How do you make a business plan? This is a common question for many aspiring business owners. There are many different types of business plans and they can range in size from a few sentences to hundreds of pages. According to the United States Small Business Administration, business plans generally project 3-5 years ahead and outline the route a company should take to grow revenues. For improved readability, business plans should be broken down into sections. To start, include these eight elements in your small business plan.
8 Steps to Making a Successful Small Business Plan
- Executive Summary
The first section of a business plan is the executive summary. This is the businesses first chance to grab the reader’s attention and let them in on the company’s current financial status as well as future goals. Since the executive summary should describe your overall business plan, it should be the last section written but the first section displayed. Business plans will differ based on if companies are well established or just starting out. Established businesses will have more information to include such as a mission statement, general company information, growth highlights, information about the product or service, financial information and future plans. The Small Business Administration suggests for smaller businesses to talk about their background and the decisions that led them to starting the business, while later stating how the company will succeed and any future plans.
- Business Description
The business description allows the reader insight on basic facts about the company such as ownership, startup date and locations. Remember, what goes into this portion depends on the age of the company but the business description ultimately provides a window into how the business operates and maintains success. The description should be rather short, taking up about 1-2 pages.
- Market Analysis
The market analysis is often written after the business description and describes the business owners market knowledge. The market analysis should include information about industry demographics, target market, market needs, competition, barriers to entry and regulation. Showing extensive knowledge in these areas may help investors to decide whether or not the business is worthy of their investment.
- Organization and Management
The organization and management section of the business plan should include information about the organization and structure of your business. It should provide detailed information about company ownership, structure of management and the board of directors. You can also include profiles of certain people such as directors and managers which should describe their background, what they do and why they were hired. Readers will appreciate specific information about your employees and board members.
- Product or Service Line
Business owners can use the product or service section to describe specifics about their product or service. Describe the benefits of your product or service as you would to potential customers. In addition to including a detailed description, business owners should include information about the products life cycle, intellectual property and research and development activities.
- Marketing and Sales
This section of the business plan should focus on a marketing and sales strategy. Having a defined marketing and sales plan will help create customers and ensure loyalty. According to the Small Business Administration, the overall marketing strategy should include a market penetration strategy, a growth strategy, a channels of distribution strategy and a communications strategy. Next, detail your sales strategy which should include two components. First, a sales force strategy, which details your salespeople and their training tactics. Second, it should include the company’s sales activities, which will include information about your sales prospects.
- Funding request
This section is for those who are seeking outside funding for their business. Business owners should detail their current financial situation, future funding requirements for the next 5 years, how the business will use the funds if they should be received and any financial plans for the future. Business owners should also list out the type of funding they would like and the terms for repayment.
- Financial Projections
Financial projections is the last section of the business plan. Business owners should have a good idea of their financial projections after analyzing the market and competitors. This section should include historical financial data and prospective financial data.
Get Started Today
Once all of this information is recorded, writing your business plan will be quick and easy. If appropriate, include an appendix to organize your plan and make it easier for readers to find certain topics. Also, be sure to update the business plan on an as-needed basis so that it’s always current with market trends.
Does your small business need funding? We can help get your business the funding it needs through factoring your accounts receivable. Give us a call today at 877-308-3712.