How to Write a Business Plan

Guide Note Writing a business plan is a great way to help create a focus for your business and educate others about it. It can be used to procure a loan and get investors. If you don't know how to write a business plan, then this page will help guide you through the major parts of one.

Table of Contents

Business Plan Tips

  1. Your business plan is like a resume for your business.
  2. Business plans can be written for new or existing businesses.
  3. Tailor the plan to meet the needs of your business.
  4. Your business plan should be dynamic and change as your needs change.
  5. Make sure you back up facts with cited documents.

Disclaimer The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.

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Introduction

  1. Executive Summary
  2. Company Overview
  3. Market Analysis
  4. Marketing and Sales Strategy
  5. Operations Plan
  6. Management Plan
  7. Financial Data

Cover Page and Table of Contents



Executive Summary

  • This is one of the most important sections of your business plan. It may be the only section that someone reads, so it must be great.5 It will introduce your reader to your business. Some things that can be included in your executive summary include:
  1. Information about your business including date business began, names and functions of the founders, number of employees, location and description of the facilities.6
  2. A mission statement. This can be anywhere from two words to a paragraph.7
  3. A description of your product or concept
  4. A history about the type of business you want to start.
  5. Your marketing and sales strategy.7
  6. Major achievements your company has made that are essential to its success.8
  7. A summary of your competitors and how you differ from them.
  8. An overview of the market.9
  9. Projected sales and profits.5
  10. Your revenue stream.9
  11. A description of your immediate and long-term financial goals.
  12. Your company's growth including financial and market highlights.6
  13. Your cash requirements.
  14. Information about current investors and banking relationships.6
  15. An exit strategy.9
  16. Any fact or information you don't want them to miss.5

Executive Summary Tips

  1. The goal of this section is to stimulate and motivate the investor to learn more.10
  2. It should be between two to five pages long.9 7
  3. Write it last.7
  4. Be brief and use bullet points. Almost everything (except mission statement) is laid out in more detail in your plan.6
  5. Keep the tone positive and upbeat.5
  6. You will want no more than one to three sentences about each topic.11
  7. Finish your executive summary with one to two sentences that answers the question "Why is this a winning business?"11
  8. Use strong, decisive language.11
  9. Read it aloud to see if it flows.11
  10. Tailor the summary to your audience.11
  11. Make sure that what you are asking for is clearly stated in your executive summary.8


Company Overview

  1. A short description of the industry.8
  2. The present outlook and future possibilities.8
  3. Information on any new products or developments that will have an effect (positive or negative) on your business.8
  4. Background on the company including when the company started, office location, legal structure, and stage of development.10
  5. Your company's track record including accomplishments, including product launches, milestones, and partnerships secured.10
  6. Who its principals are, and what they will bring to the business.8
  7. Your company's support systems such as advertising, promotions or customer service.8
  8. List what needs exist in the marketplace that you plan to satisfy and how your products or services will meet these needs.12
  9. List specific individuals and/or organizations that you have identified as having these needs.12
  10. Include any factors that will help make your business a success.12

Company Overview Tips

  1. The goal of this section is to educate the reader about your company's history and explain why your personnel is capable to do the work.10 It will address the present situation of your business.7
  2. This section should be very detailed.13
  3. Start with a summary paragraph and include the finer points in subtopics.13
  4. One of the first things you need to concentrate on is the structure of your business.13
  5. You will need to conduct industry research to complete this section.13
  6. Add charts or graphs that illustrate financial aspects of the business.8
  7. Your product description should be detailed enough that it gives your reader a clear picture of your intentions.8
  8. Emphasize any unique aspects of your business.8
  9. Be sure to explain the factors that will help make your business a success and your investors a profit.8
  10. Keep this section as short as possible while giving an adequate description of everything.8


Market Analysis

  1. What need or demand your product fills.14
  2. Describe your typical customer and discuss how factors such as age, income, sex, lifestyle and status will affect the success of your business.14 7
  3. Where (geographically) your customers will come from.7
  4. Explain your present position in the market.7
  5. Estimate how much the total market will spend on the services or products your business provides.14
  6. State the size of your market.15
  7. What proportion of the market will be repeat customers.16
  8. Explain the historic growth rate of the market.15
  9. Market surveys or polls that back up your product/service.7
  10. Cite any recent articles from trade magazines that discuss information about your industry.15
  11. Include a description of trends and characteristics related to the industry as a whole.15
  12. How much of a market share you feel you will be able to gain and why.15
  13. The levels of your pricing, gross margin levels and any discounts you plan to offer.15
  14. Letters of intent from suppliers or buyers.7
  15. Factual numbers or statistics that back up your analysis.7
  16. What media you will use to reach your target audience.15

