Here’s the truth: Every business needs a business plan. There are no exceptions. A business plan serves as a document that outlines who the business is, why it exists, and how it expects to increase success in the short and long term. It’s also a handy directional guideline outlining your major goals, accomplishments, and details about your company — all in one easy to digest location.
You should know: Not all business plans are the same. Some require more details. Others suffice with the barest (but most necessary) pieces of information. The length and details of your business plan are entirely up to you. You may even end up cutting out information by the time you reach the end of the plan. That’s perfectly normal — you’d rather have too much information than too little.
Here are the things I recommend to include in your business plan, regardless of your industry, type of business, and location:
- Executive summary
- Business overview (mission statement)
- Marketing strategy
- Financial inquisitions
The other things you may want to add in are:
- SWOT analysis
- PESTLE analysis
- Digital marketing strategy
- Human resources information
- Business exit strategy
- Management organization
- Implementation timeline
Now, in this article, I’m going to cover how to write the first bullet list — the necessary parts of the business plan.
We do have an article to explain how to incorporate SWOT analysis into your business plan, as well as how to conduct market research before getting started. (if you don’t, you won’t be able to do your business plan effectively).
For now, let’s start with the first couple of necessary business plan tidbits: the executive summary and business strategy.
1. The executive summary
This section is often placed at the beginning of the plan, but it can also go at the end.
In most cases, the executive summary should be between one to two pages in length because this section serves as an overview of the inner and outer workings of your company.
That is to say, what you’ll want to include is an explanation of what your company is, who it serves, critical objectives, competitive advantages, and financial expectations.
Keep in mind this is an overview —meaning you’ll go into detail about each of the above explanations further into the plan. Instead of including every single tidbit of information, summarize each point here instead.
And since the executive summary is often the first part of a business plan, you should dedicate a significant amount of time writing this section. This is the introduction to your company. If you’re going to send this plan to investors or business partners, and you want to make a great first impression, then it’s worth taking the time to polish this section.
2. Business overview (and mission statement)
The business overviews serve to explain the history, development, and future landscape of your business. For instance, when and how was your business established? Why did you decide to create it? What is the main goal (or mission statement) of the company?
In the end, any reader should have a full understanding of who your company is and why it exists today. You may also want to include any fun tidbits of information, like any awards the company has won. Or if it’s been featured anywhere significant to your industry.
Get a little humble-braggy here, if you’d like.
3. Marketing strategy
Alright, now that the reader is familiar with your business, it’s time to discuss marketing. Hopefully, you’ve already created a marketing plan prior to starting your business plan. A marketing plan is a whole other beast and takes a fair bit of time and market research to complete.
Having your marketing plan will also make it easier for you to input the following for your business plan:
- Who your target market is
- What your unique selling proposition (USP)
- Which goods and services you offer
- Current and future marketing strategies (digital, guerilla, and traditional methods if applicable)
On top of this information, you should also include the costs for services and goods, as well as expenses for deploying marketing strategies.
You should always include a marketing section in your business plan., Without marketing, you won’t be able to reach new customers. You’ll also be limiting your chances at selling and closing sales. You can’t be profitable in this day and age without marketing.
4. Financial inquisitions
This section is the most critical part of your business plan. Most (80-90 percent) of your time should be dedicated to addressing the current and projected financials of your business. The information that should be included:
- Monthly, quarterly, and annual cash flow statements
- Expenses (by month, quarter, and year)
- Costs for products, employees, and manufacturing
- Other investments/equity
- Stocks & bonds (if applicable)
You need concrete statements: Income statements, invoices, and official documentation when applicable. With each sub-section, write a couple of sentences explaining what it is. Also, detail the reasoning behind future expenses and revenue projections. The more detailed you are during the financials section, the better.
This part of the analysis delves into profitability and operation costs. You’ll want to detail what these operations details are. If you’re a one or two-person show, then this section will be short. But if you’re a startup, small business, or greater, this section may be lengthy.
Please include any of the following as it pertains to you…
Similarly to the financial section above, for each thing you include, explain what it is, and how it’s necessary for your day-to-day business. You can include costs for each thing you include here, but if it’s already explained in the financial inquisitions, then it’s not necessary here.
How to make a business plan: Conclusion
At this point, you’ve now completed the basis of your business plan! All necessary pieces of information — the executive summary, business overview, marketing strategy, financials, and operations — are completed.
You may wish to add more sections such as timelines, digital marketing strategies, SWOT analysis, funding quests, and business exit strategies. This all depends on the purpose of your business plan. If it’s only ever going to be read by you, then what’s included in this article may be everything you need. If you’re showing it to others, like investors, including a funding request and business exit strategy may be more relevant.
This is all up to you. But even if you decide to not add any more sections, you can sit back and relax, because the most critical pieces of information are already included.
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