Business plans provide small businesses with clarity around their objectives and provide an outline for reaching success. Furthermore, they help attract investors and lenders.
At their core, business plans comprise five core pieces of information. This article will detail them: the executive summary, financials, marketing plan, operations plan and management plan.
The executive summary
An executive summary provides a succinct and engaging overview of your entire business plan. Written after completion, this summary should highlight key points from each section, while being concise enough that investors and lenders don’t become bored reading it all the way through. An ideal executive summary length would be around two pages to avoid overwhelming them with text that won’t entice them.
An effective executive summary begins by outlining your company’s product and how it addresses consumer pain points, followed by an outline of its organizational structure and team. This section should demonstrate to potential investors that your team consists of well-rounded members that can oversee operations successfully, while you should also highlight any USPs (unique selling points) your business possesses in this section.
Finaly, an executive summary must include an overview of your business’s financial information and projections, presented as graphs or tables to make them easier for readers to grasp. Avoid using complex industry jargon but ensure all key figures are described accurately and clearly.
Once your executive summary is finished, it’s advisable to have someone unfamiliar with your business read it and provide feedback. This will help improve writing quality while catching any grammatical errors that might appear. Alternatively, an experienced businessperson might provide their thoughts; they can identify any weaknesses and suggest how best to rectify them. Ultimately, an executive summary serves as a way for you to attract investors by drawing them in quickly.
The financials
A business plan isn’t just useful for seeking funding; it also gives small business owners an understanding of their financial needs and helps them gain clarity regarding them. A comprehensive business plan should include budget, financial projections, funding requests and any funding requests made of them as well as strengths/weakness analysis of your current strengths/weaknesses of business operations as well as setting future goals and plans – just make sure that it can be updated whenever needed!
The operations section of your business plan outlines day-to-day activities and their contribution to meeting goals and objectives outlined elsewhere in your plan. In addition, this section should detail your company structure – how it will be organized and staffed, with short bios of each member of your management team which showcase their experience and qualifications – this aspect of your plan should stand out to investors more than your business concept itself.
Include your marketing and sales plan here as well. Describe how you’ll generate revenue and attract customers while measuring success – this will give investors a clear understanding of your company’s growth potential.
An effective financial section must contain both your current balance sheet and profit and loss statement in an accepted format (Bizally is great at this). These statements must be timely and accurate as they will serve as references when applying for loans and investments. They also can help create financial projections to show investors how your business will perform over the next three to five years; it’s wise to include both optimistic and pessimistic projections so investors can get a glimpse of how you respond under various scenarios.
The marketing plan
An effective marketing plan for small businesses is crucial to its success. A small business plan will identify the most efficient channels of engagement and ensure all campaigns work in unison to form one coherent campaign plan, while providing analytical insight that maximizes every dollar invested into marketing budgets. A well-thought out marketing plan will drive higher engagement levels and fuel expansion of your business.
Preparing a detailed business plan requires time and effort, but will help you set strategic goals with clear paths towards their fulfillment. In addition to that benefit, keeping it up-to-date can demonstrate your company’s dedication to its own success and increase trust between partners, investors, lenders, etc.
The initial section of your plan should include a description of your company and its goals and mission statement, research about industry and market, including an examination of similar businesses to help you assess how successful and viable your venture can be in comparison to existing ones.
The next section should detail your products and services, pricing model, supplies/equipment needs and distribution model. Here is also where any intellectual property you possess such as copyrights/trademarks should be highlighted; additionally you may include information about how your business plans to maintain sustainable profits with high efficiency/low overhead costs.
The operations plan
The operations plan is the section of a business plan that details how you intend to reach your strategic goals. It can include physical details of how your company will produce and distribute products or services, workflows and supply chains as well as department responsibilities for management and staffing purposes. Furthermore, your plan should list any potential risks to the operation as well as ways you will mitigate them.
Depending on the focus of your startup, this section could include strategies for designing custom and limited edition fashion pieces that provide customers with individuality in style, as well as any sales channels or plans for marketing those items.
Your operational plan should also contain a description of your legal structure. Include information such as whether you will operate as a sole proprietorship, partnership or corporation as well as ownership percentages and roles of key members within your management team. If possible, consult a business mentor before finalizing this section of your plan to make sure everything is accurate and comprehensive.
Your product or service should include a detailed description, including specifications, special features and overall appeal. In addition, be sure to provide pricing ranges. Furthermore, any pending or existing copyrights or trademarks should also be mentioned here.
An operations plan is an invaluable asset to any new business, serving both to attract investors and demonstrate your ability to effectively run an operation. Furthermore, using this document as a guide as you embark upon your endeavor is invaluable.
The management plan
A business plan is a formal document outlining the methods, goals and structure of a startup company. It may be required for loans or investors to fund your small business; and can help entrepreneurs organize their ideas and find effective means of reaching their goals. A comprehensive business plan requires careful preparation with clear financial projections that engage potential lenders or investors; charts or graphs can make your plan even more engaging – winning over potential backers more easily!
A small business management plan should contain information about daily operations of the business and how these align with its objectives and goals as outlined elsewhere. It should include an overview of team members and an inventory of each person’s responsibilities – this section should provide as complete a picture as possible of all aspects of operations within the company, while an appendix detailing team member backgrounds, educations and qualifications should be made available as an addendum.
An integral component of any business plan, competitive analysis outlines how your small business will compete against others in its industry. It helps investors and partners understand why your product or service stands out against alternatives available on the market; furthermore, it will enable you to develop your sales and marketing plan more efficiently.
ThoughtCo provides a free business plan template with fictional companies to illustrate each part of a plan. Use this as a starting point when writing your own, to catch any small but vital details you might miss when writing it yourself. Proofread carefully too – spelling errors, punctuation mistakes and grammar issues could turn away investors and lenders! If necessary hire professional proofreaders to get your plan into shape.