Market Analysis Tips

  1. The goal of this section is to prove that you understand the needs of your customer and that your company will be able to fill these needs.10
  2. When you determine your target market, try to narrow it to a manageable size. It can be a mistake to try to be all things to all people.15
  3. If you have several target markets, describe them in separate numbered paragraphs.16
  4. It is important that you illustrate your understanding of the market.14
  5. Don't ignore negative trends or projections. Instead, explain how your company will overcome them.10
  6. Make sure to properly cite your sources within the body of your market analysis.16


Marketing and Sales Strategy

  1. How you will get an edge on your competition to get customers.14
  2. Your promotion strategy (direct mail, personal contacts, sponsoring events, word-of-mouth, trade associations, etc.).14
  3. How you plan to advertise such as Internet, newspaper, television, magazines, telephone book, billboards or other media.14 9
  4. Why the media you have chosen to use is the most effective.14
  5. How marketing is done by others in your industry.7
  6. A description of the content of your promotions or advertising.14
  7. If your pricing policies provides an advantage to your customers.7
  8. Any introductory programs you will have.7
  9. Your involvement in trade or professional organizations.7
  10. How you plan to sell your product.18
  11. An outline of the transaction process between your business and your customers.19
  12. A highlight of what aspects of your product or service will make it sell.14
  13. If you have a sales force, include a sales force strategy. It should include things such as how you will train, recruit and compensate your sales force.18
  14. A projection of your sales potential.8
  15. An explanation of your business's competitive edge.17

Marketing and Sales Strategy Tips

  1. You may need to refer back to your market analysis.14
  2. There is no one way to approach a marketing strategy.18
  3. Make your strategy unique to your company.18
  4. Your strategy should be part of an ongoing self-evaluation.18
  5. Benefits to your customer can be both tangible or intangible.19
  6. Try to use examples or samples to support your promotional tactics.20
  7. Don't forget to include a trade show schedule of places where you'll be exhibiting and a copy of your press kit.20

Operations Plan

  1. A description of your facility.7
  2. An outline of your business's day to day operations.21
  3. Information about the physical plant such as the type of premises, the size, location, drawings of the building, copies of lease agreements, real estate appraisals.21
  4. Information about the equipment used such as what is needed, how much you need, its cost and its worth.21
  5. A legal description and worth of any assets.21
  6. Any special requirements your business needs including copyrights, trademarks, patents, government mandates and zoning permits.21 7
  7. What materials you need and where you will acquire them.21
  8. A description of any product testing, price testing, or prototype testing that you've done.21
  9. How you will keep track of inventory.21
  10. The environmental impact of your business.7
  11. How you will overcome risks that may occur.7
  12. The short term processes and systems that provide your customers with the product or service.10

Operations Plan Tips

  1. The goal of the operations plan is to present the action plan you will use to execute your idea.
  2. The operations plan is where you transform your business concept into reality. It should prove that you are the best person or team to execute the plan.10
  3. Organize milestones into a chart with key milestones on one side and target dates on the other.10
  4. Your milestone projections need to be consistent with the rest of your plan.10
  5. Balance aggression with credibility. You do not want to present a plan where your business grows quicker than possible. However, it should not be be so conservative that it fails to excite potential investors.10
  6. Think of your operations plan as two sections. One section will talk about the stage of development your business is in. The other section will talk about the production process.21


Management Plan

  1. The number of employees.23
  2. Personnel costs.23
  3. Where and how you will find employees.7
  4. The positions held by key personnel.7
  5. Experience of any employees hired.7
  6. Any established sources for information such as attorneys, accountants, marketing consultants, etc.7
  7. What skills are required by your workers.7
  8. Job descriptions.23
  9. Benefits offered to employees including vacations, payroll, promotions etc.24
  10. All employment policies and procedures.23
  11. Information about your board of directors.24

Management Plan Tips

  1. Attach resumes for you and key personnel as appendices.7
  2. The management plan should illustrate that your business has the right human resources to be successful.23
  3. This section should reassure potential investors that the people working for you are more than just a list of names.24
  4. If your business will start with only you, include projections in this section to demonstrate that you've thought out the future growth of your business.22
  5. Mention degrees and Alma Matters when you feel education will carry some influence.25


Financial Data

  1. Break-even analysis.26
  2. Profit and loss statements.26
  3. Details about your operating expenses.28
  4. Sources and uses of funds.7
  5. Projected income statement.7
  6. Cash flow projections.26
  7. Industry ratios.26
  8. All possible risks.26
  9. Sources of funds including venture capital, loans, mortgages, and equity.7
  10. How funds will be used such as purchase of property, construction, equipment, inventory and operating capital.7
  11. A clear exit strategy that illustrates how investors can earn from their investments.10

