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"This book provides an interesting yet detailed insight about writing business plans. It utilises practical examples to explain the processes involved in writing a business plan: Recommended for undergraduate and postgraduate students, academics and practitioners." - Dr Ellis Osabutey, Senior Lecturer, Business School, Middlesex University London, UK
"A must have book for aspiring entrepreneurs, practioners, academicians and students alike – engaging, easy to follow and complex concepts have been explained in plain and simple English!" - Dr Lakshmi Narasimhan Vedanthachari, Senior Lecturer (Professional Practice), Middlesex University Business School.
"This book is practical and concise; and provides useful tips on writing a business plan. The book is suitable for students on business courses and also for budding entrepreneurs seeking finance. " - Dr Christopher J Moon FRSA FHEA, Senior Lecturer and multiple award winning eco and social entrepreneur
"This book offers a well needed and necessary step-by-step practical guide on effective business planning" - Dr Louise Boulter, Senior Lecturer, Business School, Middlesex University London, UK
Ignatius Ekanem is Senior Lecturer in Business Management at Middlesex University Business School, London. Dr Ekanem specialises in economic regeneration and small-business research, with particular focus on the financial management practices of small and medium-sized businesses.
Written by: Chloe West
Thinking about starting a business? One of the first steps you’ll need to take is to write a business plan. A business plan can help guide you through your financial planning, marketing strategy, unique selling point and more.
Making sure you start your new business off on the right foot is key, and we’re here to help. We’ve put together this guide to help you write your first business plan. Or, you can skip the guide and dive right into a business plan template .
Ready to get started?
Here’s a short selection of 8 easy-to-edit business plan templates you can edit, share and download with Visme. View more templates below:
What is a business plan, why is a business plan important, step #1: write your executive summary, step #2: put together your company description, step #3: conduct your market analysis, step #4: research your competition, step #5: outline your products or services, step #6: summarize your financial plan, step #7: determine your marketing strategy, step #8: showcase your organizational chart, 14 business plan templates to help you get started.
A business plan is a document that helps potential new business owners flesh out their business idea and put together a bird’s eye view of their business. Writing a business plan is an essential step in any startup’s ideation process.
Business plans help determine demographics, market analysis, competitive analysis, financial projections, new products or services, and so much more.
Each of these bits of information are important to have on hand when you’re trying to start a business or pitching investors for funds.
Here’s an example of a business plan that you can customize to incorporate your own business information.
We’re going to walk you through some of the most important parts of your business plan as well as how to write your own business plan in 8 easy steps.
If you’re in the beginning stages of starting a business , you might be wondering if it’s really worth your time to write out your business plan.
We’re here to tell you that it is.
A business plan is important for a number of reasons, but mostly because it helps to set you up for success right from the start.
Here are four reasons to prove to you why you need to start your business off on the right foot with a plan.
Putting together a business plan helps you to set your objectives for growth and make realistic goals while you begin your business.
By laying out each of the steps you need to take in order to build a successful business, you’re able to be more reasonable about what your timeline is for achieving everything as well as what your financial projections are.
The best way to set goals is using the SMART goals guidelines, outlined below.
Having a business plan helps you be more organized and strategic, improving the overall performance of your business as you start out. In fact, one study found that businesses with a plan grow 30% faster than businesses that don’t.
Doesn’t that sound reason enough alone to start out your business venture with a solidified plan? We thought so too, but we’ve still got two more reasons.
Starting a new business is uncharted territory. However, when you start with a roadmap for your journey, it makes it easier to see success and minimize the risks that come with startups.
Minimize risk and maximize profitability by documenting the most important parts of your business planning.
And finally, our last reason that business plans are so important is that if you plan to pitch investors for funding for your new venture, they’re almost always going to want to see a detailed business plan before deciding whether or not to invest.
You can easily create your business plan and investor pitch deck right here with Visme. Just sign up for a free account below to get started.
Sign up. It’s free.
The executive summary is a brief overview of your entire business plan, giving anyone who reads through your document a quick understanding of what they’re going to learn about your business idea.
However, you need to remember that some of the people who are going to read your business plan don’t want to or have time to read the entire thing. So your executive summary needs to incorporate all of the most important aspects of your plan.
Here’s an example of an executive summary from a business plan template you can customize and turn into your own.
Your executive summary should include:
One thing to note is that you should actually write your executive summary after the rest of your business plan so that you can properly summarize everything you’ve already created.
So at this point, simply leave a page blank for your executive summary so you can come back to it at the end of your business plan.
The next step is to write out a full description of your business and its core offerings. This section of your business plan should include your mission statement and objectives, along with your company history or overview.
In this section, you may also briefly describe your business formation details from a legal perspective.
Don’t spend too much time trying to craft this. Your mission statement is a simple “why” you started this business. What are you trying to achieve? Or what does your business solve?
This can be anything from one single quote or a paragraph, but it doesn’t need to be much longer than that. In fact, this could be very similar to your value proposition.
What are your goals? What do you plan to achieve in the first 90 days or one year of your business? What kind of impact do you hope to make on the market?
These are all good points to include in your objectives section so anyone reading your business plan knows upfront what you hope to achieve.
If you’re not launching a brand new business or if you’ve previously worked on another iteration of this business, let potential investors know the history of your company.
If not, simply provide an overview of your business, sharing what it does or what it will do.
Your third step is to conduct a market analysis so you know how your business will fit into its target market. This page in your business plan is simply meant to summarize your findings. Most of your time should be spent actually doing the research.
Your market analysis needs to look at things like:
Put together a summary of your market analysis and industry research in a 1-2 page format, like we see below.
Your next step is to conduct a competitive analysis. While you likely touched on this briefly during your market analysis, now is the time to do a deep dive so that you have a good grasp on what your competitors are doing and how they are generating customers.
Start by creating a profile of all your existing competitors, or at the very least, your closest competitors – the ones who are offering very similar products or services to you, or are in a similar vicinity (if you’re opening a brick and mortar store).
Focus on their strengths and what they’re doing really well so that you can emulate their best qualities in your own way. Then, look at their weaknesses and what your business can do better.
Take note of their current marketing strategy, including the outlets you see a presence, whether it’s on social media, you hear a radio ad, you see a TV ad, etc. You won’t always find all of their marketing channels, but see what you can find online and on their website.
After this, take a minute to identify potential competitors based on markets you might try out in the future, products or services you plan to add to your offerings, and more.
Then put together a page or two in your business plan that highlights your competitive advantage and how you’ll be successful breaking into the market.
Step five is to dedicate a page to the products or services that your business plans to offer.
Put together a quick list and explanation of what each of the initial product or service offerings will be, but steer clear of industry jargon or buzzwords. This should be written in plain language so anyone reading has a full understanding of what your business will do.
You can have a simple list like we see in the sample page above, or you can dive a little deeper. Depending on your type of business, it might be a good idea to provide additional information about what each product or service entails.
The next step is to work on the financial data of your new business. What will your overhead be? How will your business make money? What are your estimated expenses and profits over the first few months to a year? The expenses should cover all the spending whether they are recurring costs or just one-time LLC filing fees .
There is so much that goes into your financial plan for a new business, so this is going to take some time to compile. Especially because this section of your business plan helps potential cofounders or investors understand if the idea is even viable.
Your financial plan should include at least five major sections:
While these are the most common financial statements, you may discover that there are other sections that you want to include or that lenders may want to see from you.
You can automate the process of looking through your documents with an OCR API , which will collect the data from all your financial statements and invoices.
The next step is coming up with a successful marketing plan so that you can actually get the word out about your business.
Throughout your business plan, you’ve already researched your competitors and your target market, both of which are major components of a good marketing strategy. You need to know who you’re marketing to, and you want to do it better than your competition.
On this page or throughout this section of your business plan, you need to focus on your chosen marketing channels and the types of marketing content you plan to create.
Start by taking a look at the channels that your competitors are on and make sure you have a good understanding of the demographics of each channel as well. You don’t want to waste time on a marketing channel that your target audience doesn’t use.
Then, create a list of each of your planned marketing avenues. It might look something like:
Depending on the type of business you’re starting, this list could change quite a bit — and that’s okay. There is no one-size-fits-all marketing strategy, and you need to find the one that brings in the highest number of potential customers.
Your last section will be all about your leadership and management team members. Showcasing that you have a solid team right from the start can make potential investors feel better about funding your venture.
You can easily put together an organizational chart like the one below, with the founder/CEO at the top and each of your team leaders underneath alongside the department they’re in charge of.
Simply add an organizational chart like this as a page into your overall business plan and make sure it matches the rest of your design to create a cohesive document.
If you want to create a good business plan that sets your new business up for success and attracts new investors, it’s a good idea to start with a template.
We’ve got 14 options below from a variety of different industries for you to choose from. You can customize every aspect of each template to fit your business branding and design preferences.
