How to Write a Business Plan

Writing a business plan is an easy way to help create a focus for your business and educate others about it. A well composed business plan 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 process, step by step.

A business plan is best described as a resume for your business. It provides a description of your business as well as identifying goals and providing a road map for the future. It can be used to help you get a loan or investors and can be a way of informing your personnel, suppliers and others about your company.

This page gives information on the most essential elements of a business plan including the Executive Summary, Company Overview, Market Analysis, Marketing and Sales Strategy, Operations Plan, Management Plan, and Financial Data.

Your business plan should start with a cover page and a table of contents. You will want to make your business plan look as professional and conservative as possible.BusPlan.cc: Cover Page You will want to compile your business plan in a loose leaf binder so you can make changes as necessary.Longwood Small Business Development Center: Your Business Plan You will also want to include a table of contents. All the pages of your business plan should be numbered.American Express Business Plan Writing Resources: Table of Contents

• 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.About.com: Business Plan Executive Summary - Parts of a Business Plan 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.Small Business Administration: Write a Business Plan: Part 1: The Executive Summary
2. A mission statement. This can be anywhere from two words to a paragraph.Nevada Small Business Development Center: How to Write a Business Plan
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.Nevada Small Business Development Center: How to Write a Business Plan
6. Major achievements your company has made that are essential to its success.Entrepreneur.com: Elements of a Business Plan
7. A summary of your competitors and how you differ from them.
8. An overview of the market.The Street.com: How to Write a Winning Business Plan
9. Projected sales and profits.About.com: Business Plan Executive Summary - Parts of a Business Plan
10. Your revenue stream.The Street.com: How to Write a Winning Business Plan
11. A description of your immediate and long-term financial goals.
12. Your company's growth including financial and market highlights.Small Business Administration: Write a Business Plan: Part 1: The Executive Summary
13. Your cash requirements.
14. Information about current investors and banking relationships.Small Business Administration: Write a Business Plan: Part 1: The Executive Summary
15. An exit strategy.The Street.com: How to Write a Winning Business Plan
16. Any fact or information you don't want them to miss.About.com: Business Plan Executive Summary - Parts of a Business Plan

1. The goal of this section is to stimulate and motivate the investor to learn more.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
2. It should be between two to five pages long.The Street.com: How to Write a Winning Business Plan Nevada Small Business Development Center: How to Write a Business Plan
3. Write it last.Nevada Small Business Development Center: How to Write a Business Plan
4. Be brief and use bullet points. Almost everything (except mission statement) is laid out in more detail in your plan.Small Business Administration: Write a Business Plan: Part 1: The Executive Summary
5. Keep the tone positive and upbeat.About.com: Business Plan Executive Summary - Parts of a Business Plan
6. You will want no more than one to three sentences about each topic.About.com: How to Write an Executive Summary
7. Finish your executive summary with one to two sentences that answers the question "Why is this a winning business?"About.com: How to Write an Executive Summary
8. Use strong, decisive language.About.com: How to Write an Executive Summary
9. Read it aloud to see if it flows.About.com: How to Write an Executive Summary
10. Tailor the summary to your audience.About.com: How to Write an Executive Summary
11. Make sure that what you are asking for is clearly stated in your executive summary.Entrepreneur.com: Elements of a Business Plan

• This is also called "company analysis," "business analysis," or "company description." This section will give an overview on how the elements of your business fits together.Small Business Administration: Write a Business Plan: Part 3: Company Description Some things it can include are:

1. A short description of the industry.Entrepreneur.com: Elements of a Business Plan
2. The present outlook and future possibilities.Entrepreneur.com: Elements of a Business Plan
3. Information on any new products or developments that will have an effect (positive or negative) on your business.Entrepreneur.com: Elements of a Business Plan
4. Background on the company including when the company started, office location, legal structure, and stage of development.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
5. Your company's track record including accomplishments, including product launches, milestones, and partnerships secured.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
6. Who its principals are, and what they will bring to the business.Entrepreneur.com: Elements of a Business Plan
7. Your company's support systems such as advertising, promotions or customer service.Entrepreneur.com: Elements of a Business Plan
8. List what needs exist in the marketplace that you plan to satisfy and how your products or services will meet these needs.Small Business Administration: Write a Business Plan: Part 3: Company Description
9. List specific individuals and/or organizations that you have identified as having these needs.Small Business Administration: Write a Business Plan: Part 3: Company Description
10. Include any factors that will help make your business a success.Small Business Administration: Write a Business Plan: Part 3: Company Description

