How To: Create Your Winning Business Plan
Creating a plan for your business is beneficial for many reasons. It asks you consider your target market, business priorities, objectives, and business needs. Whether you have a formal or informal plan, you should have some strategy written down that holds you accountable and generates measurable results. A traditional business plan is not required for daily operations, but at some point, you may need a formal proposal to present to lenders, supplier, and investors. So let’s discuss the essential elements of a traditional business plan.
Cover Letter
A cover is great to include in a presentation to a lender or investor. Briefly, state why you are applying and why they should consider your proposal. Be sure to thank them for their consideration of your application.
Executive Summary
The Executive Summary provides a basic overview of your business and introduces the contents of your business plan. This portion is crucial as it can either deter or encourage the reader to continue further.
In the executive summary you should highlight:
An overview of the Company
The owner's name and credentials
Your products or services
The target market and competition
Note: We suggest that this portion should be written last as it will be easier to write once you have all of the parts of your business plan complete.
Company Overview
This section consists of a description of your business, addressing your unique value proposition, and stating the target market you serve. Here is your chance to showcase your business.
Be sure to include:
A description of your business purpose.
The needs of your target market.
An explanation of how your products or services meet a demand or need.
A list of the specific customers, organizations, or businesses that will benefit.
Market Analysis
Providing a market analysis demonstrates you have taken into account the business industry, market trends, and competition. If applying for capital from lenders, this section shows that you fully comprehend the risks of your market. A carefully planned analysis reassures lenders you are responsible and will produce a return.
Your market analysis should include:
Industry Description
Target Market Information
Market Share
Pricing Structure
Competitive Analysis
Organization & Management
In this section, you are asked to discuss the operations and management structure that is critical to running your business.
Be sure to highlight:
The Business Structure
Organizational Structure
Ownership Information and their experience
Board of Directors (if applicable)
Service or Product Line
In this section, you are asked to discuss the operations and management structure that is critical to running your business.
The service or product line section of your plan stems from your market research. You should explain the products or services your business offers.
You will want to include:
A description of the problem your product or service solves.
The stage or status of production your product or service.
Factors that could influence your business in the future.
Any existing or pending to file copyrights or patents.
Research you have conducted on your business.
Marketing & Sales
A marketing and sales plan is essential to building a sustainable business. Here are some questions to consider when creating your plan:
Market Entry Strategy- How do you plan to enter your target industry?
Growth Plan-How do you plan to expand your business?
Distribution-How will you distribute your products or services?
Communications- How will you reach your target market?
Sales- How do you plan to sell your products or services?
Sales Leads- How will you identify prospects? How do you generate these leads?
Funding Request
A funding request is used when applying for investments or loans. In this section, you need to discuss how the funding will be distributed and how it benefits your business. Take this as an opportunity to reassure you are trustworthy and that the lender will receive a return on their investment.
Financial Projections
Your financial projections highlight the revenue you expect to generate. A healthy economic forecast demonstrates to lenders that your business will guarantee repayment of their loan. Include a brief analysis of your financial information. Be sure to disclose your ratio and trend analysis for all of your past and prospective financial statements.
Appendix
This section is not part of the main body of your business plan. Instead, it is created on an as-needed basis. Whether you keep the appendix internally or include it in a presentation, it is good to keep this section to keep handy.
Your appendix should include:
Credit history
Resumes of key managers
Pictures of your products
Reference letters
Licenses, permits or patents,
Legal documents
Contracts
Legal information
Now that you know the key parts of a business plan, you are ready to construct one of your own. Be sure to check back each Monday for the latest Business 360° post.