If you're pressed for time, Visme's AI business plan generator can churn out compelling business plans in minutes. Just input a detailed prompt, choose the design, and watch the tool generate your plan in a few seconds.
This feminine and minimalistic business plan template is perfect for getting started with any kind of creative business. Utilize this template to help outline the step-by-step process of getting your new business idea up and running.
Looking for a more modern business plan design? This template is perfect for plainly laying out each of your business plans in an easy-to-understand format. Adjust the red accents with your business’s colors to personalize this template.
Creating a business and marketing plan for your nonprofit is still an essential step when you’re just starting out. You need to get the word out to increase donations and awareness for your cause.
If your business plan needs to rely heavily on showcasing photos of your products (like food), this template is perfect for you. Get potential investors salivating at the sight of your business plan, and they’re sure to provide the capital you need.
Serifs are in. Utilize this template with stunning serif as all the headers to create a contemporary and trendy business plan design that fits your business. Adjust the colors to match your brand and easily input your own content.
Creating a more kid-friendly or playful business? This business plan template has bold colors and design elements that will perfectly represent your business and its mission.
Use the pages you need, and remove any that you don’t. You can also duplicate pages and move the elements around to add even more content to your business plan.
This classic business plan template is perfect for a consulting business that wants to use a stunning visual design to talk about its services.
Customize this coffee shop business plan template to match your own business idea. Adjust the colors to fit your brand or industry, replace photos with your own photography or stock photos that represent your business, and insert your own logo, fonts and colors throughout.
A SaaS or service-based company also needs a solid business plan that lays out its financials, list of services, target market and more. This template is the perfect starting point.
Every startup or small business needs to start out with a strong business plan in order to start off on the right foot and set yourself up for success. This template is an excellent starting point for any small business.
An ecommerce business plan is ideal for planning out your pricing strategy of all of your online products, as well as the site you plan to use for setting up your store, whether WordPress, Shopify, Wix or something else.
Customize this template and make it your own! Edit and Download
This is another generic business plan template for any type of startup to customize. Switch out the content, fonts and colors to match your startup branding and increase brand equity.
Want just a quick business plan to get your idea going before you bite the bullet and map out your entire plan? This one-page template is perfect for those just starting to flesh out a new business idea.
This salon business plan template is easy on the design and utilizes a light color scheme to put more focus on the actual content. You can use the design as is or keep it as a basis for your own design elements.
Ready to write your business plan? Once you’ve created all of the most important sections, get started with a business plan template to really wow your investors and organize your startup plan.
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Chloe West is the content marketing manager at Visme. Her experience in digital marketing includes everything from social media, blogging, email marketing to graphic design, strategy creation and implementation, and more. During her spare time, she enjoys exploring her home city of Charleston with her son.
(6 reviews)
Lee Swanson, University of Saskatchewan
Copyright Year: 2017
Publisher: OPENPRESS.USASK.CA
Language: English
Conditions of use.
Learn more about reviews.
Reviewed by Kevin Heupel, Affiliate Faculty, Metropolitan State University of Denver on 3/4/20
The text does a good job of providing a general outline about writing and developing a written business plan. All of the important steps and components are included. However, the text is light on details, examples, and rationale for each element... read more
Comprehensiveness rating: 3 see less
The text does a good job of providing a general outline about writing and developing a written business plan. All of the important steps and components are included. However, the text is light on details, examples, and rationale for each element of the business plan. Some examples from actual business plans would be helpful.
Content Accuracy rating: 4
For the most part, the content is accurate. The content covers all important aspects of drafting a business plan. I thought the industry analysis could use more information about collecting primary and secondary sources; instead, this information was referenced in the marketing plan section.
Relevance/Longevity rating: 5
Most of the content relies on cites as far back as 2006; however, when it comes to developing and writing a business plan nothing has changed. Thus, the content is current and there is no concern about it becoming obsolete in the near future.
Clarity rating: 4
The text is clear. There are no difficult terms used and the writing is simple. The text uses a lot of bullet points though, which gets tedious to read for a few pages.
Consistency rating: 5
The text does a good job of maintaining consistency in terms of framework and terminology. The text is organized where it's easy to find the information you want in a quick manner.
Modularity rating: 3
The text has a lot of bullet points and the paragraphs are dense. However, the use of subheading is excellent.
Organization/Structure/Flow rating: 5
The book is organized as if you're writing a business plan from start to finish, which is helpful as a practical guide.
Interface rating: 5
There are no navigation problems, distortion of images/charts, or any other display features that may distract or confuse the reader.
Grammatical Errors rating: 5
The text is free of grammatical errors. The sentence structure is simple with many bullet points, which helps to avoid any grammatical issues.
Cultural Relevance rating: 5
This book was written by a Canadian professor and provides references to Canadian sources. However, the information in this text can be used for U.S. schools.
This book is very short and provides a good, general overview about the process of creating and writing a business plan. It won't help a reader if he/she is confused about a certain part of the business plan. The reader will have to find another source, such as "Preparing Effective Business Plans" by Bruce Barringer, Ph.D. The book provides links to good resources and a finished business plan that the reader can reference. I would recommend the book for undergraduate courses.
Reviewed by Kenneth Lacho, Professor of Management, The University of New Orleans on 6/19/18
1. Text is relevant to Canada. Not the United States 2. Needs to cover resources available to entrepreneur, e.g., federal government agencies, trade associations, chambers of commerce, economic development agencies. 3. Discuss local economy or... read more
1. Text is relevant to Canada. Not the United States 2. Needs to cover resources available to entrepreneur, e.g., federal government agencies, trade associations, chambers of commerce, economic development agencies. 3. Discuss local economy or economic area relevant to this proposed business. 4. Business model ok as a guide. 5. Suggested mission statement to cover: product/business, target customer, geographical area covered. 6. Need detailed promotion plan, e.g., personal selling, advertising, sales promotion, networking publicity, and social media. 7. How do you find the target market? 8. Chapter 6 too much detail on debt and equity financing. 9. Discuss how to find sources of financing, e.g., angels. 10. Expand coverage of bootstring, crowdfunding. 11. Chapter 4 – good checklist. 12. Chapter 3 - overlaps. 13. Chapter 7 – 3 pages of executive summary – double or single spaced typing. Number all tables, graphs. 14. Some references out-of-date, mostly academic. Bring in trade magazines such as Entrepreneur.
Content Accuracy rating: 5
In my opinion, the content is accurate and error free.
Relevance/Longevity rating: 4
The material is relevant to writing a business plan. I wonder if the Porter, SWOT VRIO, etc. material is too high level for students who may not be seniors or have non-business degrees (e.g., liberal arts). Porter has been around for a while and does have longevity. The author has to be more alert to changes in promotion, e.g., social media and sources of financing, e.g., crowdfunding.
Clarity rating: 3
As noted in No. 9, the tone of the writing is too academic, thus making the material difficult to understand. Paragraphs are too long. Need to define: Porter, TOWS Matrix, VRIO, PESTEL. A student less from a senior or a non-business major would not be familiar with these terms.
Consistency rating: 4
The text is internally consistent. The model approach helps keep the process consistent.
Modularity rating: 4
The process of developing a business plan is divided into blocks which are parts of the business plan. Paragraphs tend to be too long in some spots.
Organization/Structure/Flow rating: 4
The topics are presented in a logical step-wise flow. The language style is too academic in parts, paragraphs too long. Leaves out the citations. Provides excellent check lists.
There are no display features which confuse the reader.
Grammatical Errors rating: 4
The text has no grammatical errors. On the other hand, I found the writing to be too academic in nature. Some paragraphs are too long. The material is more like an academic conference paper or journal submission. Academic citations references are not needed. The material is not exciting to read.
The text is culturally neutral. There are no examples which are inclusive of a variety of races, ethnicities, and backgrounds.
This book best for a graduate class.
Reviewed by Louis Bruneau, Part Time Faculty, Portland Community College on 6/19/18
The text provides appropriate discussion and illustration of all major concepts and useful references to source and resource materials. read more
Comprehensiveness rating: 5 see less
The text provides appropriate discussion and illustration of all major concepts and useful references to source and resource materials.
Contents of the book were accurate, although it could have benefited from editing/proofreading; there was no evidence of bias. As to editing/proofreading, a couple of examples: A. “Figure 1 – Business Plan… “ is shown at the top of the page following the diagram vs. the bottom of the page the diagram is on. (There are other problems with what is placed on each page.) B. First paragraph under heading “Essential Initial Research” there is reference to pages 21 to 30 though page numbering is missing from the book. (Page numbers are used in the Table of Contents.)
The book is current in that business planning has been stable for sometime. The references and resources will age in time, but are limited and look easy to update.
Clarity rating: 5
The book is written in a straightforward way, technical terms that needed explanations got them, jargon was avoided and generally it was an easy read.
The text is internally consistent in terms of terminology and framework.
