So, you’ve developed the idea of your new venture; you know there’s a market out there for it, and now’s the time to start writing your business plan. The problem is, you don’t know where to begin! Before you start worrying about staring into a blank page, I’ve written this guide which covers everything you need to include in a business plan, and help take away the stress of knowing where to go next!
Although there is no right or wrong way of writing a business plan, there are some vital aspects every plan should include. Bear in mind, that the entire process is also there to help you formulate and develop your business idea further so that it’s taken seriously by financiers or people in the industry.
If you’re ready to transform your idea into a reality and make your business legal, then let me guide you through it.
Before you start writing your business plan
- Be concise: no one wants to read a long list of waffle! It should reflect a detailed portrayal of your business why so that the reader(s), even outside the industry, understands exactly what your business is about and what you are aiming to achieve.
- Be relevant: it’s important you make sure that your plan is professional and informative. It should include accurate data, projections, accounting documents and content which is exclusive to your business. Remember, it’s primarily a reference for your new company’s growth.
- Be clear: any business plan should be clearly presented, and easy to read and navigate. Ensure you have all the appropriate pages ordered correctly. It’s also a good idea to have someone check it in case you have overlooked spelling, grammar and that it flows well.
Writing your business plan
A business plan serves as a roadmap to successfully launch a business. And, while there are different business plan structures, depending on the goals and needs of your venture, the following uses the typical order of content elements of what to include in your business plan.
- Executive summary
- Company description
- Market analysis
- Description of product/service
- Marketing and sales strategy
- Financial planning
- Appendix
1. Executive Summary
It may sound strange, but a good bit of advice is to write your Executive Summary after you’ve written out your plan. This is because it will probably be easier to summarise the information from the other sections.
In a nutshell, an Executive Summary is a persuasive overview of setting up your business, aimed at grabbing the reader’s attention and continue reading the rest of the plan. It should be easy, yet concise to read, enticing people to learn more about your company. Typically, it should only be one page or less.
Key elements should include:
- A brief introduction of you and what your business is about
- What your products/service are and their USP
- A description of your customer base
- A clear picture of your existing and/or financial requirements
- Why your business is different to your competitors
2. Company Description
Next up is to provide more detailed information about your business so here, try and imagine what other people might want to know more of. It needs to include what exactly your business is about and what you can bring to the table to ensure its success.
You will need to outline your business structure and whether it you’re operating as a sole trader, limited company or partnership. In addition, give a brief description of the specific industry, it’s insights, sales and trends, and how your business fits into this niche.
Key elements should include:
- The mission and vision of your company and it’s future development
- Details of the company background, such as, when it was founded, where it is based
- The company’s goals and objectives
- The target audience you have identified for your business
- Any key employees of your team
3. Market analysis
This is where you give a more in depth analysis of your business model and how it fits into the industry’s market. Whatever the size of your new venture, showing knowledge of your competitors and target market will inform decisions for marketing, pricing and specific products/services.
You should already have your market research prepared before writing your business plan so now is the time to showcase your specific understanding of who your ideal customer is. Don’t make the information here too broad! It will only highlight your lack of knowledge. Furthermore, you need to show how the market needs your product or service, and why it is different to your competitors.
Key elements should include:
- Identifying demographic data of your target market. For example, their income, age, gender, profession, etc.
- Outlining your market research and testing which should include an estimate of projected sales against those of your competitors
- Identifying the core strengths, weaknesses, opportunities and barriers of your business and how they reflect against your competitors
- Inclusion of graphs and charts to illustrate where your business lies in comparison to other companies.
4. Description of Products/Services
This is the section dedicated to the specifics of your product/service. You should include an overview of how they will define the success of your business, ie your USP. Extra information should focus on the production, distribution, benefits and pricing. Essentially, you need to be clear about the entire life cycle of your product or service, incorporating the development of any future additions.
Key elements should include:
- Define your pricing structure and how much you will charge for each service
- What resources you will use for manufacturing and developing each product/service
- How you will maintain quality control and assurance
- Detail your daily operations
- How your products intend to meet your customers’ needs
5. Marketing & Sales Strategy
While it isn’t necessary to write an in depth marketing plan, this section should address the strategies you will implement to generate both leads and sales. After all, what’s the use of a business without selling to customers? So, how do you plan to sell to them?
While there’s no sure way of selling a product/service as you will need to continually evaluate what works and what doesn’t when it comes to marketing. Therefore, ensuring you include how you will grow your market and customer base.
Key elements should include:
- Describe who your target market is
- Identify the channels where you will advertise and promote to reach your target market
- Include a budget and future predictions for your marketing plan
- Outline how you will make people loyal customers who will use your brand
- Describe how you will use marketing tools to uncover insights which will drive marketing strategies
6. Organization & Management
Here is the part of writing the business plan where you outline the structure of your business in relation to who exactly your team players are. It’s a good idea to list a description of all roles, responsibilities and the team’s hierarchy, so you’re outlining what each individual can bring to the table.
Therefore, this section will highlight their qualifications and expertise to each given role. You could even include their CVs to the Appendix for further reference. It should also include those roles which may need filling over the growth of your company and how payroll works within the company.
Key elements should include:
- Explain who is best suited in the different positions and why
- Refer to the structure of your business. For example, LLC or Patnership.
- Include any awards, skills or recognition of each person
- Insert a diagram which can demonstrate the business ‘hierarchy
- Include any freelancers or independent contractors you may add
NB: if you are running the business on your own, then this section will be considerably shorter and you won’t need to include some of the details.
7. Financial Planning
This is the section where you need to pay the most attention, especially if you intend to provide it to prospective investors or apply for funding. Every business plan should explain the details of financial planning.
You should be as specific as you can in terms of what you will use the money for, for at least the next 5 years. You should include all the relevant finance documents that relate to your business and its future projections in terms of revenue and income. If possible, it should also have an emergency plan included for when business is slow.
Key elements should include:
- Identify your company’s profit and loss over a period of time by producing an income statement
- Provide cashflow statements to show how the money needed to scale the business
- Additionally, you need to produce a balance sheet to summarise your liabilities and assets
- If you already have debts or loans, outline how you intend to pay them back
- You need to be realistic in this section and make sure that your profits and losses are not over-optimistic
7. Appendix
Finally, the appendix should contain all your supporting documents for your business plan. This has to be well organised and ordered according to the other contents of the plan.
Key elements should include:
- Certificates and references that enhance your that credibility
- A portfolio of your product/service
- Any legal documents and patents
- Your official financial documents
- CVs and certificates of key employees
And, that’s it, know you know what to include in a business plan, you’re ready to go!
