Planning for Success
You've no doubt heard
the expression, "Failing to plan is planning to fail."
Many entrepreneurs
write a business plan only when they need to secure start-up financing.
However, your plan is far more than a document for banks and investors to read;
it's an invaluable roadmap for launching and growing your business.
In order to put your
business concept on paper, you need to think through and research the many
factors that are needed to make sure your business is a success. With a plan,
not only can you spot potential weaknesses, opportunities, and threats, your
plan can help you make informed decisions about your venture before you commit
yourself legally or financially.
Here, we've summarized
the key sections that you'll find in a business plan.
The Seven Key Sections
of a Business Plan
1. Executive summary
Your executive summary
should be 1–2 pages long, and provide an overview of your business concept, key
objectives of your business and your plan, ownership structure, management
team, your product or service offering, target market(s), competitive
advantages, marketing strategy, and a summary of your financial projections.
Your executive summary should be written last, after you've written the rest of
the plan; each paragraph should be a summary of the more detailed, related
section of the plan.
2. Business Overview
In your overview,
include details regarding your business’s history, vision and/or mission,
objectives, and your ownership structure.
3. Products and
Services
Expand upon your
products and services, including features and benefits, competitive advantages,
and, if marketing a product, how and where your products will be produced.
4. Industry overview
The industry overview
is your opportunity to demonstrate the viability of your business by discussing
the size and growth of your industry, the key markets within your industry, how
your customers will buy your products or services, and which markets you’ll be
targeting.
5. Marketing Strategy
Here you describe your
target market segments, your competition, how you'll differentiate your
products or services, and your products’ or services’ unique selling
proposition (USP).
·
Discuss product or service pricing and promotion, including how
your promotional programs will appeal to each of your target market segments.
·
Provide a plan of traditional and guerrilla marketing tactics,
such as tradeshows, press-magnet events, social media marketing (e.g. Facebook,
Twitter, etc.), networking, and print, media, or online advertising. Include
the cost associated with each tactic.
·
Describe how your products or services will be sold (e.g.
storefront, online, wholesalers), and your target markets’ buying cycle.
6. Operations Plan
Provide a profile of
your management team, your human resources plan, your business location(s) and
facilities, your production plan (if selling a product), and an overview of
day-to-day operations.
7. Financial plan
Some believe this is
the most important part of a plan – so much so, it’s worth dedicating up to 80%
of your time to writing this section. You'll need to show three years’ worth of
projected financial statements, including income statements, pro-forma balance
sheets, and monthly cash flow and annual cash flow statements. Summarize each
statement into a few easy-to-understand sentences and put these in a cover page
for the statements. Be sure to document all of the assumptions you used in
forecasting your revenues and expenses.