Modularity rating: 5
The book lends itself to a multi-week course. A chapter could be presented and students could work on that stage of Plan development. It could also be pre-meeting reading for a workshop presentation. Reorganizing the book would be inappropriate.
The topics in the text are presented in a logical, clear fashion.
Generally, the book is free of interface problems. The financial tables in the Sample Plan were turned 90° to maintain legibility. One potential problem was with Figure 6 – Business Model Canvas. The print within the cells was too small to read; the author mitigated the problem by presenting the information, following Figure 6, in the type font of the text.
I found no grammatical errors.
The text is not culturally insensitive or offensive in any way.
I require a business plan in a course I teach; for most of the students the assignment is a course project that they do not intend to pursue in real life. I shared the book with five students that intended to develop an actual start-up business; three of them found it helpful while the other two decided not to do that much work on their plans. If I were planning a start-up, I would use/follow the book.
Reviewed by Todd Johnson, Faculty of Business, North Hennepin Community College on 5/21/18
The text is a thorough overview of all elements of a business plan. read more
Comprehensiveness rating: 4 see less
The text is a thorough overview of all elements of a business plan.
The content is accurate and seems to lack bias.
Content seems relevant and useful . It does not help an entrepreneur generate ideas, and is very light on crowdfunding and other novel funding source content. It is more traditional. This can be easily updated in future versions, however. "Social Media" appears once in the book, as does "Crowd Funding".
The book is comprehensive, but perhaps not written in the most lucid, accessible prose. I am not sure any college student could pick this up and just read and learn. It would be best used as a "teach along guide" for students to process with an instructor.
The text seems consistent. The author does a nice job of consistently staying on task and using bullets and brevity.
Here I am not so certain. The table of contents is not a good guide for this book. It does make the book look nicely laid out, but there is a lot of complexity within these sections. I read it uncertain that it was well organized. Yes there are many good bits of information, however it is not as if I could spend time on one swathe of text at a time. I would need to go back and forth throughout the text.
Organization/Structure/Flow rating: 2
Similar to the above. I did not like the flow and organization of this. An editor would help things be in a more logical order.
Interface rating: 2
The interface is just OK. It is not an attractice interface, as it presents text in a very dense manner. The images and charts are hard to follow.
I did not find any grammatical errors.
Cultural Relevance rating: 4
I a not certain of the origins of Saskatchewan, but I do feel this is a different read. It is more formal and dense than it has to be. This would be a difficult read for my students. I do not feel it is insensitive in any way, or offensive in any way.
I would not adopt this book if given the chance. It is too dense, and not organized very well, even though the information is very good. The density and lack of modularity are barriers to understanding what is obviously very good information.
Reviewed by Mariana Mitova, Lecturer, Bowling Green State University on 2/1/18
Though this textbook has a prescriptive nature, it is quite comprehensive. The author strikes a good balance between presenting concepts in a concise way and providing enough information to explain them. Many every-day examples and live links to... read more
Though this textbook has a prescriptive nature, it is quite comprehensive. The author strikes a good balance between presenting concepts in a concise way and providing enough information to explain them. Many every-day examples and live links to other resources add to the completeness of the textbook.
Content seems accurate.
Since the content is somewhat conceptual, the text will not become obsolete quickly. In addition, the author seems to be updating and editing content often hence the relevance to current developments is on target.
The text is very clear, written in clear and straight-to-the point language.
The organization of content is consistent throughout the entire text.
The textbook is organized by chapters, beginning with overview of the model used and followed by chapters for each concept within the model. Nicely done.
The flow is clear, logical and easy to follow.
Overall, images, links, and text are well organized. Some headlines were misaligned but still easy to follow.
No concerns for grammar.
No concerns for cultural irrelevance.
Reviewed by Darlene Weibye, Cosmetology Instructor, Minnesota State Community and Technical College on 2/1/18
The text is comprehensive and covers the information needed to develop a business plan. The book provides all the means necessary in business planning. read more
The text is comprehensive and covers the information needed to develop a business plan. The book provides all the means necessary in business planning.
The text was accurate, and error-free. I did not find the book to be biased.
The content is up-to-date. I am reviewing the book in 2017, the same year the book was published.
The content was very clear. A business plan sample included operation timelines, start up costs, and all relevant material in starting a business.
The book is very consistent and is well organized.
The book has a table of contents and is broken down into specific chapters. The chapters are not divided into sub topics. I do not feel it is necessary for sub topics because the chapters are brief and to the point.
There is a great flow from chapter to chapter. One topic clearly leads into the next without repeating.
The table of contents has direct links to each chapter. The appearance of the chapters are easy to read and the charts are very beneficial.
Does not appear to have any grammatical errors.
The text is not culturally insensitive or offensive.
I am incorporating some of the text into the salon business course. Very well written book.
Introduction
References Appendix A – Business Plan Development Checklist and Project Planner Appendix B – Fashion Importers Inc. Business Plan Business Plan Excel Template
About the book.
This textbook and its accompanying spreadsheet templates were designed with and for students wanting a practical and easy-to-follow guide for developing a business plan. It follows a unique format that both explains what to do and demonstrates how to do it.
Dr. Lee Swanson is an Associate Professor of Management and Marketing at the Edwards School of Business at the University of Saskatchewan. His research focuses on entrepreneurship, social entrepreneurship, Aboriginal entrepreneurship, community capacity-building through entrepreneurship, and institutional-stakeholder engagement. Dr. Swanson’s current research is funded through a Social Sciences Humanities Research Council grant and focuses on social and economic capacity building in Northern Saskatchewan and Northern Scandinavia. He is also actively studying Aboriginal community partnerships with resource based companies, entrepreneurship centres at universities, community-based entrepreneurship, and entrepreneurial attitudes and intentions. He teaches upper-year and MBA entrepreneurship classes and conducts seminars on business planning and business development.
Inc. Best in Business Early-Rate Deadline Friday, August 16! Apply Today!
Thinking of starting a business here's the best step-by-step template for writing the perfect business plan when creating your startup..
Maybe you think you don't need a step-by-step guide to writing a great business plan . Maybe you think you don't need a template for writing a business plan. After all, some entrepreneurs succeed without writing a business plan. With great timing, solid business skills, entrepreneurial drive, and a little luck , some founders build thriving businesses without creating even an informal business plan .
But the odds are greater that those entrepreneurs will fail.
Does a business plan make startup success inevitable? Absolutely not. But great planning often means the difference between success and failure. Where your entrepreneurial dreams are concerned, you should do everything possible to set the stage for success.
And that's why a great business plan is one that helps you succeed .
The following is a comprehensive guide to creating a great business plan. We'll start with an overview of key concepts. Then we'll look at each section of a typical business plan:
Overview and objectives, products and services, market opportunities, sales and marketing.
Financial analysis.
So first let's gain a little perspective on why you need a business plan.
Many business plans are fantasies. That's because many aspiring entrepreneurs see a business plan as simply a tool--filled with strategies and projections and hyperbole--that will convince lenders or investors the business makes sense.
That's a huge mistake.
First and foremost, your business plan should convince you that your idea makes sense--because your time, your money, and your effort are on the line.
So a solid business plan should be a blueprint for a successful business . It should flesh out strategic plans, develop marketing and sales plans, create the foundation for smooth operations, and maybe--just maybe--persuade a lender or investor to jump on board.
For many entrepreneurs, developing a business plan is the first step in the process of deciding whether to actually start a business. Determining if an idea fails on paper can help a prospective founder avoid wasting time and money on a business with no realistic hope of success.
So, at a minimum, your plan should:
A good business plan delves into each of the above categories, but it should also accomplish other objectives. Most of all, a good business plan is convincing . It proves a case. It provides concrete, factual evidence showing your idea for a business is in fact sound and reasonable and has every chance of success.
Who must your business plan convince?
First and foremost, your business plan should convince you that your idea for a business is not just a dream but can be a viable reality. Entrepreneurs are by nature confident, positive, can-do people. After you objectively evaluate your capital needs, products or services, competition, marketing plans, and potential to make a profit, you'll have a much better grasp on your chances for success.
And if you're not convinced, fine: Take a step back and refine your ideas and your plans.
Who can your business plan convince?
1. Potential sources of financing. If you need seed money from a bank or friends and relatives, your business plan can help you make a great case. Financial statements can show where you have been. Financial projections describe where you plan to go.
Your business plan shows how you will get there. Lending naturally involves risk, and a great business plan can help lenders understand and quantity that risk, increasing your chances for approval.
2. Potential partners and investors. Where friends and family are concerned, sharing your business plan may not be necessary (although it certainly could help).
Other investors--including angel investors or venture capitalists--generally require a business plan in order to evaluate your business.
3. Skilled employees . When you need to attract talent, you need something to show prospective employees since you're still in the startup phase. Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those goals.
