Writing a business plan is much more complicated than following a template or copying someone else’s example. Attached below is our proprietary business plan outline that GoBusinessPlans uses when we create business plans for our clients.
CHAPTER 1: PREPARATION
Several hours of planning and preparation are required, and it helps to take time doing research before sitting down to write a business plan. Specifically, new business owners or established entrepreneurs should focus on the following areas to research before writing their business plan:
A business plan is a guide for your business to be successful, as well as a very detailed and thorough document that helps you to raise money. The above categories give you a break down of the information needed to for both of those things to happen. Below is more information on the sections that you must do extensive research on before you even start writing your business plan.
First you must figure out what industry your business is operating under. This will help you to better understand a majority of the rest of the components for your business plan, and it is often the most important first step. An industry analysis will include: ways of reducing business risks, industry trends, estimated capitalization requirements for your business, and product & service trends and opportunities. Startups will benefit from the research for the industry analysis portion of the business plan because it will help owners decide what direction to take marketing, financing, hiring, and more. Components of the industry analysis include:
1. Economic characteristics of the industry
2. Overview of competition in the industry
3. Trends of the industry
4. Key success factors
5. Potential for growth within the industry
There are several websites and tools to find the above information for the Industry Analysis. Some of these resources include: BizStats, FreeLunch, IBISWorld, U.S. Census Bureau, and Hoover’s Online. An industry analysis is different from the market analysis as well as the competitive analysis portions of the business plan. The industry analysis will describe the products offered within a specific industry and will determine the bandwidth of the market. Clients hiring our business plan writers to complete their business plan get complimentary access to these reports and tools.
Market research gives business owners information about their customers and the markets that their business will reach. By analyzing this information, business owners will be able to provide products and/or services that are desired and competitive. For entrepreneurs of new businesses, market research can help create strategies for the rest of the business plan and lifespan of the business.
The information collected for the market research portion of your business plan should include:
1. Who the customers are (age, education, career, where they live, beliefs, income, etc.)
2. Price range
3. What consumers like/dislike in competitors
4. Potential for breakthrough into other markets
No matter what tools you use to find the data for your business plan (online sources, interviews, books, etc.), you will want to make sure to follow the below steps to maximize your market research:
1. Identify what you want to learn or find out. Be specific.
2. Have follow up questions.
3. Identify the target group for your research.
4. Select the most effective tool for obtaining the information you need. 5. Analyze the results of your research.
A competitive analysis identifies and details key competitors to the business. This will allow business owners to determine how competition will react to the new business entering the industry, as well as help the business owners to set their business off from the crowd. A competitive analysis offers a detailed profile of each competitor including the competitor’s strengths and weaknesses instead of the general competition in the industry.
The competitive analysis for each primary competitor should include:
- Company Profile
- Geographic location
- Market share and profitability
- Strategies and objectives
- Benefits and downfalls for consumers
Information on competitors is mostly accessible via the internet; however, additional information can be found in news stories and press releases, advertising, patent and copyright applications, annual reports, and SEC filings.
Getting information about a competitor can sometimes be difficult and a lot of time in depth strategic searching may be required. On the other hand, the information gathered about competitors may not seem extensive, but even the smallest bit of information can help you to determine how to compete against a competitor.
CHAPTER 2: ESSENTIAL ELEMENTS OF A BUSINESS PLAN
Each business plan is unique to the venture surrounding it. Most business owners think a business plan should be written solely to raise money; however, business plans can serve multiple purposes depending on the audience intended.
Business plans can be lengthy or brief, detailed or concise. For example, a start up may want to include more details to show their projections year by year, while a more established business may just want a business plan to include how they are looking to expand.
There are also oftentimes external facing business plans for potential investors and internal facing business plans for business owners only. Whether your plan is short, long, internal or external, most plans have very specific pieces. The most frequently included portions of a business plan are:
1. Executive Summary
2. Company Analysis
3. Industry Analysis
4. Market Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
No matter what type of business plan you are writing, adequate planning and essential elements will be sure to help you succeed.
CHAPTER 3: EXECUTIVE SUMMARY
The executive summary is meant to inform the reader about the company. Specifically, it should explain what the company’s current status is, future goals and projections for the company, and how the company plans to be successful. In a business plan, which is usually created for investors, the executive summary is the first opportunity to make their business of interest.
Oftentimes, it is easier to write your executive summary after you have already completed the rest of your business plan. The reason for this is because you will already have become familiar with the strong points of your business, as well as the most important points that should be highlighted in the executive summary.
Below are some suggested portions to include in your executive summary, though these may change depending on what is included in your business plan.
Mission Statement – Why your company exists.
Company Information – Name of company founders, date the company was founded, location(s), number of employees.
Highlights – Any notable achievements so far for your company.
Products and Services – What your company is offering to clients.
Financial Information – How much your company requires and what it will be spent on.
Future Projections – The goals your company has and direction the company will go in the future.
While concise, the executive summary can sometimes be the most important part of the business plan because of its need to capture its reader’s attention. Make sure to highlight all of the most important parts of your business plan and set the stage for what comes next.
Lastly, make sure to write the executive summary with a particular audience in mind. Depending on who you are trying to attract with this version of your business plan, from investors to employees, make sure the executive summary will speak to who you are expecting to read it.
