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Updated: Aug. 30, 2024
If you want to start a business or have a current business, you must have a business plan in order to grow that business. According to the U.S. Small Business Administration (SBA), “All capital sources will want to see your plan for the start-up and growth of your business. If you don’t have a business plan, make writing one your first priority.”
On an ongoing basis, the business plan is what keeps your business going in the right direction and gives you a way to measure your progress. It quantifies and helps you measure the work that will be involved and functions as the roadmap to get you where you want to go.
To help you understand this blueprint for your long-term success, here’s a comprehensive guide to business plans and how to write one.
A business plan lays out the goals, strategies, and financial projections of your business. It expounds on the different parts of your operations, from the products or services you offer to your marketing and sales strategies and even your team.
Furthermore, a business plan informs readers about your estimated revenue and operational costs. It even includes a funding request to investors, which is important if you’re opening a business.
Simply put, business plans:
Need some more convincing that you need a business plan? Here are the top 5 reasons to get a business plan together:
Understand that a business plan plays many roles in any organization, new or old. It represents who you are today and who you will be tomorrow along with a detailed “roadmap” to ensure you and your business gets there safe.
There will be times in your business life where you need financial assistance to either stabilize or grow. You need to be able to show to possible lenders and grant makers what you need the money for and how you intend on using it for the business.
Many times, the first impression will not be made by you, but your business plan and application. A business plan is a critical first step in this very difficult and frustrating process.
Although the actual funding comes from a bank, you will need to impress the government agency approving the project.
Our business plans are focused on meeting the SBA’s very specific needs. Remember, you are not alone. We have professional advisers who can assist you through the planning process.
A business plan is a great tool for promoting an idea, an active project, or an active company looking to go to the next level financially.
The difference between a good business plan and a great business plan is the style in which it is written. We write every plan to meet the startup, 2nd year, and 3-year growth goals.
And, at some point, you’ll want a real valuation of your business. A business plan will help determine that value. In addition to your financial statements, many investors and business experts will use your business plan to fully understand the competitive market, your growth strategy, and your unique products or services.
As you know, clarity is key to success when building a brand, culture and evolving environment that can proficiently manage customer service, products and finances. Everyone involved should understand the objectives, expectations and requirements for fulfillment.
A business plan ensures this by creating alignment among founding partners with consistent messaging and missions. Within your business plan, you’ll strategically plan your partnership arrangements and duties. It’s important that everyone involved is on the same page.
Finally, if you manage employees, a good plan with a clear vision, mission statement, and values show them where the company is headed and what it aims to accomplish. As a result, your business gains, motivates, and retains top talent.
Apart from the reasons we’ve mentioned above, you’ll need a business plan to:
Business plans come in several types, including traditional and lean startup plans.
Most business owners write traditional business plans that follow a conventional format and explain each area of their operations. These plans take more effort to develop and contain more pages.
Conversely, lean startup business plans are sometimes used for new businesses. While written in a conventional format, they include the most important details of what your plan covers. Lean business plans can be made in an hour or less and show all of your key points on one page.
In addition to traditional and lean startup plans, entrepreneurs may develop and present other types of business plans. For example, a feasibility business plan discusses your product or service, while an internal business plan highlights your company’s objectives, strategy, and performance.
A business plan includes the following:
Every business plan needs an organized outline and the critical points covered by its different sections. Here’s a step-by-step guide to help you make a logically structured and strong plan.
As the first section of your plan, the executive summary condenses the crucial information outlined in it. This part provides readers with a quick introduction to your business that interests and invites them to read further.
In this section, you tell reviewers about your company, its purpose, unique selling proposition(s), and long-term strategy. Your company description should, at least, cover the following:
It’s crucial to offer your products or services to the right people. Your choice could help your business succeed or lead to less than expected profits, making market analysis a significant part of your business plan.
This section should explain whether your product or service is in demand, where your business stands in the market, and how competitive your target market is, all backed by meticulous research.
For these parts of your business plan, start by mentioning the type of entity you’ll establish. Do you own an S corporation, C corporation, limited liability company, partnership, or sole proprietorship?
After defining your company’s legal structure, present its internal structure through an organizational chart. It should describe the roles, responsibilities, and relationships between key team members. Also, explain how each person in your team would help your business succeed.
Typically, you’d mention your goods or services in most sections of your business plan. But to give interested readers a closer look at them, you should write a section with the information they need to know.
More general information can be ideal for introducing multiple goods, whereas a set number of items should have more details about them.
This step helps you define your ideal customer through demographics such as location, age, educational background, and behavior.
The characteristics you use will depend on your product. Just make sure to choose specific demographics that describe your target market perfectly and inform your business decisions.
Your ideal customer is also key to your marketing strategy. A marketing plan summarizes your current decisions and future strategy, keeping how your idea suits your target market perfectly in mind.
Many marketing plans discuss four important points, with the amount of information included varying depending on your business and your readers. Your pricing, product, marketing strategy, and target channels and markets should be covered in your marketing plan.
Logistics and operations allow you to introduce your unique idea to your target customers and achieve your business objectives. When planning for these parts of your business, discuss all the aspects involved, from your suppliers to inventory management.
Ultimately, your logistics and operations plan should show that you understand your supply chain well and you’ve devised solid contingency plans to mitigate potential risks.
Even with a brilliant idea and tremendous effort and resources spent on it, your organization’s financial health determines its success. It’s important to remember that your prospective investors and partners will choose profitable and thriving businesses for their future ventures or projects.
Although your financial plan can be concise or more detailed based on your audience and goals, you’d want it to include an income statement, balance sheet, and a cash-flow statement. Consider covering financial data and projections, as well.
Here’s the deal…if you’re serious about getting cash to start your business or you’re just starting off, business plans are a must. That’s because a business plans is essentially a management tool, identifying potential challenges and providing you with strategies for growth.
So, ask yourself this… Do you want the key to insure your business’s success? Do you want to have a dedicated business plan advisor who will write your business plan for you? How about getting a fully customized business plan that is specifically designed for your needs? If you said yes to any of these, Inc Authority can help!
Incorporating is the most powerful thing you can do to legitimize your startup. And at IncAuthority.com, our setup LLC services are 100% free. Always. So, don’t wait. Form your new LLC today and enjoy the protection due to you and your business under the law.
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