4. Potential joint ventures. Joint ventures are like partnerships between two companies. A joint venture is a formal agreement to share the work--and share the revenue and profit. As a new company, you will likely be an unknown quantity in your market. Setting up a joint venture with an established partner could make all the difference in getting your business off the ground.
But above all, your business plan should convince you that it makes sense to move forward.
As you map out your plan, you may discover issues or challenges you had not anticipated.
Maybe the market isn't as large as you thought. Maybe, after evaluating the competition, you realize your plan to be the low-cost provider isn't feasible since the profit margins will be too low to cover your costs.
Or you might realize the fundamental idea for your business is sound, but how you implement that idea should change. Maybe establishing a storefront for your operation isn't as cost-effective as taking your products directly to customers--not only will your operating costs be lower, but you can charge a premium since you provide additional customer convenience.
Think of it this way. Successful businesses do not remain static. They learn from mistakes, and adapt and react to changes: changes in the economy, the marketplace, their customers, their products and services, etc. Successful businesses identify opportunities and challenges and react accordingly.
Creating a business plan lets you spot opportunities and challenges without risk. Use your plan to dip your toe in the business water. It's the perfect way to review and revise your ideas and concepts before you ever spend a penny.
Many people see writing a business plan as a "necessary evil" required to attract financing or investors. Instead, see your plan as a no-cost way to explore the viability of your potential business and avoid costly mistakes.
Now let's look at the first section of your business plan: The Executive Summary.
The Executive Summary is a brief outline of the company's purpose and goals. While it can be tough to fit on one or two pages, a good Summary includes:
I know that seems like a lot, and that's why it's so important you get it right. The Executive Summary is often the make-or-break section of your business plan.
A great business solves customer problems. If your Summary cannot clearly describe, in one or two pages, how your business will solve a particular problem and make a profit, then it's very possible the opportunity does not exist--or your plan to take advantage of a genuine opportunity is not well developed.
So think of it as a snapshot of your business plan. Don't try to "hype" your business--focus on helping a busy reader get a great feel for what you plan to do, how you plan to do it, and how you will succeed.
Since a business plan should above all help you start and grow your business, your Executive Summary should first and foremost help you do the following.
1. Refine and tighten your concept.
Think of it as a written elevator pitch (with more detail, of course). Your Summary describes the highlights of your plan, includes only the most critical points, and leaves out less important issues and factors.
As you develop your Summary, you will naturally focus on the issues that contribute most to potential success. If your concept is too fuzzy, too broad, or too complicated, go back and start again. Most great businesses can be described in several sentences, not several pages.
2. Determine your priorities.
Your business plan walks the reader through your plan. What ranks high in terms of importance? Product development? Research? Acquiring the right location? Creating strategic partnerships?
Your Summary can serve as a guide to writing the rest of your plan.
3. Make the rest of the process easy.
Once your Summary is complete, you can use it as an outline for the rest of your plan. Simply flesh out the highlights with more detail.
Then work to accomplish your secondary objective by focusing on your readers. Even though you may be creating a business plan solely for your own purposes, at some point you may decide to seek financing or to bring on other investors, so make sure your Summary meets their needs as well. Work hard to set the stage for the rest of the plan. Let your excitement for your idea and your business shine through.
In short, make readers want to turn the page and keep reading. Just make sure your sizzle meets your steak by providing clear, factual descriptions.
How? The following is how an Executive Summary for a bicycle rental store might read.
Introduction
Blue Mountain Cycle Rentals will offer road and mountain bike rentals in a strategic location directly adjacent to an entrance to the George Washington National Forest. Our primary strategy is to develop Blue Mountain Cycle Rentals as the most convenient and cost-effective rental alternative for the thousands of visitors who flock to the area each year.
Once underway, we will expand our scope and take advantage of high-margin new equipment sales and leverage our existing labor force to sell and service those products. Within three years we intend to create the area's premier destination for cycling enthusiasts.
Company and Management
Blue Mountain Cycle Rentals will be located at 321 Mountain Drive, a location providing extremely high visibility as well as direct entry and exit from a primary national park access road. The owner of the company, Marty Cycle, has over 20 years experience in the bicycle business, having served as a product manager for Acme Cycles as well as the general manager of Epic Cycling.
Because of his extensive industry contacts, initial equipment inventory will be purchased at significant discounts from OEM suppliers as well by sourcing excess inventory from shops around the country.
Because of the somewhat seasonal nature of the business, part-time employees will be hired to handle spikes in demand. Those employees will be attracted through competitive wages as well as discounts products and services.
460,000 people visited the George Washington National Forest during the last 12 months. While the outdoor tourism industry as a whole is flat, the park expects its number of visitors to grow over the next few years.
The market potential inherent in those visitors is substantial. According to third-party research data, approximately 30 percent of all cyclists would rather rent than transport their own bicycles, especially those who are visiting the area for reasons other than cycling.
Competitive Advantages
The cycling shops located in Harrisonburg, VA, are direct and established competitors. Our two primary competitive advantages will be location and lower costs.
Our location is also a key disadvantage where non-park rentals are concerned. We will overcome that issue by establishing a satellite location in Harrisonburg for enthusiasts who wish to rent bicycles to use in town or on other local trails.
We will also use online tools to better engage customers, allowing them to reserve and pay online as well as create individual profiles regarding sizes, preferences, and special needs.
Financial Projections
Blue Mountain Cycle Rentals expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:
We project first-year revenue of $720,000 and a 10 percent growth rate for the next two years. Direct cost of sales is projected to average 60 percent of gross sales, including 50 percent for the purchase of equipment and 10 percent for the purchase of ancillary items. Net income is projected to reach $105,000 in year three as sales increase and operations become more efficient.
And so on ...
Keep in mind this is just a made-up example of how your Summary might read. Also keep in mind this example focused on the rental business, so a description of products was not included. (They'll show up later.) If your business will manufacture or sell products, or provide a variety of services, then be sure to include a Products and Services section in your Summary. (In this case the products and services are obvious, so including a specific section would be redundant.)
Bottom line: Provide some sizzle in your Executive Summary, but make sure you show a reasonable look at the steak, too.
Providing an overview of your business can be tricky, especially when you're still in the planning stages. If you already own an existing business, summarizing your current operation should be relatively easy; it can be a lot harder to explain what you plan to become .
So start by taking a step back.
Think about what products and services you will provide, how you will provide those items, what you need to have in order to provide those items, exactly who will provide those items, and most important, whom you will provide those items to.
Consider our bicycle rental business example. It's serves retail customers. It has an online component, but the core of the business is based on face-to-face transactions for bike rentals and support.
So you'll need a physical location, bikes, racks and tools and supporting equipment, and other brick-and-mortar related items. You'll need employees with a very particular set of skills to serve those customers, and you'll need an operating plan to guide your everyday activities.
Sound like a lot? It boils down to:
In our example, defining the above is fairly simple. You know what you will provide to meet your customer's needs. You will of course need a certain quantity of bikes to service demand, but you will not need a number of different types of bikes. You need a retail location, furnished to meet the demands of your business. You need semi-skilled employees capable of sizing, customizing, and repairing bikes.
And you know your customers: cycling enthusiasts.
In other businesses and industries, answering the above questions can be more difficult. If you open a restaurant, what you plan to serve will in some ways determine your labor needs, the location you choose, the equipment you need to purchase. And, most important, it will help define your customer. Changing any one element may change other elements; if you cannot afford to purchase expensive kitchen equipment, you may need to adapt your menu accordingly. If you hope to attract an upscale clientele, you may need to invest more in purchasing a prime location and creating an appealing ambience.
So where do you start? Focus on the basics first:
If you are still stuck, try answering these questions. Some may pertain to you; others may not.
Once you work through this list you will probably end up with a lot more detail than is necessary for your business plan. That is not a problem: Start summarizing the main points. For example, your Business Overview and Objectives section could start something like this:
History and Vision
Blue Mountain Cycle Rentals is a new retail venture that will be located at 321 Mountain Drive, directly adjacent to an extremely popular cycling destination. Our initial goal is to become the premier provider for bicycle rentals. We will then leverage our customer base and position in the market to offer new equipment sales as well as comprehensive maintenance and service, custom equipment fittings, and expert trail advice.
Keys to Success
You could certainly include more detail in each section; this is simply a quick guide. And if you plan to develop a product or service, you should thoroughly describe the development process as well as the end result.
The key is to describe what you will do for your customers--if you can't, you won't have any customers.
In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide.
Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended. Use simple terms and avoid industry buzzwords.
On the other hand, describing how the company's products and services will differ from the competition is critical. So is describing why your products and services are needed if no market currently exists. (For example, before there was Federal Express, overnight delivery was a niche business served by small companies. FedEx had to define the opportunity for a new, large-scale service and justify why customers needed--and would actually use --that service.)
Patents, copyrights, and trademarks you own or have applied for should also be listed in this section.