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.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008) It will address the present situation of your business.Nevada Small Business Development Center: How to Write a Business Plan
2. This section should be very detailed.About.com: Business Analysis
3. Start with a summary paragraph and include the finer points in subtopics.About.com: Business Analysis
4. One of the first things you need to concentrate on is the structure of your business.About.com: Business Analysis
5. You will need to conduct industry research to complete this section.About.com: Business Analysis
6. Add charts or graphs that illustrate financial aspects of the business.Entrepreneur.com: Elements of a Business Plan
7. Your product description should be detailed enough that it gives your reader a clear picture of your intentions.Entrepreneur.com: Elements of a Business Plan
8. Emphasize any unique aspects of your business.Entrepreneur.com: Elements of a Business Plan
9. Be sure to explain the factors that will help make your business a success and your investors a profit.Entrepreneur.com: Elements of a Business Plan
10. Keep this section as short as possible while giving an adequate description of everything.Entrepreneur.com: Elements of a Business Plan

• The market analysis will help illustrate your knowledge of your industry and your customer (otherwise known as your target market) while explaining how your company will meet the needs or provide a service to this market.The Street.com: How to Write a Winning Business Plan It can include:

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

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.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
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.Small Business Administration: Write a Business Plan: Part 2: Market Analysis
3. If you have several target markets, describe them in separate numbered paragraphs.About.com: Writing The Business Plan: Section 3
4. It is important that you illustrate your understanding of the market.The Entrepreneur Network: Guide To Writing A Business Plan
5. Don't ignore negative trends or projections. Instead, explain how your company will overcome them.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
6. Make sure to properly cite your sources within the body of your market analysis.About.com: Writing The Business Plan: Section 3

• YouTube Video: Writing the Marketing Plan Section of Your Business Plan (Time: 5:39)

• This is your action plan to get business.The Entrepreneur Network: Guide To Writing A Business Plan It should include information about your customers and how you will get your product or services to them.About.com: Business Plan Marketing Strategy - Parts of a Business Plan Some things you may want to include:

1. How you will get an edge on your competition to get customers.The Entrepreneur Network: Guide To Writing A Business Plan
2. Your promotion strategy (direct mail, personal contacts, sponsoring events, word-of-mouth, trade associations, etc.).The Entrepreneur Network: Guide To Writing A Business Plan
3. How you plan to advertise such as Internet, newspaper, television, magazines, telephone book, billboards or other media.The Entrepreneur Network: Guide To Writing A Business Plan The Street.com: How to Write a Winning Business Plan
4. Why the media you have chosen to use is the most effective.The Entrepreneur Network: Guide To Writing A Business Plan
5. How marketing is done by others in your industry.Nevada Small Business Development Center: How to Write a Business Plan
6. A description of the content of your promotions or advertising.The Entrepreneur Network: Guide To Writing A Business Plan
7. If your pricing policies provides an advantage to your customers.Nevada Small Business Development Center: How to Write a Business Plan
8. Any introductory programs you will have.Nevada Small Business Development Center: How to Write a Business Plan
9. Your involvement in trade or professional organizations.Nevada Small Business Development Center: How to Write a Business Plan
10. How you plan to sell your product.Small Business Administration: Write a Business Plan: Part 5: Marketing and Sales Strategies
11. An outline of the transaction process between your business and your customers.About.com: Writing a Business Plan - Marketing Plan Section of Business Plan
12. A highlight of what aspects of your product or service will make it sell.The Entrepreneur Network: Guide To Writing A Business Plan
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.Small Business Administration: Write a Business Plan: Part 5: Marketing and Sales Strategies
14. A projection of your sales potential.Entrepreneur.com: Elements of a Business Plan
15. An explanation of your business's competitive edge.About.com: Business Plan Marketing Strategy - Parts of a Business Plan

1. You may need to refer back to your market analysis.The Entrepreneur Network: Guide To Writing A Business Plan
2. There is no one way to approach a marketing strategy.Small Business Administration: Write a Business Plan: Part 5: Marketing and Sales Strategies
3. Make your strategy unique to your company.Small Business Administration: Write a Business Plan: Part 5: Marketing and Sales Strategies
4. Your strategy should be part of an ongoing self-evaluation.Small Business Administration: Write a Business Plan: Part 5: Marketing and Sales Strategies
5. Benefits to your customer can be both tangible or intangible.About.com: Writing a Business Plan - Marketing Plan Section of Business Plan
6. Try to use examples or samples to support your promotional tactics.http://www133.americanexpress.com/osbn/Tool/biz_plan/salesmkt/advt/index.asp Advertising and Promotion
7. Don't forget to include a trade show schedule of places where you'll be exhibiting and a copy of your press kit.http://www133.americanexpress.com/osbn/Tool/biz_plan/salesmkt/advt/index.asp Advertising and Promotion

• The operations plan will show what you have done to get your business off the ground, what needs to be done and illustrate that you understand the process necessary to deliver your product or service to your customer.About.com: Writing The Business Plan: Section 7 Some things you may want to include in your operations plan include:

