How to Write a Business Plan That Sets You up For Success
The age-old saying, “if you fail to plan you plan to fail” may feel like a well-used cliche, but it’s still a useful phrase to keep in mind… especially when you’re trying to build a successful business. Creating a step-by-step business plan at the beginning of your startup journey will help you map out your action plan and pave the way for future growth. If you aren’t sure how to establish a plan for your startup here’s an introduction into the basic components that every business plan should have.
Elements of a business plan
Most business plans have several elements in common, like an executive summary and a financial analysis. Review the basics here and then do some digging into whether you might also need to include additional sections. Basic business plans should include the following
Executive Summary: The executive summary is a 1-2 page overview of your entire business plan. If you’re asking for something, like funding, clearly state it right in your summary. You can also provide information about why you anticipate that your company will be successful.
Business Description: Here you’ll describe your industry, including its history and any current news or developments. This is also where you’ll describe the new products and/or services that your business intends to offer, though some plans do include a separate “products and services” component that explains things in greater detail.
Marketing Strategy: This important section describes how you’ll handle marketing in your business, including overall sales and marketing costs. Potential investors will want to see how much it costs to acquire new customers, but this section is also a good spot to show off some creativity in your marketing plans.
Competitive Analysis: What are the strengths and weaknesses of your competition? Your business plan will analyze what it’s up against, but it will also identify any strategies or factors that could give you an edge over the competition in your industry.
Management Plan: Your business’s management plan will include information about the people who help manage your business, including key advisors, by explaining their roles and responsibilities. Some business plans also have a separate operations section that outlines the administrative side of the startup.
Financial Analysis: Use this section to explain current and future revenue streams and cash flow, investments, and record any important financial information about the business. If you’re requesting funding, how will you use the money? What is the current financial position of your company?
Do you need a business plan?
As you work on each part of your business plan it’s important to think about the future of your startup. Where do you see your business in 1, 5, and 10 years down the road? Will you be seeking out funding and investors? Answering these questions ahead of time will help you determine whether you need a comprehensive and detailed plan, or a briefer outline that’s simply designed to help your team stay organized.
After thinking about your ultimate goals, the industry you’re in, and other crucial details, you may even find that you don’t need an extraordinarily detailed plan that influences your every business move.