Essential Sections of a Business Plan Explained

Writing a Business Plan can feel like a time consuming task, but what comes out the end of the process is a document that defines your visions and sets out a clear strategy to reach your goals.

Here is a summary of the main sections you should include in your Business Plan and an idea of what you should be including in each:

Executive Summary

Give the reader an overview of your business, where you want to take it and how you are going to get there.

This is a concise overview of your business plan and probably needs to be written last, although it is the first part of your document.  Look to include:

  • Your Company Name, Location and a Summary of the Team;
  • A description of the services/products your business offers;
  • A brief description of the market your business operates in, where you fit and what makes you unique to your competition;
  • Brief financial details, in particular if you are securing financing or investment;
  • A mission statement.

Business Objectives

The ultimate outcome for the Business.

Detailing business goals and objectives will give the reader an idea of where you want to take your business as well as make them want to read more about you and understand why you are doing what you propose. This section may be short and sweet, or be replaced with the heading ‘Mission Statement’.

Read some Examples of Business Objectives here.

Company Summary

Give Your Reader an Understanding of Where You Are, Where You Have Been and Where You are Going.

Your Company Summary starts to offer the reader some more information about your business, although it should be a high level view.  This sections should include information about:

  • Company Ownership and its Legal Status;
  • A brief description of your product/service offering and who you plan to supply;
  • If you have been in business already, a brief overview of what you have acheived;
  • A summary of financial goals and future profit estimates;

Products or Service Description

A description of What You Are Selling.

Explain to your reader what you sell and how this benefits the customer or differs from existing products.  Look to describe:

  • Details of your services or products, as well as any ongoing services you plan to offer;
  • Any patents you hold;
  • How your product is superior to your competitors;
  • Why your product appeals to the customer;
  • Who you plan to sell to.

Market Analysis

Demonstrate Your Knowledge of the Market and How Your Business Fits into It.

Analyse the market in which you operate and offer the reader a description of how it works, it’s size and outlook.  You may have experience in the market already, which you must demonstrate but you might also want to consider conducting your own market research so you have the facts and figures you need to backup your Business. Look to include:

  • The results of any market research you have conducted (summarise them in the main body of the plan, but include the details in the appendix);
  • Details of the target markets you plan to sell to;
  • Market Segmentation and Your Strategy to Target each;
  • Market Analysis which covers the current and future target market;
  • Competition analysis and evaluation (try SWOT analysis).

Strategy & Implementation Plan

An Overview of Your Sales Plan, Marketing Plan and Operational Plan 

You now start to become more specific and detailed about your business. You need to give the reader an understanding of how you plan to promote and sell your service/product and deliver it.  So for example, if you are selling bookkeeping services to small businesses, you would want to show how you plan to find you clients (marketing, advertising or referrals) and how you would take on staff to deliver the bookkeeping work. In summary therefore try to include:

  • Details of your Sales Strategy, your services or products offerings and how they make up your total sales (graphs and images can help here);
  • Geographical areas you plan to cover;
  • An overview of your marketing strategy and how this will support your sales strategy;
  • Your sales forecast, broken down by revenue streams;
  • A forecast of your costs, along with explanations of how you will deliver your product or service (employee numbers, delivery costs or logistics).

Management Team

Your Businesses Organisational Structure

Here you need to help the reader understand who the management team in charge of the business are as well as including a bio on each of them.  If you are looking for an investor demonstrating that you have a strong management team to lead the business will strengthen your investment potential. Typical things to include are:

  • An organisational chart;
  • Information about owners and management teams (including a bio which details any relevant experience);
  • Key Personnel in the business such as experienced managers.

Financial Plan & Forecasts

Financial Data and Projections for the Business

The final section of your Business Plan should detail the financials for the business probably best shown as graphs, bar charts and tables, along with some explanations. Summarise year on year data and look to include:

  • A breakeven analysis;
  • Projected Profit & Loss;
  • Detail out Gross Margins, if you feel it is relevant;
  • Projected Cash Flow;
  • Projected Balance Sheet;
  • Business Ratios and how these compare to industry averages.

Final Advice

Many times people need to present a Business Plan for funding or investment purposes and there can be a tendency to present the figures the investor WANTS to see, demonstrating huge sales being made in a unrealistic time frame or underestimating costs. The result is cash flow runs out, or it turns out that the business was not able to make enough margins to survive due to poor market research.

Always take the time to create a realistic business plan which you can use as your strategy for growth. Critique your idea. Speak to as many people as you can about it. Test it on a small scale before accepting funding or loans. That way you will give your business idea the best chance of success.

Business Planning: How to Get Started

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant turned entrepreneur who helps the self-employed gain financial confidence when it comes to running the numbers side of their business and filing tax returns with guides, templates and resources on the Go Self-Employed website.