What to Include in a Business Plan

What to Include in a Business Plan

Your business plan is a sales document for potential investors and a required document for any bank loan, it is a blueprint for operations that should be updated at least annually. Make your business plan stand out by preparing a thorough and polished presentation in the following areas:

Executive Summary
Prepare a summary of the business plan sections outlined below in the form of an Executive Summary. This two to three page document should be concise and engaging so the reader will want to delve into the details of the plan. Include only the most important details of the plan and any specific requests for financing assistance.

Company Description
Provide background information about the business in a Company Description section. Detail the location of operations and when the business opened. Special training, qualifications and pertinent experience of key employees is also appropriate for this section. Save detailed resumes for the Appendix discussed below.

Product/Service Offered
Give the reader a comprehensive understanding of the product or service offered and the niche that is fulfilled in the Product or Service Offered section. A complete competitive analysis is laid out later. But, establishing product differentiation by introducing appropriate components of this analysis is done here. Other items to discuss are the timeline for development of new products, manufacturing plans, legal protection of unique products and special technology requirements.

Market Analysis
Document a promising Market Analysis that will show the intended market is vibrant and receptive to a new product or service. Present statistics for market size, growth, trends and market share. The Small Business Administration web-site will get you started with this exercise and trade organizations related to the particular business can often help too. The target customer and pricing strategies should be fully fleshed out as a result of the analysis.

Marketing Strategy
Present a multi-pronged Marketing Strategy. Address advertising, promotion, public relations, pricing and incentives, positioning in the marketplace and alliances with other businesses. Include web-based marketing strategies too or highlight this area in a separate section if internet presence will be a main thrust of the strategy.

Outline how Management/Ownership makes critical decisions and distributes the product or service. A flowchart effectively presents this pictorially for many companies. Note legal structure, key licenses, permits and special training required to operate. Discuss current staffing and expectations for the future.

Financial Statements/Projections
Include historical financial statements (for businesses already in operation) and future projections in Financial Statements/Projections. The services of an accounting professional may be required to provide an accurate picture since this is an important focus for parties reviewing a business plan. Outline realistic key assumptions, such as market share, profit margins, amount of key expenditures and expected financing. The following standard statements are expected in this section: Break-even analysis, cash flow statement, profit and loss statement and balance sheet. If financing is expected, then detail the expected use of the funds.

The Appendix includes additional documents that provide depth to the main sections of the business plan. Resumes, portfolios, sales brochures and market reports are documents that might be included.