How to Write a Business Plan
Whether you’re starting or growing your business, you need a business plan. Your plan will provide the roadmap to achieve the success you want. Your business plan is essentially your answers to a comprehensive list of questions. The first and most important question is this: where do you want your business to go? Stated differently, what do you want your business to look like in three, five or even 10 or more years? What level of revenues and profits do you have at that time? How many employees? How many locations?
Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. All too often, what the business owner desires is buried on page eight. Clearly state what you're asking for in the summary.
Answer these business planning questions:
- Company Analysis: what products and/or services do you offer now and/or what will you develop and offer in the future?
- Industry Analysis: how big is/are your market(s) and how are they changing? What trends are affecting them and do these trends bode well for your future success?
- Competitive Analysis: who are your competitors and what are each of their key strengths and weaknesses? In what areas will you have or gain competitive advantage? How?
- Customer Analysis: who are your target customers? What are their demographic and/or psychographic profiles? What are their needs?
- Marketing Plan: how will your reach your target customers? What promotional tactics and marketing channels will you use? How will you price your products and/or services? What brand positioning do you desire for each?
- Management Team: who comprises your current team and what key hires must you make in order to execute on the opportunity in front of you. Will you build a Board of Advisors or Directors, and if so, who will you seek?
- Operations Plan: what is your action plan? What are the milestones you must accomplish to go from where you are now to where you want to be at year’s end? At the end of five years?
- Financial Plan: how much external funding (if applicable) do you need to build your company? In what areas will these funds be invested? What are your projected revenues and profits over the next one to five years? What assets must you acquire?
The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.
The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.
Design & Development Plan
The purpose of the design and development plan section is to provide investors with a description of the product's design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.
Operations & Management Plan
The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.
Financial data is always at the back of the business plan, but that doesn't mean it's any less important than up-front material such as the business concept and the management team.
Entrepreneur Magazine and Dave Lavinsky , Forbes magazine