Nowadays it seems like a new company is started every hour.
While starting a business may seem easier than ever today, entrepreneurs have an uphill battle from the moment they start a business. On average, a new company competes with 25 competitors to differentiate and thrive in its industry.
Aspiring business owners who go blind without a clear, actionable plan for marketing, hiring, finance, and operations face major challenges. For this reason, the creation of a business plan is an essential step in the entrepreneurial process.
In this post, we’ll walk you through the process of filling out your business plan template, like this free, editable version:
Download a free, editable, one-page business plan template.
We know that when looking at a blank page on a laptop screen, the idea of writing your business plan can seem impossible. However, it is a mandatory step if you want to achieve your business dreams.
That’s why we’ve created a business plan template that you can download and use to build your new company. You can download it for free here. It contains prompts for all major parts of a business plan, which are detailed below.
This way you can show them how well organized and well thought out your business idea is and give them answers to any questions.
Recommended Resource: Free Business Plan Template
Build a successful business plan
In the next section, we’ll cover the components that make up a business plan, such as: B. a summary and a company description. But before we get to that, let’s talk about key elements that should serve as the building blocks of your plan.
Basically, your business plan should answer two questions: Why your company and why now?
Investors want to know why your company is entering the market, i.e. what problem it is solving and how it is different from what is currently in the market. You also want to know why now is the right time for your type of product or service.
Too often business plans are too idealistic and not realistic enough. While having a vision is important, your plan must be based on research and data.
So back to the question of why and why now – consider three things:
- Your branch – How does your product or service fit into your industry? Are you targeting a specific niche? Where do you see the industry in the next five to ten years?
- Your target audience – Who are you addressing to? What are the challenges you face? How will your product or service help them in their daily life?
- Your unique selling proposition (USP) – What makes you different from your competitors? Is it your product / service characteristics? Your company values? Price?
Once you know the answers to these questions, you can answer the question: why your business and why now.
How to create a business plan
- Front page
- summary
- Business description
- Line of products and services
- Market analysis
- Marketing plan
- Sales plan
- Legal Notice
- Financial considerations
- attachment
Recommended Resource: Free Business Plan Template
1. Cover sheet
Your business plan should be preceded by a conspicuous cover sheet. This means that you insert a high resolution picture of your company logo followed by your company’s name, address and phone number.
Since this business plan is likely to change hands and be seen by multiple investors, be sure to include your own name, role in the company, and email address on the cover page as well.
You can also add a confidentiality notice at the bottom of this page to protect yourself from the disclosure of your business information. The statement can be as follows: “This document contains confidential and proprietary information, created by [your company name]. If you receive this document, you declare that you agree to treat its contents confidentially and may only use it with the express written consent of. reproduce and / or pass on [your company name]. “
2. Summary
The executive summary of your business plan provides a one- to two-page overview of your company and highlights the most important elements of your plan, e.g. B. Your short and long term goals.
The executive summary is essentially a condensed version of your entire business plan. So remember to get to the heart of this section and only fill it with essential information.
Typically this short section contains:
- A mission statement.
- History and leadership model of the company.
- An overview of competitive advantages.
- Financial forecasts.
- Corporate goals.
- A request from potential investors.
3. Company and business description
In this section, describe in more detail what your company is and why it exists.
Most of the writing in this section should focus on the purpose of your business – what the company will sell, identify the target market, and point out a path to success.
In this part of your business plan, you can also address the following points in your company:
- Mission statement
- Core values
- Team and organizational structure
3. Line of products and services
Here you can find out more about the composition of your company’s product and / or service line. You should include the name of each product or service, its purpose, and a description of how it works (if applicable).
Next, add some color to your sales strategy by outlining your pricing model and markup amounts.
If you’re selling tangible products, you should also explain production and cost, and how these factors are likely to change as you scale.
4. Market analysis
In the Market Analysis section, provide details about the audience you are marketing your business to. This should include the size of your total addressable market, demographic and psychographic data of your market, as well as location analysis for your company’s operational area.
It is helpful to reference your market research documentation in this section, such as a Porter’s Five Forces Analysis or a SWOT Analysis (templates are available here). You can also include them in your attachment.
If your company already has buyer personas, you should include them here as well. If not, you can now use the Make My Persona tool to create them.
5. Marketing plan
As opposed to the market analysis section, your Marketing Plan section should be an explanation of the tactical approach to reach your target audience mentioned above. List your advertising channels, organic marketing methods, messaging, budget, and any relevant advertising tactics.
If your company has a fully developed marketing plan, you can attach it to your business plan. If not, download this free marketing plan template to outline your strategy.
6. Sales plan
It doesn’t matter if your sales department is an office full of business development officers (BDR) or a dozen stores with your products on their shelves.
The point is: all sales plans are different, so be sure to clearly outline yours here. Common topics of conversation are yours:
- Sales team structure and why this structure was chosen.
- Sales channels.
- Sales tools, software and resources.
- Prospecting strategy.
- Sales goals and budget.
As with your marketing plan, it can be useful to attach your completed sales plan to the appendix to your business plan. Here you can download a template for creating your sales plan.
7. Legal Notices
Your investors may want to know the legal structure of your company as it could directly affect the risk of their investments. For example, if you are looking for business partners looking to get involved in a non-corporate or LLC partnership, it means they may have more at stake than their actual investment.
Since this clarification is often required, explain whether you are and / or plan to be a sole trader, partnership, corporation, LLC, or other.
They should also describe the steps you took (or need to take) in order to work legally. This includes licenses, permits, registrations and insurance.
The last thing your investor wants to hear after sending you a large chunk of change is that you are operating without proper approval from the local, state, or federal government.
8. Financial Considerations
Ultimately, investors want to know two things:
- When they get their money back.
- When they start getting returns on their initial investment.
However, in this section, be clear, calculated, and persuasive. It should include:
- Start-up costs.
- Sales forecasts for the next months / quarters.
- Break-even analysis for time and dollars.
- Projected income statement (P&L).
Facts and figures are key here, so be as specific as possible in every position and projection. Also explain the “why” behind each of these sections.
However, keep in mind that information overload poses a risk, especially when it comes to data. So if you have pages upon pages of charts and tables for this section, summarize them into one or two pages and add the rest of the sheets in the appendix. This section should only focus on the most important data points.
9. Appendix
A detailed and well-developed business plan can be between 20 and 50 pages, some even over 80 pages.
In many cases, the appendix is the longest section. Why? Because it includes the supportive materials mentioned in the previous sections. In order not to interrupt the flow of the business plan with graphs, charts and tables, entrepreneurs usually add them in the last section, that is, in the appendix.
Aside from what we mentioned earlier – marketing plan, sales plan, departmental budgets, financial documents – you may also want to include the following in the appendix:
- Promotional material
- Market research data
- License documentation
- Branding assets
- Floor plans for your location
- Mockups of your product
- Renderings of your office space or location design
Adding these parts to the appendix will enrich the reader’s understanding of your business and prove that you have put the work into your business plan without distracting from the main points of the plan.
Use a business plan template to get started
Writing a business plan shouldn’t be an insurmountable barrier to starting a business. Unfortunately for too many it is.
For this reason, we recommend that you use our free business plan template. We are confident that this template is pre-populated with detailed section prompts for all topics in this blog post to help steer your business plan in the right direction.
Editor’s note: This post was originally published in June 2017 and has been updated for completeness.