Depending on the nature of your business, your Products and Services section could be very long or relatively short. If your business is product-focused, you will want to spend more time describing those products.
If you plan to sell a commodity item and the key to your success lies in, say, competitive pricing, you probably don't need to provide significant product detail. Or if you plan to sell a commodity readily available in a variety of outlets, the key to your business may not be the commodity itself but your ability to market in a more cost-effective way than your competition.
But if you're creating a new product (or service), make sure you thoroughly explain the nature of the product, its uses, and its value, etc.--otherwise your readers will not have enough information to evaluate your business.
Key questions to answer:
In the cycling rental business example we've been using, products and services could be a relatively simple section to complete or it could be fairly involved. It depends on the nature of the products the company plans to rent to customers.
If Blue Mountain Cycling Rentals plans to market itself as a provider of high-end bikes, describing those bikes--and the sources for those bikes--is important, since "high-end cycling rentals" is intended to be a market differentiation. If the company plans to be the low-cost provider, then describing specific brands of equipment is probably not necessary.
Also, keep in mind that if a supplier runs out of capacity--or goes out of business altogether--you may not have a sufficient supply to meet your demand. Plan to set up multiple vendor or supplier relationships, and describe those relationships fully.
Remember, the primary goal of your business plan is to convince you that the business is viable--and to create a road map for you to follow.
The Products and Services section for our cycling rental business could start something like this:
Product Description
Blue Mountain Cycle Rentals will provide a comprehensive line of bicycles and cycling equipment for all ages and levels of ability. Since the typical customer seeks medium-quality equipment and excellent services at competitive prices, we will focus on providing brands like Trek bikes, Shimano footwear, and Giro helmets. These manufacturers have a widespread reputation as mid- to high-level quality, unlike equipment typically found in the rental market.
The following is a breakdown of anticipated rental price points, per day and per week:
Competition
Blue Mountain Cycle Rentals will have clear advantages over its primary competitors, the bike shops located in Harrisonburg, VA:
Future Products
Expansion will allow us to move product offerings into new equipment sales. We will also explore maintenance and fitting services, leveraging our existing maintenance staff to provide value-added services at a premium price.
When you draft your Products and Services section, think of your reader as a person who knows little to nothing about your business. Be clear and to the point.
Think of it this way: The Products and Services section answers the "what" question for your business. Make sure you fully understand the "what" factor; you may run the business, but your products and services are its lifeblood.
Market research is critical to business success. A good business plan analyzes and evaluates customer demographics, purchasing habits, buying cycles, and willingness to adopt new products and services.
The process starts with understanding your market and the opportunities inherent in that market. And that means you'll need to do a little research. Before you start a business you must be sure there is a viable market for what you plan to offer.
That process requires asking, and more importantly answering, a number of questions. The more thoroughly you answer the following questions, the better you will understand your market.
Start by evaluating the market at a relatively high level, answering some high-level questions about your market and your industry:
Fortunately, you've already done some of the legwork. You've already defined and mapped out your products and services. The Market Opportunities section provides a sense-check of that analysis, which is particularly important since choosing the right products and services is such a critical factor in business success.
But your analysis should go further: Great products are great, but there still must be a market for those products. (Ferraris are awesome, but you're unlikely to sell many where I live.)
So let's dig deeper and quantify your market. Your goal is to thoroughly understand the characteristics and purchasing ability of potential customers in your market. A little Googling can yield a tremendous amount of data.
For the market you hope to serve, determine:
The key is to understand the market in general terms and then to dig deeper to understand whether there are specific segments within that market--the segments you plan to target--that can become customers and support the growth of your business.
Also keep in mind that if you plan to sell products online the global marketplace is incredibly crowded and competitive. Any business can sell a product online and ship that product around the world. Don't simply assume that just because "the bicycle industry is a $62 billion business" (a number I just made up) that you can capture a meaningful percentage of that market.
On the other hand, if you live in an area with 50,000 people and there's only one bicycle shop, you may be able to enter that market and attract a major portion of bicycle customers in your area.
Always remember it's much easier to serve a market you can define and quantify.
After you complete your research you may feel a little overwhelmed. While data is good, and more data is great, sifting through and making sense of too much data can be daunting.
For the purposes of your business plan, narrow your focus and focus on answering these main questions:
The Market Opportunities section for our cycling rental business could start something like this:
Market Summary
Consumer spending on cycling equipment reached $9,250,000 in the states of VA, WV, MD, and NC last year. While we expect sales to rise, for the purposes of performing a conservative analysis we have projected a zero growth rate for the next three years.
In those states 2,500,000 people visited a national forest last year. Our target market includes customers visiting the Shenandoah National Forest; last year 120,000 people visited the area during spring, summer, and fall months.
Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. In particular we forecast a spike in demand in 2015 since the national road racing championships will be held in Richmond, VA.
Market Trends
Participation and population trends favor our venture:
Market Growth
According to the latest studies, recreation spending in our target market has grown by 14 percent per year for the past three years.
In addition, we anticipate greater than industry-norm growth rates for cycling in the area due to the increase in popularity of cycling events like the Alpine Loop Gran Fondo.
Market Needs
Out target market has one basic need: The availability to source bicycle rentals at a competitive price. Our only other competition are the bike shops in Harrisonburg, VA, and our location will give us a competitive advantage over those and other companies who try to serve our market.
You may want to add other categories to this section based on your particular industry.
For example, you might decide to provide information about Market Segments. In our case, the cycling rental business does not require much segmentation. Rentals are typically not broken down into segments like "inexpensive," "midrange," and "high-end." For the most part rental bikes are more of a commodity. (Although you'll notice in our Products and Services section, we decided to provide "high-end" rentals.)
But say you decide to open a clothing store. You could focus on high fashion, or children's clothes, or outdoor wear, or casual--you could segment the market in a number of ways. If that's the case, provide detail on segmentation that supports your plan.
The key is to define your market--and then show how you will serve your market.
Providing great products and services is wonderful, but customers must actually know those products and services exist. That's why marketing plans and strategies are critical to business success. (Duh, right?)
But keep in mind marketing is not just advertising. Marketing--whether advertising, public relations, promotional literature, etc.--is an investment in the growth of your business.
Like any other investment you would make, money spent on marketing must generate a return. (Otherwise why make the investment?) While that return could simply be greater cash flow, good marketing plans result in higher sales and profits.
So don't simply plan to spend money on a variety of advertising efforts. Do your homework and create a smart marketing program .
Here are some of the basic steps involved in creating your marketing plan:
Then focus on providing detail and backup for your marketing plan.
The Sales and Marketing section for our cycling rental business could start something like this:
Target Market
The target market for Blue Mountain Cycling Rentals is western VA, eastern WV, southwestern MD, and northern NC. While customers in the counties surrounding the George Washington National Forest make up 35 percent of our potential customer base, much of our market travels from outside that geographic area.
Marketing Strategy
Our marketing strategy will focus on three basic initiatives:
Pricing Strategy
We will not be the low-cost provider for our target market. Our goal is to provide mid- to high-end equipment. However, we will create web-based loyalty programs to incent customers to set up online profiles and reserve and renew equipment rentals online, and provide discounts for those who do. Over time we will be able to market specifically to those customers.
Just as in the Market Opportunity section, you may want to include a few more categories. For example, if your business involves a commission-compensated sales force, describe your Sales Programs and incentives. If you distribute products to other companies or suppliers and those distribution efforts will impact your overall marketing plans, lay out your Distribution Strategy.
The key is to show you understand your market and you understand how you will reach your market. Marketing and promotions must result in customers--your goal is to thoroughly describe how you will acquire and keep your customers.
Also keep in mind you may want to include examples of marketing materials you have already prepared, like website descriptions, print ads, web-based advertising programs, etc. While you don't need to include samples, taking the time to create actual marketing materials might help you better understand and communicate your marketing plans and objectives.
Make sure your Sales and Marketing section answers the "How will I reach my customers?" question.
The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.
Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows. While you don't need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you plan to run only a small business.
In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.
Competitive analysis can be incredibly complicated and time-consuming, but it doesn't have to be. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.
Profile Current Competitors
First, develop a basic profile of each of your current competition. For example, if you plan to open an office supply store, you may have three competing stores in your market.
Online retailers will also provide competition, but thoroughly analyzing those companies will be less valuable unless you also decide you want to sell office supplies online. (Although it's also possible that they--or, say, Amazon--are your real competition. Only you can determine that.)
To make the process easier, stick to analyzing companies you will directly compete with. If you plan to set up an accounting firm, you will compete with other accounting firms in your area. If you plan to open a clothing store, you will compete with other clothing retailers in your area.
Again, if you run a clothing store, you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to distinguish yourself in other ways: great service, friendly salespeople, convenient hours, truly understanding your customers, etc.
Once you identify your main competitors, answer these questions about each one. And be objective. It's easy to identify weaknesses in your competition, but less easy (and a lot less fun) to recognize how they may be able to outperform you:
While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses--if you know your market and your industry.
