1. What Is a Business Plan?
2. Advantages of a Business Plan
3. How to Write a Business Plan

What Is a Business Plan?

Understanding how to make a business plan format is important for starting a new business. A business plan outlines the details of every vital need for the business to be successful. Many investors and creditors are interested in seeing a plan in order to consider your business to be credible. The business plan is a living document, and should change as the vision of the business evolves.

Advantages of a Business Plan

  • Saves money for the business by identifying potential expenses
  • Helps foster creativity and idea generation
  • Creates a unified vision for the business
  • Constructs a big-picture view of the company's goals
  • Provides confidence in the business for potential creditors

How to Write a Business Plan

There are many formats available for a business plan, but there is certain key information that should be included in order to gain the best results. Ultimately, the business plan helps the planner organize their ideas and display them for others to understand.

The key information that should be included in a business plan is:

Cover Letter

The cover letter should indicate the company name, what the document is, and when it was created.

Table of Contents

The table of contents should provide the page numbers for each area of the business plan.

Executive Summary

The executive summary is essentially a snapshot of the business. It should answer all the big-picture questions about the business that a reader may have. Some of these items include the company goals and how you plan to achieve them, and how and when certain deliverables will be reached.

Company Profile or Description

The company profile should give a description of the business and provide business details. This may also include the background of the company and the overall vision, mission, and strategy to be reached. Company advantages can also be highlighted in this section, including the location, or superior products and services offered.

Competitive Analysis

The competitive analysis section focuses on the company's competition. The main competitors of the business should be detailed, along with the market share, demographics, market position, and a SWOT analysis.

Industry Research

The industry research section should indicate the industry in which the business will be part of and the business goals within that industry. It should include details of all the research that has been done for the industry and any risks or benefits, along with the benchmarks of other companies in the industry.

Marketing

The marketing section should provide detail of the potential customers and target market of the business, and all the research obtained in this area. Sometimes this section contains a marketing plan if the business is large enough. A few key areas to cover include market penetration, marketing channels, company growth expectations, and communication details such as advertising and promotional techniques. Design plans for a product may also be included in the marketing section. This is important information that investors will look for and will help detail production, marketing, and budget for producing the product.

Sales

The sales section contains details of how the product or service will be sold to customers. Things to consider include the size of the sales team, the sales avenue that will be used (such as online or in-store), pricing of the products for sale, and sales projections for the future. This will help identify additional questions, such as how the website will be designed for online sales.

Operations

The operations section should include details of how the business will run. Patents, copyrights, and intellectual property details can be included in this section, as well as any existing legal details. This section may also include the organization structure, profiles for the top executives in the company, and business type or legal entity.

Financial

The financial section should provide all of the financial information and expectations for the business. This includes the forecasts of cash flow, profits and losses, and business credit, just to name a few. Details for funding and investing also belong in this section, along with projected financials for a pre-determined amount of time.

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