There’s a difference between deciding it’s a good idea to start a business and actually following through with it. You will need to take several steps take to make it official, such as registering your business and creating a website. Another quite large leap to truly test your commitment is to write a business plan.
This document will allow you to formulate your ideas into a streamlined and organized process, as well as set goals for your future. With this business plan template guide, you’ll be able to get started on your very own right away.
What is a business plan?
When you start a business, you should begin by writing your ideas down on paper. Queue the grand business plan: a high-level summary of your venture.
A business plan as an extended version of an elevator pitch. This is because it serves several purposes, such as attracting potential partners, as well as investors and banks when it comes to raising capital. Most importantly though, you’ll be able to use this tool as a roadmap for your own plans and aspirations in order to stay grounded and focused.
Components of a business plan
The business plan template below displays the essential elements you should include in your own:
Products and services
Marketing and operations plan
Management and organization
01. Executive summary
The executive summary should be the strongest component of your business plan. That’s not only because it’s the first part that will be seen by anyone looking at this document, but also because it serves its own standalone purposes too.
We mentioned raising capital above. Well, your executive summary does the grunt work for that. In other words, it’s a necessary piece of information for getting the attention of investors.
In this section, you should give a high level overview of everything included within. Write a few sentences about each of the components of your business plan - company description, products and services, industry analysis, etc. - while leaving your reader intrigued and wanting to know more. It should be short and engaging, at a maximum two pages long.
Although we have listed this part first, you should write it last. Your executive summary will be placed at the beginning of your business plan, but you won’t know what information to include until you’ve completed into the following steps.
02. Company description
The first thing you’ll find yourself writing out is your company description. This piece is pretty straight forward too.
Begin with your business name and the names of your founders. Then, give a background story on your business, as well as the people who started it. Include things like the year and location, your company’s purpose, and your mission statement. Briefly describe your core products/services, but not too much information because you’ll want to save that for the next section.
Discuss the development stage of your business at this moment as well as past achievements you’re proud of. Follow up with your future plans by mentioning your goals, partnered with your plan of action for achieving them. Describe the milestones of these goals in a timeline fashion, thinking in terms of quarters and years. Your current and potential investors and other stakeholders will want to know how your company plans to grow and progress.
03. Products and services
List and explain your current and future products and services in depth. Predict any questions that could arise from someone who knows nothing about them or even the related industry. Answer them extensively, making sure to not leave out a single detail.
If you’re still working on your idea, describe what stage of development you’re in, and the further processes you have to go through. Include diagrams, product images, and other visual components where necessary.
Finish this section by listing your pricing plan, including the cost of the materials and labor, the cost of the final products/services, and the profit you intend to make on each unit.
04. Industry analysis
This is one of the most extensive sections of the business plan template, as it has many lengthy parts. Make sure to perform market research, draw conclusions, and write out the related findings for the following points:
Industry background: Give a background of the industry your business operates in, whether that’s health and wellness, education, or something else. Answer questions like: ‘What’s the current status of the industry?’ and ‘How is it expected to change?’ Discuss the key business players and their offerings.
Competitor review: List and analyze your top competitors and how you plan to compete with them. Perform a SWOT analysis. This is where you’ll write out the strengths, weaknesses, opportunities, and threats of each of these businesses.
Barrier to entry: Explain what makes it difficult for a newcomer to enter the industry. Is it high start up costs? Specific equipment? Patent requirements? Etc.
Target market: Describe exactly what your potential customer base looks like within this industry. What is the size? What are the characteristics of these people?
Assess your business: Noting the areas listed above, assess how your business fits into them. What advantages do you have? What does the demand look like for your specific product or service? How will you reach your audience?
05. Marketing and operations plan
Coming up with a business idea is one thing. Actually selling and delivering it to your potential customers is another. Here is where you’ll detail exactly how you’re going to do that.
It begins with your brand. Start with this brand identity guide, which gives you a background and the steps to establish your own - from the colors and fonts to creating the right online personality for you.
With your brand in place, the next thing to do is explain your advertising and promotion plan, along with your marketing budget. This includes creating a website to display and sell your products or services, and all of the necessary social media channels to reach your customers.
If you’ve done a good job of getting your product or service out to the world, orders will start to come in. The reason you’re thinking this all through ahead of time is because you’ll need to plan how you will fulfill those orders. Explain the labor, supplies, equipment and facility requirements necessary to create and ship orders or perform services.
06. Management and organization
Discuss the people that make your business what it is. Everyone from your founders and executive team to all of the other stakeholders should be listed here.
Stakeholders include Board of Directors and advisors, shareholders, heads of departments and other team members. Even if you haven’t hired all of these people yet, it’s important to show what your venture will eventually look like with all of them on board.
To display all of this, create a visual structure of your stakeholders. A diagram or pyramid of some sort will do the job. Following that, describe the roles of the key players mentioned in your illustration.
07. Financial projections
It’s always important to know how you will be able to sustain your business financially, both for your own sake and for that of potential investors.
In this section, write out the answers to the following kinds of questions:
How much will you need to invest at first?
How much funding are you requesting from investors?
How long until you’ll start earning a profit?
How much profit do you expect to earn in the next year? 3 years? 5 years?
Additionally, you’ll need to be able to manage your finances through budgeting and keeping track of your income and expenses. This is both to understand how much money is coming in and out, and to be able to pay your obligatory taxes. To learn how to do so, turn to this guide to small business accounting.
For this final section, list any additional information that will help readers understand the full picture of your business. If you referenced any visuals, research data, or links in your business plan, you can include the supporting details here.
Also make sure to place in this section your licenses, trademarks and patents, contracts, articles of incorporation, insurance, and appraisals.
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