Writing Your Business Plan
It’s important to brainstorm where you want your business to be a few years down the road, but sitting down and writing out a business plan is essential to actually getting there. An entrepreneur with the most brilliant idea might not necessarily intuit how to construct this plan, though. Here are the general guidelines for putting yours together.
The Purpose of the Plan
A business plan is a written document that helps you explore your business idea, where your strengths and weaknesses lie, and what challenges might arise in the months and years to come. It can be used within the business to guide decisions and to map out the business’s path. Putting the plan together will also give you a firm grasp on the state of the industry you’re entering, and how your product or service will fit into that landscape.
The length of the business plan will vary between venture; it can be a basic outline or a detailed overview. Functionally, however, all business plans need to comprise at least these seven parts:
- Cover Page and Summary
- Industry Overview, Your Company, and What It Offers
- Market Research
- Marketing Plan
- Operating Plan
- Management
- Financial Plan
Cover Page and Summary: Your business plan should start with basic contact information (address, email, phone numbers) and the date that the plan was created, to keep track of the various revisions that will come. The summary should be a short abstract of the main findings of the plan, no longer than one page in length.
Industry Overview, Your Company, and What It Offers: This is where you discuss exactly what your business will be, and what it will offer. This should include the reason behind the development of your product, customer benefits, its use, and its quality. You will also need to cover legal aspects, like regulatory status of the product and the legal structure of your company.
Market Research: In order to convince people to buy your product, you need to know who is using products like yours, why they buy them, and how much they buy. Market research is also important for understanding what other businesses you’re competing against, and how your product will surpass theirs.
Marketing Plan: Your marketing plan will propose how you intend to sell your product to people, and who you’ll be selling it to. You’ll need to cover your marketing strategy, consumer base, pricing, advertising, and market share. The marketing plan will need to be updated often, as the industry, your product, and your goals change.
Operating Plan: This is where you’ll discuss the long-term logistical details of operating your business, including where your office will be, how many employees you’ll have, and the facilities and equipment you’ll need.
Management: This will detail the structure of your company’s management, their duties, and compensation. Even if you’re the only manager, it’s important to delineate your standing in the company.
Financial Plan: A financial plan is a five-year description of the funding you’ll need and where the money will come from. You may need to enlist a successful businessperson or accountant to help you outline your capital needs, financing plan, balance sheet, cash flows, and investment plans, if you don’t have much financial planning experience.
More Resources:
Sources:
Starting and Growing Your Small Business. (2010) Virginia Tech Cooperative Extension.