To gather information, you can also:
Keep in mind competitive analysis does more than help you understand your competition. Competitive analysis can also help you identify changes you should make to your business strategies. Learn from competitor strengths, take advantage of competitor's weaknesses, and apply the same analysis to your own business plan.
You might be surprised by what you can learn about your business by evaluating other businesses.
Identify Potential Competitors
It can be tough to predict when and where new competitors may pop up. For starters, regularly search for news on your industry, your products, your services, and your target market.
But there are other ways to predict when competition may follow you into a market. Other people may see the same opportunity you see. Think about your business and your industry, and if the following conditions exist, you may face competition does the road:
In general terms, if serving your market seems easy you can safely assume competitors will enter your market. A good business plan anticipates and accounts for new competitors.
Now distill what you've learned by answering these questions in your business plan:
The Competitive Analysis section for our cycling rental business could start something like this:
Primary Competitors
Our nearest and only competition is the bike shops in Harrisonburg, VA. Our next closest competitor is located over 100 miles away.
The in-town bike shops will be strong competitors. They are established businesses with excellent reputations. On the other hand, they offer inferior-quality equipment and their location is significantly less convenient.
Secondary Competitors
We do not plan to sell bicycles for at least the first two years of operation. However, sellers of new equipment do indirectly compete with our business since a customer who buys equipment no longer needs to rent equipment.
Later, when we add new equipment sales to our operation, we will face competition from online retailers. We will compete with new equipment retailers through personalized service and targeted marketing to our existing customer base, especially through online initiatives.
Opportunities
While your business plan is primarily intended to convince you that your business makes sense, keep in mind most investors look closely at your competitive analysis. A common mistake made by entrepreneurs is assuming they will simply "do it better" than any competition.
Experienced businesspeople know you will face stiff competition: showing you understand your competition, understand your strengths and weaknesses relative to that competition, and that you understand you will have to adapt and change based on that competition is critical.
And, even if you do not ever plan to seek financing or bring in investors, you absolutely must know your competition.
The Competitive Analysis section helps you answer the "Against whom?" question.
The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability . Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory--all the stuff involved in operating your business on a day-to-day basis.
Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will run their businesses.
Your goal is to answer the following key questions:
Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:
Location and Facility Management
In terms of location, describe:
Daily Operations
Personnel Requirements
Sound like a lot? It can be, but not all of the above needs to be in your business plan.
You should think through and create a detailed plan for each category, but you won't need to share the results with the people who read your business plan
Working through each issue and developing concrete operations plans helps you in two major ways:
Think of Operations as the "implementation" section of your business plan. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense.
That way the operations section answers the "How?" question.
Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a new business.
But putting work into the Management Team section will not only benefit people who may read your plan. It will also help you evaluate the skills, experiences, and resources your management team will need . Addressing your company's needs during implementation will make a major impact on your chances for success.
The Management Team section for our cycling rental business could start something like this:
Jim Rouleur, Owner and Manager
Joe has over 20 years experience in the cycling business. He served for 10 years as a product manager for Acme Bikes. After that he was the operations manager of Single Track Cycles, a full-service bike shop located in Bend, Oregon. He has an undergraduate degree in marketing from Duke University and an MBA from Virginia Commonwealth University. (A complete resume for Mr. Rouleur can be found in the Appendix.)
Mary Gearset, Assistant Manager
Mary was the 2009 U.S. Mountain Biking National Champion. She worked in product development for High Tec frames, creating custom frames and frame modifications for professional cyclists. She also has extensive customer service and sales experience, having worked for four years as the online manager of Pro Parts Unlimited, an online retailer of high-end cycling equipment and accessories.
In some instances you may also wish to describe your staffing plans.
For example, if you manufacture a product or provide a service and will hire a key skilled employee, describe that employee's credentials. Otherwise, include staffing plans in the Operations section.
One key note: Don't be tempted to add a "name" to your management team in hopes of attracting investors. Celebrity management team members may attract the attention of your readers, but experienced lenders and investors will immediately ask what role that person will actually play in the running of the business--and in most cases those individuals won't play any meaningful role.
If you don't have a lot of experience--but are willing to work hard to overcome that lack of experience--don't be tempted to include people in your plan who will not actually work in the business.
If you can't survive without help, that's okay. In fact, that's expected; no one does anything worthwhile on their own. Just make plans to get help from the right people.
Finally, when you create your Management section, focus on credentials but pay extra attention to what each person actually will do . Experience and reputation are great, but action is everything.
That way your Management section will answer the "Who is in charge?" question.
Numbers tell the story. Bottom line results indicate the success or failure of any business.
Financial projections and estimates help entrepreneurs, lenders, and investors or lenders objectively evaluate a company's potential for success. If a business seeks outside funding, providing comprehensive financial reports and analysis is critical.
But most important, financial projections tell you whether your business has a chance of being viable--and if not let you know you have more work to do.
Most business plans include at least five basic reports or projections:
It's easy to find examples of all of the above. Even the most basic accounting software packages include templates and samples. You can also find templates in Excel and Google Docs. (A quick search like "google docs profit and loss statement" yields plenty of examples.)
Or you can work with an accountant to create the necessary financial projections and documents. Certainly feel free to do so, but first play around with the reports yourself. While you don't need to be an accountant to run a business, you do need to understand your numbers, and the best way to understand your numbers is usually to actually work with your numbers.
But ultimately the tools you use to develop your numbers are not as important as whether those numbers are as accurate as possible--and whether those numbers help you decide whether to take the next step and put your business plan into action.
Then Financial Analysis can help you answer the most important business question: "Can we make a profit?"
Some business plans include less essential but potentially important information in an Appendix section. You may decide to include, as backup or additional information:
Keep in mind creating an Appendix is usually only necessary if you're seeking financing or hoping to bring in partners or investors. Initially the people reading your business plan don't wish to plow through reams and reams of charts, numbers, and backup information. If one does want to dig deeper, fine--he or she can check out the documents in the Appendix.
That way your business plan can share your story clearly and concisely.
Otherwise, since you created your business plan, you should already have the backup.
While you may use your business plan to attract investors, partners, suppliers, etc., never forget that the goal of your business plan is to convince you that your idea makes sense.
Because ultimately it's your time, your money, and your effort on the line.
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Blog / Small business tips / How to create a business plan: A complete guide to writing your company roadmap
A business plan is a roadmap that outlines what your business does, how it’s going to work and how you’re going to achieve your goals.
According to Bplans , who worked with the University of Oregon to analyse academic research around planning, entrepreneurs who take the time to create a plan for their business idea are 152% more likely to start that business.
Further, 129% are more likely to push forward with it beyond the start-up phase. And companies that strategically plan grow 30% faster than those that don’t.
In this guide, we’re going to walk you through how to write a business plan that helps your company start, build and achieve success.
What is a business plan and why do you need one, the nine key components of a business plan and how to write them.
Wrapping up.
A business plan is a document that guides you through the various stages of building, launching and running your business. Essentially, it helps you put the building blocks in place to make your company a success.
If you’re bringing a new small business to market, a business plan will be crucial in:
All banks and most investors and venture capitalists will only invest in a business if they can see that they’ll get their money back. They want to know that you have the business idea, team, scalability and planned sales growth to succeed. A business plan gives financiers the details they need to make informed decisions.
Similarly, for talent or prospective partners, a business plan is your assurance to them that your business matches their short and long-term career ambitions.
A business plan also keeps you focused on what you need to do to accomplish your goals. If you’re not meeting your targets, you can turn to your business plan to help guide you on changes that need to be made. It’s the drawing board you can always go back to.
Because of this, having a business plan is as important for existing businesses as it is for start-ups.
Top Tip: Business plans also apply to side hustles. Even if you have a full-time job or already run a small business, a side hustle can be a great way to pull in extra income or capitalise on a hobby. But just because it doesn’t take up all of your time doesn’t mean it should lack structure. To learn more about how to effectively run a side business, read our guide to 5 side businesses you can start quickly and affordably 💡
According to Growthink surveys, 15 to 25 pages is the optimum business plan length. But the number of pages isn’t the ideal way to measure length.
As Bplans points out: “A 20-page business plan with dense text and no graphics is much longer than a 35-page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections.”
Instead, Bplans says that your business plan should:
Your business plan is designed to evolve as your business grows. It’s a living document that should be consistently tweaked to match the health and goals of your company. Because of this, it’s best to keep your plan as a digital document that can be easily updated and sent to third parties as a PDF.
That said, there may be times when your plan needs to be presented to investors or bank managers in person, so it should always be print-ready with a front cover that includes your:
It should also have a contents page, with numbered pages and sections so that readers can easily find what they’re looking for.
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A business plan features nine main sections related to your business operations, structure and finances:
Let’s take a closer look at each.
