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A Closer Look at What’s in Business Plans

We always wonder what a business plan is and what to write in there. A business plan is simply a plan that shows what you want to do with your business. If you want an informal business plan, then it can be written in any format and order you like, but when you need to write a formal business plan for your investors, bank or financial institutions or others, you need to follow a format that financial institutions, government agencies and private investors are familiar with.

Here we provide an overview of the business plan sections included in a formal business plan so as to explain how to write a business plan. Each section will be discussed in details in separate posts. The detailed information will help you to write your own business plan.

You can as well hire someone to write your business plan. But if you know what to expect from a Business Plan, you will save time and money.

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How to Write a Business Plan - Outline

  • Executive Summary - It’s a high-level overview of the business plan. These are the first few pages in the plan, which are actually written at the last.
  • Company Description - A few pages that describe what the company does, how it is doing financially, its business operations, financial etc.
  • Products or Services - Here you describe about the products or services you want to offer. You also compare them with your competitors’ products or services.
  • Market Analysis - This section includes detail description about the market you want to enter. Market demand, niche, market characteristics, expected demand for your product or services (with documents to support it) are some of the elements of market analysis. Marketing research and data collection and creating a marketing plan is necessary in this part.
  • Marketing and Sales Strategies - This section details about the marketing and sales strategies you would employ to sale your product or service. Ways of promotion, ways to get the product or service to the customers, cost of distribution, costs of promotion, analyzing and measuring the effectiveness of the methods you would take are some of the points you would include here.
  • Organization and Management - It will describe the proposed legal business organization structure of your business. Along with the type of business organization (sole proprietorship, LLC, C corporation, S corporation, etc.), you will also describe the key players in the business, business responsibilities of the people involved and their cost to the business.
  • Financial Data - This section will contain all the financial elements of a business such as balance sheet, a breakeven analysis, an income statement and a statement of cash flows. The financial data will include both historical financial statements and forward-looking financial statements of your business.
  • Funding Request - If you need fundf, then you need to complete this section. You will request for fund in this section. If you do not need fund now, then you can leave this section out.
  • Appendix - This section contains additional supporting information. It may include resumes, details of market research, estimates, and documentation required to support the business plan.

If you have read our 10 Steps Before You Start a Home Business and followed it, then you would have most of the information needed to complete the business plan. Use the information and data collected by you in the 10 steps to write your business plan.

What Happens Once I Write the Business Plan?

Use the business plan to get the necessary funding. Approach various financial institutions, banks, investors and present your business plan.

Your business plan is a valuable reference and therefore it should be a living document. Keep your business plan updated because you will need to refer to it often and you will need it to find funding for yourself.

As time changes, as you grow and expand, as your business operation changes, you will need to change the business plan accordingly.

There are certain benefits of keeping your business plan current:

  • Whenever you need to apply for funding, it will help you to do so faster. Updated business plan will save you time and money.
  • For updating the business plan, you need to revisit it often. IF you revisit the document often, then it helps you to remain focused on the success of your business.

How Often Should I Update My Business Plan?

It’s up to you. You can update the business plan quarterly, half yearly or annually or even you can update it on a real-time basis.

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