How To Write A Business Plan

A business plan is an important step for starting a business and is step 3 of 6 Steps to Starting a Business. Your business plan should outline step by step how to set up your business, how to operate it, and how to grow it. The Small Business Association provides templates and examples for writing a business plan on its website.

The components of a business plan can include: 

• Executive Summary: What’s your company? Why will it succeed? Include your mission statement, your product or service, and basic information about your company’s leaders, employees, and location. Also include financial information and your plan to grow your business once you get it off the ground.
  
  
• A description of your company. This should be more detailed than your executive summary and give specific information about the problems your business solves. It should list the consumers, organizations and businesses your company will serve. You should explain what advantages your company will have over any competition, and other things that will help your business succeed. This can include experts on your team, a great location, a terrific website, etc. This is your chance to brag about your strengths.
  
  
• Market analysis. This can stem from your market research, and should demonstrate an understanding of both your industry and of your target market. Be sure to speak to what your competition is doing and what helps them succeed, why it helps them succeed, and whether you can do it better. Be sure to identify any trends you notice in the industry or your target market.
  
  
• Organization and structure. This describes the type of business organization you expect, what strategies you have in place to manage risk, and who will be on your management team. Include an organizational chart that notes who will do what in your company. Try to show how each person’s talents will be used to the company’s advantage. You may also want to include their resumes. Also, describe what legal structure your business will have: C corporation, S corporation, general partnership, limited partnership, sole proprietorship, or limited liability company. You will need to choose this before you register your business with the state. The Small Business Association outlines the different types of common business structures and the advantages of each. It’s a good idea to consult an attorney and/or an accountant when making this decision.
  
  
• Service or product. What service or product are you going to sell? What are the benefits and how does it fill a need for your target market? Do you plan to file a copyright or patent on your product? Who will create your product or deliver your service? How will you find and buy any materials needed? How much will it cost to make your product or deliver your service? How much will you charge for it?
  
  
• Marketing and sales. This establishes how your business will achieve the projections you have laid out. How are you going to get the word out about your product or service? Your business plan should explain how you will attract customers and how you will keep them. You will also need to describe how a sale actually happens – is it online or in person? Be sure to describe how you will reach enough people to sell enough products or services to keep your company thriving.

Some common marketing tools used to market businesses include:

• A website. You can create a standard informational website or a website that allows you to sell your goods and services online. Be sure to use keywords that your customers may search online when looking for products and services you offer. There are companies that will build and maintain your website for you if you don’t feel up to doing it yourself. Some basic components of a website may include:
  • About your company
  • How to get your product and/or service. This could be a listing of locations and hours or a listing of your products and services for purchase online.
  • Relevant content. This can be a blog that provides solutions to your customers’ problems, customer testimonials, product demos, employee videos, and more.
    
    
• Online directories. Many people use online directories like Google, Apple Maps, Facebook, and Yelp. They may also consult their local city hall or chamber of commerce.
  
  
• Social media. It’s okay to start small – many businesses are only on Facebook! Post content there that’s relevant to your business and brings your followers back to your site or to your store. It’s important to post regularly at a frequency you can sustain. An easy way to find content is to share your own blogs on your social media pages, share your testimonials or share your videos. Some platforms offer e-commerce solutions so that you can sell your product or service directly over social media. They also typically have free advertising training that will teach you how to market on their platform. There are companies that will manage your social media for you if you don’t feel up to doing it yourself.
  
  

  FREE DOWNLOAD: Basic social media tips
  
  

• Funding requirements. If you are asking for funding, you will need to outline how much funding you will need over the next five years and how you will use it – in detail. For example, if you need to buy equipment or materials, state it here and state how much they will cost. Be sure to identify whether you want debt or equity, the terms you would like to have applied, and the length of time your request will cover. Be sure to include how long it will take you to pay off your debt. Levo’s Business Services team can work with you on this section to help you think through all the details.
  
  
• Financial projections. “This is where you outline how many products or services you will sell and how these sales will keep your business thriving,” says Pekoske. “If your business is already established, include financial statements from the last three years, including income statements, balance sheets, and cash flow statements. Your financial outlook should span the next five years, and include an overall budget, projected income statements, cash flow statements, balance sheets, capital expense budgets. Be very specific in the first year especially, using quarterly or monthly projections.”

For more information about starting a business, see our blog: How to Start a Business in 6 Steps.