How can entrepreneurs build a great business plan?
October 15, 2014
Business plans help clarify small business goals, as well as the steps needed to achieve them. In order to attract attention from investors, writing a business plan detailing how you will implement your business’ strategy is imperative.
Learning how to make a business plan can seem daunting, especially when you’re new to running a business altogether. Here are the different pieces that all business plans should have, and why they are important.
- Executive Summary
The executive summary introduces your business and its future goals. This will include a mission statement detailing what your business does, information on your business’ background and history, as well as a general synopsis of the rest of your business plan. This section is meant to be a well-rounded view of your plan as a whole and grab the interest of potential investors early. While the executive summary is found in the beginning of a business plan, it is usually written last because it summarizes the ideas found in the rest of the plan.
- Industry & Competitive Analysis
Identify the markets that your business is looking to be a part of and any potential trends and changes happening within them. Include any information about target customer demographics and how much market share you can realistically gain amongst competitors. It’s important to illustrate that you understand the external factors that come with running your own small business in order to provide context about what you’re up against.
- Management Plan
This section should detail who will be involved with running your business activities, listing who is responsible for each aspect, and any new hires you need to make to fulfil future goals. This section should also include any promotion and hiring strategies you have in place, and the logic behind those decisions.
- Service or Product Offering
Your business plan should detail the type of product or service your business provides to consumers and how it will benefit them. Include any information about the product’s life cycle, research and development and copyright filings.
- Marketing Plan
How do you plan on marketing your product or service to your target demographic? Information on market penetration, pricing and promotional strategies should be included in this portion. Your marketing plan explains how you’ll connect the consumer to what you’re selling and a good strategy is necessary in order to thrive as a small business.
- Funding Request
In order to get funding from potential investors, you should include a funding request in your business plan detailing the breakdown of how the money will be spent, and the timeline for this initial investment and any future investments. Each year in our DNA of an Entrepreneur report, we ask small business owners a number of survey questions, including how they fund their small business. Answers around business financing always vary. Keep in mind that financing for new businesses is incredibly important and this section is meant to close the deal for your business.
- Financial Plan
Your financial plan should include details about any historical financial data for your small business, as well as projected forecasts for future revenue and profits. These are the goals your business will work toward in the future.
Writing a business plan for your small business is an integral component of pushing your startup to the next level. It can help potential investors get a sense of what your business is all about and persuade them to invest their resources with you.
Tell us! Have you ever written a business plan for your small business? How has your business plan helped shape your business goals and the methods used to attain them?