You’ve determined that you have a viable business idea, and are ready to launch your startup. However, before you can begin selling your offerings or even consider incorporating the company, you’ll need to draft a business plan.
Traditional business plans are generally anywhere between 30 to 40 pages long, which can feel intimidating to novice entrepreneurs. Where do you even start with this kind of document? Don’t worry: writing a business plan is not as complicated as it seems.
If you follow this specific framework,you should be able to draft a business plan, referring back to this asset often as a blueprint that’s constantly changing and growing. You might even find you have so much to share that it goes beyond the 40-page mark!
Here are the essential elements to include in your business plan
Executive summary
This is your startup’s brief synopsis. Essentially, it sums up who you are and what we need to know about your business. An executive summary is generally no longer than two pages, and answers the following questions:
- What does your business do?
- Which industry is the startup in and where is it located?
- When did the company start?
- Why are consumers interested in your offerings?
- How does the company make money?
Business description, concept and strategy
Now that we have a summary understanding what your company does, it’s time to delve into the business. Use this section to explore your startup more in-depth, in order to focus on the following details:
- How does your product or service work?
- Where did the idea for these offerings come from?
- What makes your products and services unique?
Additionally, you’ll use this section of a business plan to expand on your company’s goals. Outline the goals for your business, steps necessary to take to reach them, and the startup’s goal timeline.
Related: How to Prepare Your Startup for the Year Ahead in 2020
Industry analysis
This section of a business plan covers who or what makes up your competition. Every business has competitors, even if they are indirect (meaning that they may challenge your startup in the future).
You should be able to know, at a glance, which businesses are your competitors. Understand what the competition is currently offering, their pricing, and how they serve their customers. Analyze what would make consumers choose your products over a competing company.
Market analysis
Who makes up your target audience? A market analysis in a business plan outlines your ideal customer and his or her demographic profile. Think beyond what a customer may want, too. In a market analysis, you’ll study the needs of your customer and how your business can not just meet those needs, but anticipate and meet future needs.
Organization and management overview
This is your time to personally shine! An organization and management overview details more information about the company’s individuals. In this section of the business plan, you’ll include your background, relevant experience and core business responsibilities.
If you have any employees or business partners, you must also include their background information and roles, as well. This should include their work background, the date they were hired, and the role they were hired for in the company.
Financial projections
If you plan on getting investors on board, you’ll need financial documents to show that your startup is profitable. Or, proof that the company will earn a profit in the near future. This section is less focused on writing and more focused on tables and charts that cover the following numbers:
- Sales forecast
- Cash flow statement
- Profit and loss statement
- Expenses budget
- Break-even analysis
- Balance sheet for at least three years out into the future
Appendix
As you wrap up your business plan draft, you may find little leftovers that need to be included… somewhere. Where should you put them? The appendix works nicely for items like partnership agreements and letters of incorporation.
Remember: Your business plan is a working document
Do you need to revise an existing timeline for reaching your goals? Are you seeking investors for capital, so you feel the need to create a financing request?
You may always return back to your business plan and edit accordingly. Revise and reevaluate as you see fit in order to put your business on the most direct track to success.
Source: StartupNation
Amenorhu kwaku is an author, internet marketer, and entrepreneur. He is the founder of SuccessValley, a network community for students and aspiring entrepreneurs. He is also the founder of Republik City News and Whoop, a news portal and a business directory.