CHAPTER 4: COMPANY ANALYSIS
A company analysis is an overview of the company, including its founder(s), owner(s) and management, company history, products and/or services, target markets, and how the company plans to introduce its product into the marketplace. The company analysis can usually be anywhere from one to five pages depending on how many facets of your business are necessary to detail, though one to two pages is usually sufficient.
You can begin this portion of your business plan with just a few sentences – similar to an elevator pitch – to get the reader interested in learning more about your business. Be sure to mention whether your business is a startup or is expanding. The company analysis should then include the business structure, such as whether it is a corporation, partnership, sole proprietorship, or limited liability company, and who is directly involved in the company and how the company benefits from them being involved. The company analysis should then end with specifics of how the company plans to be profitable.
CHAPTER 5: INDUSTRY ANALYSIS
After looking up data on the industry you believe your company operates within, you can incorporate that information into your business plan. Doing the research on the industry first allows you to figure out what the risks and opportunities are for your new or continuous company. The information you will include in your business plan allows you to develop strategies while making sure to do your best in avoiding any potential risks.
The industry analysis of your business plan should include the below:
- A brief overview of the industry. Explain the industry’s historical background and locations of operation.
- Common trends and growth patterns that have existed over an extended amount of time.
- Industry influences including but not limited to government and competition
- Both short term and long term prediction for growth in the industry.
- How your company will position itself within the industry.
CHAPTER 6: MARKET ANALYSIS
This section of your business plan should describe the market that your company will operate within. Again, you will include research you conducted and data you collected before you began writing your business plan. A market analysis should give an overview of the marketplace, where your competitors are positioned within that marketplace, and facts that support your company being introduced into or continuing to operate within that marketplace.
Below are some must-list topics for your market analysis:
- A recap of the industry and a description of the market. This can include projected growth and potential changes in consumer demand.
- Description of who your customers are including detailed demographics.
- How big the market is that your company will operate within.
- Pricing of both your company’s products and/or services as compared to its competitors.
- Any relevant and topline data that you collected in the competitive analysis.
CHAPTER 7: COMPETITIVE ANALYSIS
Though your business plan is all about your company, you show how your company compares to others in the industry in the competitive analysis. While it is sometimes hard to determine how your company will compare to others, this is an important part of the business plan because it will support your company’s mission, products, services, and goals against the other companies that may be similar. This may also be the section that requires the most sleuthing in order to find how how your company compares to others.
Below are four things that every competitive analysis should include:
- A list of competitors, which can be arranged in several forms from paragraphs to charts. The list should include the name, location, products/services, sales volume, market share, pricing information, and marketing strategy.
- Competitors’ strengths and weaknesses with analysis of how they compare to your company’s strengths and weaknesses.
- A detailed description of your company, your company’s role in the marketplace, and how your company can compete.
- Your company’s competitive advantage.
CHAPTER 8: MARKETING PLAN
The marketing plan section of your business plan is to attract customers who may be willing to purchase a product or service from you and your company. After you have figured out who your target market is, then you can be able to strategize how you will reach that market.
Marketing plans usually include the below strategies:
- Penetration strategies – how your company will initially kick off.
- Growth strategies – how your company will build upon the success of a product or service by introducing it to different users or into new markets.
- Alternative sales strategies – how your company may distribute its products or services in different ways than its sole distribution process in order to boost sales.
- Communication strategies – how your company will communicate, whether digitally, face-to-face, or other in order to maintain a customer base.
Keep in mind that the marketing strategy oftentimes also has an effect on other aspects of the business plan. For example, a target market may change a bit when looking at alternative sales strategies.
CHAPTER 9: OPERATIONS PLAN
The operations plan of your business plan is one of the most vital sections. Without the operations plan, your business would not run, because you need to know exactly who is doing what, and when, and where.
This section is also an important section not only to show investors that you know how to run a business, but it will also help you throughout the span of your business’ life as well as your future managers and employees to reference for any operations related questions or concerns. In other words, the employees covered in the team and management plan section of a business plan should be able to reference the operations plan for anything related to the inner working of the business. Therefore, this section should be filled with details and instructions that will direct employees within the organization in the day-to-day of the business. Additionally, the operation plan section should begin with an organization chart showing the title, duties, responsibilities, and supervisory role of each member of the business.
Depending on the purpose of your over all business plan, the operations plan may be able to be cut or expanded.
CHAPTER 10: FINANCIALS
The financials section of the business plan gives readers an idea of both the past and potential future for your company as far as money goes. Already established companies should include financial data of past performance, and most banks, venture capitalists, or other lenders will want anywhere from three to five years of historical financial data.
However, whether you are an already established business or a brand new startup, the financials section of your business plan must include projections of future financials for your company. These projections must include data that has been collected in order to support the projections, and is often the most critically looked at by investors and banks. Therefore, make sure to do your calculations more than once or twice to ensure the best educated financial forecasting. Financial forecasts should include statements of projected income, balance sheets, cash flow statements, and capital expenditure budgets.
In addition to the data that you will use to support your financial projections, all information in the financial portion of the business plan must be able to be verbally explained. People outside of a company want to see that you can both wisely and accurate write about and speak about the money that will be attached to your company. Finally, because there will be a good amount of data, sometimes it is helpful to include an appendix specifically for finances.