. In this section, you will also include the strengths and weaknesses of each competitor. As well as including your direct competitors (those who offer the same products/services as you do), consider including your indirect competitors (those who provide similar products). For example, if you sell pizzas, your direct competitors are other pizzerias. Your indirect competitors will be supermarkets, other restaurants and delis.
6) Marketing (as well as sales and promotion plan)
The marketing section of your business plan describes your strategy to promote and sell your products and services.
- Introduce each of your products/services and outline their benefits. Include a pricing strategy section as well.
- Explain your promotion plan – how you intend to attract customers.
- Explain your distribution plan – your strategy to bring your products/services to your clients. For example, you might consider using retail, direct, and wholesale distribution channels.
Before writing this section, ensure you research the best marketing channels for your location, clients, and business type.
7) Operations plan
The operations plan section will discuss the key processes and strategies required by your business.
Answer the following questions:
- What functions will your business need to run successfully?
- What project management tools will you use to most effectively operate your company?
- What milestones must be achieved to reach your long-term goals?
8) Management team
The management team section demonstrates to your readers that you have the human resources needed to run your business successfully. Include the following information:
- The key management personnel and information regarding their backgrounds.
- Information regarding your board of directors/advisors, if appropriate – who they are and their background.
- Any additional HR requirements that are needed to make your business successful.
9) Financial plan
This section is critical – especially if you’re looking for investors or lenders. In this section, you will include information regarding your revenue model and your sales forecast. You will also have information regarding how much money you need and the proposed use of funds (for example, using the money to invest in equipment, staffing, working capital, etc.).
The financial plan must include the following information:
- Sales forecast.
- An expenses budget.
- Cash flow statements.
- Income projections.
- Balance sheets (that show information on assets, equity, and liabilities).
The appendix is a collection of documents that supports all the information you have included in your business plan. Include:
- A complete set of financial projections
- Technical drawings, partnership letters, customer lists, etc. (if applicable)
Much work goes into creating a complete business plan. Whether you intend to develop your business plan for your customers, potential investors, or new employees – ensure it is thorough and honest. Fortunately, when completed, your business plan will dramatically improve your chances of success.