Contents
What Is a Business Plan?
What to Do Before You Write
How to Get Started
How to Write the Executive Summary
How to Write the Company Overview
How to Write the Market Analysis
How to Write the Competitive Analysis
How to Write the Sales and Marketing Plan
How to Write the Operations Plan
How to Write the Management Overview
How to Write the Financial Overview
What to Include in the Appendix
How to Use and Present Your Business Plan
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- What a business plan does, and what a typical business plan contains
- How to gather information, organize your research, and get started
- How to write each section, from the executive summary to the appendix
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What Is a Business Plan?
A business plan explains what your business sells (or intends to sell), how your business sells it, and why. At the same time, it describes future goals and anticipates opportunities and challenges that may arise along the way. Business plans vary widely in length, from 15 pages to 50 pages or more.
The purpose of a business plan can vary so greatly that you may need different versions of the plan to present to different audiences, such as potential investors, lenders, partners, and employees. In essence, though, every business plan addresses three questions:
- Where is the business now?
- Where do you want it to be?
- How will you get it there?
In most cases, the answers are far from easy and become apparent only after a lot of diligent research. But the rewards of the process are great.
Reasons to Write a Business Plan
A solid business plan could be your ticket to higher sales, more engaged employees, better bank loans, more venture capital, and less stress. In particular, a business plan can help you do the following:
- Chart a course of action: At its most basic, a business plan helps you plan what to do next. It takes stock of the past and present, imagines a future, and connects the dots between the two.
- Clarify your thinking: Business plan writing allows you to get all of your thoughts down on paper and challenge yourself to validate assumptions, identify weaknesses, and consider new approaches.
- Explore a new idea’s feasibility: Business plans can provide a framework for thinking through issues such as hiring new employees, taking on new clients, or leasing additional space.
- Win loans and investment capital: Business plans are a major consideration when companies seek bank financing or venture capital, a source of business financing that investors provide to privately held companies. Lenders and investors want to know what they’re getting into before they write a check.
- Guide day-to-day decision-making: When you’ve assessed your priorities and know what is most important to your business, you’re in a better position to decide how to spend your time. This can help keep you from being distracted by the competing demands of colleagues and clients.
- Give employees a context for their jobs: The lower an employee is in the ranks, the farther he or she typically is from the overall company’s vision. Employees labor unenthusiastically when they don’t know how their work contributes to the larger goals of the enterprise. Sharing parts of your business plan can reduce worker apathy.
- Earn support or approval for a concept: Sometimes, sharing your business plan— a formal document with facts and figures to support your vision—is more informative for colleagues, potential partners, professional service providers and other key constituents than oratory alone.
Typical Components of a Business Plan
The fact that no two businesses have the same aspirations, challenges, or audiences means that the content of their plans will be distinct as well. But there are several generally accepted business plan components that are useful for organizing and articulating the visions of a wide range of companies across industries and development stages. These also are the headings that loan officers and venture capitalists expect to see within business plans.
Component |
Description |
Objective |
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Executive summary |
A compelling overview of your business concept and a preview of the rest of your plan’s content (typically no more than 1–2 pages long) |
To sell your business concept by capturing the reader’s attention, highlighting key plan components, and compelling the reader to keep reading |
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Company overview |
A basic description of your company’s background,
including what it does, how
it’s structured, and what its place is within its industry |
To define the boundaries of your business and establish which
directions are appropriate for
future development |
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Market analysis |
A detailed and thoroughly researched profile of the customers you intend to serve and your ability to meet their needs |
To substantiate the existence of your customer base and their readiness for your product or service |
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Competitive analysis |
A description of the context surrounding your business: the competitors operating within your industry, the factors that set you apart from them, and the reasons that customers will choose your product or service |
To clarify your unique strengths and also alert you to potential threats and opportunities through careful assessment of what others in the industry are or are not doing |
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Sales and marketing plan |
A summary of your key product message, outlining your marketing tactics and describing your sales process |
To guide company efforts to identify, attract and retain customers, and the sales they generate |
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Operations plan |
A description of the labor,
material, facilities, and equipment issues that are critical
to the success of your
business (but not a full-blown operations manual) |
To inform decisions related to
the way you create products
and services, manage inventory, control costs, and deliver products and services |
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Management overview |
A rundown of the company’s leadership team, potential hiring needs, and relationships between management roles |
To boost readers’ confidence in your ability to execute the business plan |
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Financial overview |
Financial statements that provide a numerical representation of business decisions |
To check the company’s vital
signs and illustrate its value and
profitability potential |
| Acknowledgments & Disclaimer |
