If you are an entrepreneur planning to launch yourself into the world of business, you have a lot to think about. It’s possible that creating a business plan hasn’t even crossed your mind yet.
However, this document is an important step toward success. Essentially, a business plan is a diagram or blueprint for your business’s future, outlining the route you intent to take in order to reach your goals.
The U.S. Small Business Administration (SBA) provides helpful advice about how to create an effective business plan. Here are the main categories that the SBA recommends you include in your document:
1. Executive summary – This section is a general overview of your plan. Although you will want this page to appear first in your business plan, it makes the most sense to write it last. The executive summary should explain what your company does, where it is located and what sets it apart from competitors. Consider including your company’s mission statement along with essential facts about the business.
2. Business description – Explain the marketplace gap that your business will fill, outline the demographics of your intended customer base and talk about the unique strengths of your business that will make it successful.
3. Market analysis – This section should describe your specific target market and related information, including your customers’ geographic range, expected purchasing trends, the number of people you intend to serve, what the competition looks like in your particular market and any regulatory restrictions that may impact your business.
4. Business structure and organization – Your business plan should include information about your business entity (limited liability company, sole proprietorship, C corporation, etc.) as well as information about your qualifications as the business owner.
5. Products or services – Describe your particular products or services in a way that highlights their benefits to your target customers. You should also list any patent, trademark or copyright filings that you have made. In addition, include information about any research and development initiatives you have planned.
6. Marketing strategy – How do you plan to advertise your products to your target demographic? Explain your sales plan, how you expect to expand into your particular market and what communication methods (printed brochures, TV ads, etc.) you will use.
7. Funding requests – You may or may not be seeking investors to help fund your business venture, but if you are, this section should outline the funds you need, when you need them and how you intend to use them.
8. Financial projections – Even if you are just starting out and have no hard numbers to provide, you should include prospective financial data. This includes your estimated income, intended budget, expected expenditures and anticipated cash flow statements.
9. Appendix – Don’t include this section with the main business plan, but make sure you write it anyway. You may need to supply it on an as-needed basis to creditors, investors and other parties. The appendix can include your credit history, pictures of your products, business licenses, lease agreements, the names of your business consultants or legal counsel, reference letters and other pertinent information.
Although creating a strong business plan may seem daunting, remember that you don’t necessarily have to do it alone. Consider investing in the services of a corporate law attorney or finding a successful business mentor who can provide the detailed guidance you require for success.