The executive summary is a top-level look at your business that summarises the detailed information found in the rest of the sections.
It’s also your elevator pitch—a chance for you to immediately captivate the reader by portraying your mission, vision, goals, product, leadership, finance information and growth plans.
Picture yourself in a lift for 45 seconds with a potential investor. How would you sell your business? Think about that when writing this section. Be concise and compelling with your words.
Because it is a summary, it’s often easier to write this section last after you’ve fleshed out the finer details of your business plan .
Start with the basic information:
Then, get into the business information.
As mentioned above, before you can write this section you have to flesh out all of your company details, including who you are, who you’re selling to, how you’re going to sell your product or service, what your financial goals are, how you will reach those financial goals, and so on.
The rest of this article will inform you on how to do just that.
The company description is your story. It digs deeper into your value proposition, looking at how you came to be and what you intend to achieve.
Break your description down into three sections:
Company profile, business objectives.
Your mission statement is a sentence or short paragraph that describes why your business exists.
To create your mission statement, answer the following questions:
For example, Patagonia’s mission statement is “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
In a single sentence, they get across their aims and ambitions, their value to the market (safe, quality products) and their value to people and the world (helping the environment).
Use this as inspiration to come up with a statement that captures the heart and soul of your business.
Top Tip: Your company description will also help to inform your business culture. You will carry these core values throughout all of your business behaviours and they will also influence how you make future business decisions. Because of this, it’s crucial to devote the necessary time and energy to get this right. To learn exactly how to do that, read our guide on why business culture matters & how to get it right from the start ☀️
In a paragraph or two, your company profile should detail your:
The information is the most important thing here, so approach it like a business profile and stick to the facts and figures.
In a paragraph or two explain what you want to achieve as a business. This needs to be a realistic aim that investors can get behind and your team members can work towards.
The SMART goals method can help you to ensure your goals are practical.
SMART stands for: Specific, Measurable, Attainable, Relevant, and Timely.
Use graphs to add weight to your objectives. For example, if you aim to increase revenue from £100,000 in year one to £500,000 by year five, create a chart that plots your growth. The visual aspect helps to grab attention whilst providing readers with key information they may miss if skim reading.
This chart from an example business plan does just that:
You’re immediately drawn to the planned-growth projections and want to learn about how they’ll reach such high goals. We will get into the specifics of how to create accurate sales and revenue forecasts in a later section.
Top Tip: To learn more about how to establish practical SMART goals that will inform your business strategy and help you effectively market your brand, read our beginners guide to digital marketing strategy .
Marketing analysis focuses on three areas:
By detailing information about the themes and trends within your industry, you’ll be able to show that the appetite for your product or service exists. Outlining information about your ideal customer helps you to identify the marketing and sales tactics you can use to attract them. And highlighting your competitor’s strengths and weaknesses gives you a chance to showcase what you do better than the rest.
Market analysis should identify the market as a whole, as well as your addressable market and your share of the market. From this information, you can begin to get an idea of your target market, which informs your messaging, positioning and unique selling point (USP).
Start by researching the current state of your industry and where the market is heading in terms of size, trends and projected growth.
Your approach here will depend on your business. For example, if you’re opening a small local shop, you should assess the market around your shop. If you’re starting an ecommerce business and selling UK-wide, you’ll need to analyse the market at a national level.
When estimating market size, look at:
You can find this information by searching for publicly available data or by commissioning a market research report. If you’re searching on a national level, you may find figures published online. On a local level, data might not be as easy to come by, which is where you’ll need to carry out your own research.
Top Tip: Conducting market research takes time, but it’s important that you get a full picture of your audience to ensure your message and USP resonates. To learn more, read our detailed guide on how to conduct market research for your business idea ⚡️
Once you have the information, you can use TAM SAM SOM to work out your business’ relationship to the market size.
Your ideal customer is the person your product or service is aimed at. In the above example of the women’s clothes shop, the ideal customer is between 18 and 35, with disposable income.
Customer analysis digs deeper than this, looking at your target customers’ education, income, job, relationship, buying concerns, interests and more.
You’ll find methods to help you discover your ideal customer and create customer personas in our guide on how to create a go-to-market strategy .
Competitive analysis is the process of identifying gaps in the market that your product or service can fill. It’s about finding out what the competition does so you gain a competitive advantage.
In our guide on how to run a competitive analysis , we walk you through the process of analysing the finer details of your rivals in five steps:
Step 1: Identify & segment your competitors
Step 2: Analyse their market positioning
Step 3: Review their content & social media
Step 4: Check out what their customers are saying
Step 5: Walk through their customer journey
Use this information to show potential investors and talent that your business is going places. Our competitive analysis matrix template is a great starting point.
Once complete, take it a step further and create a simple visual that clearly shows where your company outperforms the competition. Here is a basic example of how to build out this visual.
It’s hard to ignore a chart that checks all of the boxes.
This section goes into detail on how your company is structured and who is running it.
The structure here means two different things:
Company structure.
First, you need to show your management structure: what each leader’s role is within the company.
The simplest way to show your company hierarchy is with an organisational chart like this example:
For each member of your team, give details on their background and credentials with a bio that includes their:
Including this information gives readers assurances that the team you have in place is well-positioned to take the company forward.
If there are any roles yet to be filled, give details on those positions.
Company structure is your legal structure. For example, limited company or sole trader.
Top Tip: If you’re yet to decide on a business structure, you can weigh up the pros and cons for setting up as a sole trader or limited company in our sole trader vs limited company guide.
If you plan on changing the structure of your company in the future, include details on this as well. For example, you may start as a private limited company (Ltd), but grow to become a public limited company with shares offered to members of the public.
Here is where you get to wax lyrical about your offer and why it’s better than anything currently on the market.
This section should include:
Top Tip: Choosing the right pricing strategy is another key part of your go-to-market strategy. Will you price higher, lower, or similar to your competitors? What does the market demand? How does your pricing strategy reflect the value of your products and services? To learn more about how to answer these questions, read our 6-step guide on how to price a product and achieve profitable markups 💷
While there are formal and practical details to get across, the main point of this section is to get the reader excited about your product. To do this:
Coffee subscription | Monthly coffee delivery | Convenience and personalization | Higher quality coffee based on your taste, delivered |
HR software | End-to-end people management | No need for multiple tools | Manage your people ops from one place |
City bicycle | Made from lighter steel | Easier to carry and manoeuvre | The perfect bike for city commuting |
If your business is going to be a success, you need a marketing strategy and sales plan that takes customers on a journey from awareness to purchase.
This section of your business plan should include:
Funding information is all about how much money you need to start your business, why you need it and how you’ll use any capital.
The most critical part of this is your startup costs, which detail:
Top Tip: If you’re yet to work out how much capital you need, check out our guide on how much it costs to start a business in the UK 📌
If you have the figures in place, you can set out presenting them.
This section should be broken down into three parts:
How funds will be used, current and future financial plans.
Include how much money you need to get your business off the ground, along with any funding you’ll need in the foreseeable future (up to five years). Be clear about why you’re requesting a loan or investment and outline what your needs are based on in your financial forecasts (we’ll get onto those soon).
If you’re offering equity in exchange for investment, provide details on how an investor will be paid, as well as how and when they can cash out. For most small businesses, investors are paid in dividends (a share of company profits).
This part should explain how you plan to use the funds so that investors can determine if your business is a worthwhile investment. If you plan on using capital for several things, list and provide costs for each.
Again, putting these numbers into a visual format will help to more clearly outline your vision.
Finally, if applicable, provide information on any current investments and/or outstanding loan repayment plans.
If you’re seeking investment or a loan for the first time, most lenders will have their own repayment schedules. However, you should detail any factors that may affect lenders, such as any plans to relocate or sell the business.
Unlike other sections, funding information will need to be tailored to each financier. Investors will be interested in return on investment (ROI), whereas lenders will be interested in loan repayments. Create separate reports so that information is relevant to the reader.
Top Tip: Investors and banks will also be interested in your business credit report (if you have one). To learn more about why your business credit score is important and how it’s determined, read our guide to everything you need to know about your business credit score (and how to improve it) 🙌
Financial projections supplement your funding information by showing potential lenders and investors that your business has a positive financial outlook.
This section should include the following key information:
Top Tip: Unless you’re an accountant, this part of the business plan can be overwhelming. To learn more about the fundamentals of accounting and how to create each of the aforementioned statements, read our complete guide to accounting for startups 📣
If your business is already established, you’ll need to include financial figures from the last three years (or however long you’ve been trading if it’s less than three years) for all of the above, other than your sales forecast.
If you’re a new business, your financial figures need to be predicted.
We’ve built several spreadsheet templates to help you generate the below financial reports:
Sales forecast.
Use your market analysis and knowledge of industry trends to estimate your future sales. For the first year, break these figures down into monthly sales, detailing what you’re selling, price points and how much you expect to sell. Moving into the second and third year of business, reduce forecasting to quarterly sales.
