If you’re thinking about starting a small business you may be wondering if a business plan is necessary. While a business plan is not a must, many business owners agree that their business plan was the guide that led their small business to success. Read 5 Reasons a Small Business Plan Is Important
A business plan is a dynamic document that outlines your business’ performance for the following 3-5 years and explains how your company will grow and increase revenue with time. It will help you determine the viability of your business idea and create expectations of what needs to be done. Planning ahead of time can help you prevent failure, by determining how your business will make money, spend it and grow.
Creating a business plan can be a time-consuming task, as each business has specific needs that must be taken into consideration, however, while each business needs a unique plan, the business plan outline is the same. (Read more on writing business plans) All business plans have the same basic layout.
A Basic Business Plan Outline Includes the Following:
If you are wondering how to start a business plan outline, keep in mind you must include all the elements mentioned below.
The executive summary is the introduction to your small business plan; it is your “pitch”. The purpose is to tell your reader who you are, what you do and why your business is a good idea. If you are looking for potential partners or seeking investors your executive summary is the first opportunity you have to grab their attention.
In this section, you must demonstrate that you have done thorough research, include the existing need for your product or service and how you will fulfill it, explain how you can succeed and describe your future plans.
When creating a business plan, your company summary or company description is the section where you will explain your business’ goals. You will describe the industry as well as the existing needs and opportunities and how your business will meet them. You will also take this opportunity to mention the competitive advantage you have and how it will make your business a success.
Strategy and Implementation Summary
The strategy and implementation summary will describe how you will develop your product, market, and organization. You should include procedures, scheduling, costs, and risks. It should include information such as market segmentation, business analysis, demographics, competitive edge, marketing strategy, sales strategy, and sales forecast.
The next chapter when you write a business plan will be the market analysis. It will demonstrate your market and industry knowledge; here you will describe the results of your research. Your market analysis should include information about your target market, potential customers, pricing structure and competitive analysis.
Sales and Marketing Strategy
When creating a business plan, the sales and marketing strategy section will focus on how you will reach potential clients, increase brand awareness and promote your product or service. Additionally, it will describe your sales strategy and sales activities.
This section will include information about your company’s structure, ownership, and management team. It will describe the structure of your business and the qualifications and expertise of the team behind your company.
The financial plan is a key element of any small business plan, once clear objectives have been set, it is time to create a financial plan to project how your business will perform. This section will include elements such as startup funding, break-even analysis, projected profit and loss, projected cash flow and balance sheet. In this section, you will explain in detail why your business makes good financial sense.
When creating a business plan you must keep in mind that it will not only will it assist you when seeking investors, bank loans or partners, it will also be a critical management tool that will guide your business to success.
Whether you’re seeking to attract investors, get a loan, or simply determine whether your idea is viable, writing a business plan is critical in the planning process, it will focus your thinking and provide an objective and critical view of your business.