Writing a Business Plan
Many entrepreneurs think that the only reason to write a business plan is to convince potential lenders or investors to provide financial backing. While these are good uses, a clear plan can serve as a key important management tool providing a blueprint to which you can benchmark.
A business plan usually has a number of major sections: each serving a unique purpose in the overall document. The following list identifies and briefly describes each of the elements that should make up a comprehensive business plan. The type of business, service and/or products also affect the content; issues relating to inventory, manufacturing, storage, drayage etc., are not relevant if you are a service business such as a consultant.
Even if you do not need all of these sections, at least consider and acknowledge them during the summary. The order in which you present your plan is not necessarily dictated by the order shown, however, it is usual that you include an executive summary, which is preceded only by the cover sheet and table of contents. When formatting the plan, remember that a business plan is a familiar type of document. Keep it simple and don’t be flashy.
The components of a written business plan are:
- Cover page and table of contents: these identify your business and make it easy for readers to find and examine specific sections.
- Executive summary: this is the most important part of your document. It provides a high-level overview of the entire plan.
- Business background: this section provides company-specific information, describing the type of business organization, legal structure, history of the key investors, managers, personnel, and detailed information about the product or service the business will provide.
- Marketing plan: this section should include competitive analysis, marketing and sales support, distribution and pricing information.
- Financials: this section identifies income and expense projections and anticipated timeframes for profitability if the business is a start-up.