Financial Data Tips

  1. The goal of this section is to explain how your business will generate returns for your investors.10
  2. The financial data section is always at the back.8
  3. You must support your financial plan with documented research.26
  4. Make sure all the numbers add up.26
  5. Your pro-forma statements should be consistent.10
  6. Have your financial section reviewed by a a reputable accountant.29

Additional Resources

  • If you are looking for more information on how to write your business plan, then you may want to check out some of the following resources:
  1. BusinessTown.com: Why Plan Your Business?
  2. Business Week: Do You Really Need a Business Plan? | Before You Write a Business Plan
  3. CNN Money: A Business Plan That Will Get You a Loan
  4. Entrepreneur.com: Define Your Target Audience to Grow Your Sales
  5. Inc.com: Business Plan Building | Pick the Target Audience, Then Tailor Your Plan
  6. My Own Business: How to Write a Business Plan
  7. The Entrepreneur Network: How to Develop and Write a Business Plan  WARNING: PDF file | Business Plan Outline

Business Plans Samples and Templates

Business Plan Videos


References for How to Write a Business Plan

  1. ↑ Small Business Administration: Write a Business Plan, Business Planning FAQs
  2. ↑ BusPlan.cc: Cover Page
  3. ↑ Longwood Small Business Development Center: Your Business Plan
  4. ↑ American Express Business Plan Writing Resources: Table of Contents
  5. ↑ 5.0 5.1 5.2 5.3 About.com: Business Plan Executive Summary - Parts of a Business Plan  WARNING: Pop-ups
  6. ↑ 6.0 6.1 6.2 6.3 Small Business Administration: Write a Business Plan: Part 1: The Executive Summary
  7. ↑ 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 7.23 7.24 7.25 7.26 7.27 7.28 7.29 Nevada Small Business Development Center: How to Write a Business Plan  WARNING: PDF File
  8. ↑ 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 8.11 8.12 8.13 8.14 8.15 8.16 Entrepreneur.com: Elements of a Business Plan  WARNING: Ad-heavy
  9. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 The Street.com: How to Write a Winning Business Plan
  10. ↑ 10.00 10.01 10.02 10.03 10.04 10.05 10.06 10.07 10.08 10.09 10.10 10.11 10.12 10.13 Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
  11. ↑ 11.0 11.1 11.2 11.3 11.4 About.com: How to Write an Executive Summary  WARNING: Pop-ups
  12. ↑ 12.0 12.1 12.2 12.3 Small Business Administration: Write a Business Plan: Part 3: Company Description
  13. ↑ 13.0 13.1 13.2 13.3 About.com: Business Analysis  WARNING: Pop-ups
  14. ↑ 14.00 14.01 14.02 14.03 14.04 14.05 14.06 14.07 14.08 14.09 14.10 14.11 The Entrepreneur Network: Guide To Writing A Business Plan
  15. ↑ 15.0 15.1 15.2 15.3 15.4 15.5 15.6 15.7 Small Business Administration: Write a Business Plan: Part 2: Market Analysis
  16. ↑ 16.0 16.1 16.2 About.com: Writing The Business Plan: Section 3  WARNING: Pop-ups
  17. ↑ 17.0 17.1 About.com: Business Plan Marketing Strategy - Parts of a Business Plan  WARNING: Pop-ups
  18. ↑ 18.0 18.1 18.2 18.3 18.4 Small Business Administration: Write a Business Plan: Part 5: Marketing and Sales Strategies
  19. ↑ 19.0 19.1 About.com: Writing a Business Plan - Marketing Plan Section of Business Plan  WARNING: Pop-ups
  20. ↑ 20.0 20.1 American Express Business Plan Writing Resources: Advertising and Promotion
  21. ↑ 21.0 21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 About.com: Writing The Business Plan: Section 7  WARNING: Pop-ups
  22. ↑ 22.0 22.1 About.com: Writing a Business Plan - Management Plan Section of Business Plan  WARNING: Pop-ups
  23. ↑ 23.0 23.1 23.2 23.3 23.4 About.com: Business Plan Management Plan - Parts of a Business Plan  WARNING: Pop-ups
  24. ↑ 24.0 24.1 24.2 Small Business Administration: Write a Business Plan: Part 4: Organization & Management
  25. ↑ American Express Business Plan Writing Resources: Support Services
  26. ↑ 26.0 26.1 26.2 26.3 26.4 26.5 26.6 26.7 About.com: Business Plan Financial Plan - Parts of a Business Plan  WARNING: Pop-ups
  27. ↑ Small Business Administration: Write a Business Plan: Part 8: Financials
  28. ↑ About.com: Writing a Business Plan - Financial Plan Section of Business Plan  WARNING: Pop-ups
  29. ↑ American Express Business Plan Writing Resources: Income Statement

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