1. A description of your facility.Nevada Small Business Development Center: How to Write a Business Plan
2. An outline of your business's day to day operations.About.com: Writing The Business Plan: Section 7
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.About.com: Writing The Business Plan: Section 7
4. Information about the equipment used such as what is needed, how much you need, its cost and its worth.About.com: Writing The Business Plan: Section 7
5. A legal description and worth of any assets.About.com: Writing The Business Plan: Section 7
6. Any special requirements your business needs including copyrights, trademarks, patents, government mandates and zoning permits.About.com: Writing The Business Plan: Section 7
7. What materials you need and where you will acquire them.About.com: Writing The Business Plan: Section 7
8. A description of any product testing, price testing, or prototype testing that you've done.About.com: Writing The Business Plan: Section 7
9. How you will keep track of inventory.About.com: Writing The Business Plan: Section 7
10. The environmental impact of your business.Nevada Small Business Development Center: How to Write a Business Plan
11. How you will overcome risks that may occur.Nevada Small Business Development Center: How to Write a Business Plan
12. The short term processes and systems that provide your customers with the product or service.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)

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.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
3. Organize milestones into a chart with key milestones on one side and target dates on the other.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
4. Your milestone projections need to be consistent with the rest of your plan.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
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.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
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.About.com: Writing The Business Plan: Section 7

• The management plan describes the structure of your management team and personnel.About.com: Writing a Business Plan - Management Plan Section of Business Plan This section can include:

1. The number of employees.About.com: Business Plan Management Plan - Parts of a Business Plan
2. Personnel costs.About.com: Business Plan Management Plan - Parts of a Business Plan
3. Where and how you will find employees.Nevada Small Business Development Center: How to Write a Business Plan
4. The positions held by key personnel.Nevada Small Business Development Center: How to Write a Business Plan
5. Experience of any employees hired.Nevada Small Business Development Center: How to Write a Business Plan
6. Any established sources for information such as attorneys, accountants, marketing consultants, etc.Nevada Small Business Development Center: How to Write a Business Plan
7. What skills are required by your workers.Nevada Small Business Development Center: How to Write a Business Plan
8. Job descriptions.About.com: Business Plan Management Plan - Parts of a Business Plan
9. Benefits offered to employees including vacations, payroll, promotions etc.Small Business Administration: Write a Business Plan: Part 4: Organization & Management
10. All employment policies and procedures.About.com: Business Plan Management Plan - Parts of a Business Plan
11. Information about your board of directors.Small Business Administration: Write a Business Plan: Part 4: Organization & Management

1. Attach resumes for you and key personnel as appendices.Nevada Small Business Development Center: How to Write a Business Plan
2. The management plan should illustrate that your business has the right human resources to be successful.About.com: Business Plan Management Plan - Parts of a Business Plan
3. This section should reassure potential investors that the people working for you are more than just a list of names.Small Business Administration: Write a Business Plan: Part 4: Organization & Management
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.About.com: Writing a Business Plan - Management Plan Section of Business Plan
5. Mention degrees and Alma Matters when you feel education will carry some influence.American Express Business Plan Writing Resources: Support Services

• This section of the plan should prove that the company is viable.About.com: Business Plan Financial Plan - Parts of a Business Plan All plans will contain financial projections. If your plan is about an existing business, this section should also include historical data.Small Business Administration: Write a Business Plan: Part 8: Financials However, it can also include:

1. Break-even analysis.About.com: Business Plan Financial Plan - Parts of a Business Plan
2. Profit and loss statements.About.com: Business Plan Financial Plan - Parts of a Business Plan
3. Details about your operating expenses.About.com: Writing a Business Plan - Financial Plan Section of Business Plan
4. Sources and uses of funds.Nevada Small Business Development Center: How to Write a Business Plan
5. Projected income statement.Nevada Small Business Development Center: How to Write a Business Plan
6. Cash flow projections.About.com: Business Plan Financial Plan - Parts of a Business Plan
7. Industry ratios.About.com: Business Plan Financial Plan - Parts of a Business Plan
8. All possible risks.About.com: Business Plan Financial Plan - Parts of a Business Plan
9. Sources of funds including venture capital, loans, mortgages, and equity.Nevada Small Business Development Center: How to Write a Business Plan
10. How funds will be used such as purchase of property, construction, equipment, inventory and operating capital.Nevada Small Business Development Center: How to Write a Business Plan
11. A clear exit strategy that illustrates how investors can earn from their investments.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)

1. The goal of this section is to explain how your business will generate returns for your investors.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
2. The financial data section is always at the back.Entrepreneur.com: Elements of a Business Plan
3. You must support your financial plan with documented research.About.com: Business Plan Financial Plan - Parts of a Business Plan
4. Make sure all the numbers add up.About.com: Business Plan Financial Plan - Parts of a Business Plan
5. Your pro-forma statements should be consistent.Growthink: How to Write a Business Plan for Raising Venture Capital (April 16, 2008)
6. Have your financial section reviewed by a a reputable accountant.American Express Business Plan Writing Resources: Income Statement

• Expert Village: How to Prepare Pro Forma Financial Statements for a Business Plan (Time: 0:55)

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