No matter what the size or age of your business, you need a business plan to stay organized. A business plan is a collection of documents that detail the current state of your business and your plans for future growth. Most often businesses will develop a business plan in order to get financing, but even if you aren’t looking for financing it’s still a good idea to write a business plan.
A business plan will help you define your business, crystallize your market and prepare you for future growth. It will provide your company a structure for the short term and the long term. A business plan may help you identify the strengths and weaknesses of your business, so you can make future plans to build on those strengths and overcome your weaknesses.
Here are several steps to follow in order to build your business plan.
- Get your information in order, including brief descriptions of your product or service, your customer profile, your market profile, a competition analysis and the potential risk of your business. Doing this research beforehand will help make your business plan writing process much easier.
- Write an executive summary. This will serve as the first section of your business plan. It should describe your business purpose, intent and execution. It’s generally a two page account of the information that will be covered in detail later on. Having a compelling executive summary is key in getting your business plan read by potential investors. For more on excellent executive summaries, check out Guy Kawasaki’s advice.
- In the following section, write an in depth description of your company. Expand on the overview in your executive summary. Explain how your company operates, where your offices are located and your main methods of doing business. Talk about the business owners and management team and highlight their skills.
- Explain the product or service that you are offering. Detail how you get the product or service to your market and breakdown the costs associated with delivering the product or service. This section should also include supply sources, if they are used.
- Discuss the market that your product or service will be serving. This is the place to review trends in the industry and how your company fits into the niche. Cover any demographic data on your market and talk about their buying habits. You should also cover your competition in this section and how your company fills the gaps in the market.
- Describe your marketing plan in detail. Creating a business plan is to explain how you’ll market your product or service to your market. The summary should include your advertising channels, your methods and your budget for advertising. You should spell out exactly how you are going to profit from your advertising.
If you’re applying for funding with your business plan, you’ll need to include financial statements like profit and loss statements and budget summaries. This data will help a financial institution determine your credit-worthiness and ability to pay back your debt. For more on the details of what you need to include in a formal business plan, see the Small Business Administration’s advice for business plan creation or register for one of their free business plan building workshop.
Don’t discount the value of writing a business plan, even if you are just starting out. Organizing the state of affairs in your business and planning out your future growth is always a good idea.
Research Analyst, Pacific Business Centers (rebranded as Pacific Workplaces)
Courtney’s research for Pacific Business Centers focuses on tracking emerging business trends and best practices – with an emphasis on how they affect business operations, technology, and office space infrastructure.