As a startup, your cash flow statement becomes a cash flow forecast based on your sales forecast, minus your expenses. Your expenses are the:
Provide monthly cash flow patterns for the first 36 months. Keep in mind that, depending on your business, you may need to account for a lag in revenue. For example, if you provide a service to a client, their payment terms might dictate the invoice is paid 60 days after being sent.
Top Tip: To learn more about the various types of expenses and how to manage them, read our guide to small business expense management 🙌
Create a balance sheet by calculating company assets, minus company liabilities.
Company assets include:
Company liabilities include:
Your balance is the difference between your assets total and your liabilities total.
Use the figures from your sales forecast, expenses and cash flow statement to forecast how much you expect in profit and losses for your first three years in business.
Your statement needs profit and loss projections for each year, as well as a total figure for the three years and should include a breakdown of:
Gross margin (total revenue – COGS / total revenue x 100
For example, £500,000 total revenue, minus £300,000 leaves a gross margin of £200,000.
£200,000 / £500,000 x 100 = 40%
List financial figures using bullet points and include graphs to show how you predict your business will grow over your first three years of trading.
The appendix is the place to include any supporting documents. If a lender or investor hasn’t requested additional documentation, you can choose to leave this section out. But it’s a good place to strengthen your business plan, by including:
Format the appendix with a clear table of contents and sections that correspond to the business plan section.
You now know what goes into a strong business plan, but you might be wondering what tools and frameworks you can use to bring it to life.
In this Tide Masterclass, our Events Manager Cuan Hawker is joined by Tom Horbye , Head of Campaigns Development at Seedrs .
Seedrs connects investors and businesses. They help startups raise capital and grow a supportive community. As they put it, it’s “equity crowdfunding done properly”. It’s unlikely anyone has seen and improved more business plans than Tom!
Tom will explain:
This Masterclass is useful for anyone thinking about starting their own business in the UK.
A business plan is the cornerstone of your company. By clearly detailing your business objectives, strategies, marketing and sales plans, and financial forecasts you’ll be able to set out your business goals and keep track of your progress.
Use this guide to complete the key components and put together a plan that a) brings clarity to your team, and b) provides assurances to lenders and investors that your business is a safe bet.
Photo by William Ivan, published on Unsplash
Head of Community and small business enthusiast
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Officials had braced for more unrest on Wednesday, but the night’s anti-immigration protests were smaller, with counterprotesters dominating the streets instead.
By Lynsey Chutel
After days of violent rioting set off by disinformation around a deadly stabbing rampage, the authorities in Britain had been bracing for more unrest on Wednesday. But by nightfall, large-scale anti-immigration demonstrations had not materialized, and only a few arrests had been made nationwide.
Instead, streets in cities across the country were filled with thousands of antiracism protesters, including in Liverpool, where by late evening, the counterdemonstration had taken on an almost celebratory tone.
Over the weekend, the anti-immigration protests, organized by far-right groups, had devolved into violence in more than a dozen towns and cities. And with messages on social media calling for wider protests and counterprotests on Wednesday, the British authorities were on high alert.
With tensions running high, Prime Minister Keir Starmer’s cabinet held emergency meetings to discuss what has become the first crisis of his recently elected government. Some 6,000 specialist public-order police officers were mobilized nationwide to respond to any disorder, and the authorities in several cities and towns stepped up patrols.
Wednesday was not trouble-free, however.
In Bristol, the police said there was one arrest after a brick was thrown at a police vehicle and a bottle was thrown. In the southern city of Portsmouth, police officers dispersed a small group of anti-immigration protesters who had blocked a roadway. And in Belfast, Northern Ireland, where there have been at least four nights of unrest, disorder continued, and the police service said it would bring in additional officers.
But overall, many expressed relief that the fears of wide-scale violence had not been realized.
Here’s what we know about the turmoil in Britain.
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Written by an experienced academic and consultant, this book provides a concise guide for producing the optimal business plan. Business plans are vital when it comes to making strategic decisions and monitoring progress. Writing a Business Plan is designed to teach you how to write your business plan without relying on someone else or internet ...
Writing a Business Plan. : Ignatius Ekanem. Routledge, Jul 14, 2017 - Business & Economics - 134 pages. Resourcing new ventures is-all important for entrepreneurs, and creating a successful business plan can be make or break when it comes to attracting investment. Written by an experienced academic and consultant, this book provides a concise ...
Resourcing new ventures is-all important for entrepreneurs, and creating a successful business plan can be make or break when it comes to attracting investment. Written by an experienced academic and consultant, this book provides a concise guide for producing the optimal business plan.Business plans are vital when it comes to making strategic decisions and monitoring progress. Writing a ...
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. A good business plan is much more than just a document that you write once and forget about. It's also a guide that helps you outline and achieve your goals. After completing your plan, you can ...
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
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Step 7: Financial Analysis and Projections. It doesn't matter if you include a request for funding in your plan, you will want to include a financial analysis here. You'll want to do two things here: Paint a picture of your business's performance in the past and show it will grow in the future.
Writing a Business Plan: A Practical Guide (Routledge Focus on Business and Management) : Ekanem, Ignatius: Amazon.in: Books
1. Investors Are Short On Time. If your chief goal is using your business plan to secure funding, then it means you intend on getting it in front of an investor. And if there's one thing investors are, it's busy. So keep this in mind throughout writing a business plan.
Step #3: Conduct Your Market Analysis. Step #4: Research Your Competition. Step #5: Outline Your Products or Services. Step #6: Summarize Your Financial Plan. Step #7: Determine Your Marketing Strategy. Step #8: Showcase Your Organizational Chart. 14 Business Plan Templates to Help You Get Started.
Chapter 1 - Developing a Business Plan. Chapter 2 - Essential Initial Research. Chapter 3 - Business Models. Chapter 4 - Initial Business Plan Draft. Chapter 5 - Making the Business Plan Realistic. Chapter 6 - Making the Plan Appeal to Stakeholders and Desirable to the Entrepreneur. Chapter 7 - Finishing the Business Plan.
A structured guide with worksheets to assist you in the development of your business plan, financial projections, and operating budget. Adapted from materials written by Donald J. Reilly. Southeastern MA Regional Small Business Development Center. 200 Pocasset Street. Fall River, Massachusetts 02721.
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A PRACTICAL GUIDE TO WRITING A BUSINESS PLAN Louisiana Small Business Development Center At Southeastern Louisiana University 1514 Martens Drive - Hammond, LA 70401 Phone: (985) 549-3831 Fax: (985) 549-2127 Email: [email protected] Email: [email protected] Website: www.lsbdc.org
Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those ...
In a paragraph or two explain what you want to achieve as a business. This needs to be a realistic aim that investors can get behind and your team members can work towards. The SMART goals method can help you to ensure your goals are practical. SMART stands for: Specific, Measurable, Attainable, Relevant, and Timely.
s of your business plan.Cover PageState the business' name, address, telephone number, fax number, email address, a. d the names of the business owners. Include the date the p. an was finalized (e.g. April 2014). While visuals like pictures and diagrams can be attractive, they can also be distracting an.
Discover how to create a compelling business plan with our step-by-step guide, including the target audience identification, USP, brand building, competition analysis, and a full example.
Not updating your business plan: After you write a business plan, the world will continue to change. Your industry, market and customer base will evolve — and so should your business plan.
below) and the financial the nine plan. areas (described should write. highlight reader to make the key sense ideas sections. It should of in what your be reading. 1. BUSINESS DESCRIPTION. your Business business manner, Description is and what is it does. an overview of what. example, direct In a concise. partnership "New describe Business ...
Guide to Writing a Business Plan • Duquesne University Small Business Development Center • 5 reasons f o r Wr ITI ng Communication The most basic reason for preparing a written business plan is to communicate to others that the operational and financial success of the business is feasible. The plan demonstrates how resources,
short guide on how to write a business plan ## How to Write a Business Plan: A Step-by-Step Guide Creating a business plan is a critical step in starting and managing a successful business. It serves as a roadmap for your business, outlining your goals, strategies, and the steps you need to take to achieve them. Here's a comprehensive guide on how to write an effective business plan.
Step 3: Write a business plan You don't have a business without a business plan . Your business plan is the foundational document that outlines how you will structure, operate, fund, market and ...
2. Write a Business Plan. A business plan is where you plan out your business's future objectives and how you will achieve them. Think of it as your guide for success and any potential roadblocks you may face. Your plan should show you're looking three to five years ahead, and include markers for milestones along the way. You need a ...
Write down the tasks and responsibilities for you to implement the plan. Keep in mind that the business plan you create will continue to evolve as you get started. You want to revisit this and ...
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Officials had braced for more unrest on Wednesday, but the night's anti-immigration protests were smaller, with counterprotesters dominating the streets instead.
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