Important Information to Include in Your Business Plan
Everyone wants to start a business — well, at least more and more Americans do than ever before. While the initial step into the business world doesn’t necessarily require an MBA, it will demand a well-written business plan. Use this cheat sheet to craft your first draft.
Before starting, do as much research as possible. When you think you have done enough, research some more. What are your product or website’s strengths and weaknesses? Think about the opportunities and disadvantages of the current market. Who is your target demographic?
You will also want to put together an outline before writing your business plan. Consider what your investors will need to know and decide what can wait. Potential funding relies on how well you sell your idea, so prioritize the selling points.
Business plans can range from 10 pages to over 50, but remember that investors won’t be reading for enjoyment. Try to keep it under 20 pages. Here are some elements that are commonly incorporated into a business plan:
Cover Page – Your cover page should include the company name, website and most current contact information.
Executive Summary – The most important part of your plan, this one-page summary should include what your business will do, what market opportunities exist and how you will make money. Lay off the technical terminology. Keep it passionate, yet realistic. Many investors will read the executive summary first, and skip to other sections if something has captured their interest.
Industry – You’re the expert here. This section describes why you should open your business. Assume your investor has no knowledge of the field or industry. Your mission statement or vision for the company should also be here.
Marketing Strategies – Identify your customers and how you will reach them. This analysis should include your market goals, objectives, expenses, methods, the details of your research as well as the initial barriers for getting into the market.
Operations – Explain what and who you will need to run your business. An office? Equipment? Personnel? Be realistic. For example, don’t assume the entire office can share one computer.
Finances – Project your cash flow, usually for a minimum of one year. Make sure to include future profits and losses, and a balance sheet projection for when you will break even and begin to track profits.
Stay focused and keep it real. Chances are that investors will share your passion if you give it to them straight. Show them your hard work and professionalism by revising and editing your business plan until you are sure it’s as perfect as possible. It would be worth it to pay a freelance editor or professional service to copyedit your plan.
With a business plan, you are ready to take that next step on the road to success. Time to say good-bye to the lemonade stand and start dreaming of that coffee shop around the corner. Or better yet, the roasting facility across town.