Business plans can serve several purposes. They can be a way to keep the business on track, a description of a way to pivot in a new direction, or a way for a startup to appeal to investors. Oftentimes they’re a combination of these things.
Every business should have a business plan. Planning out what your goals are and how to get there is extremely important, as well as the other information included in a business plan, such as market research.
Key Takeaways:
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Business plans can be used to keep executives on the same page, pivot the company in a new direction, or coalesce a startup.
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Information that should be included in a business plan is the products and services, market research, a marketing strategy, and a financial plan.
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Business plans are often 20-40 pages in length or 4,000 to 5,000 words, but they can vary tremendously depending on their purpose and style.
What Is a Business Plan?
A business plan is a document that details a business’s basic operational plan. This includes what products and services they offer, their marketing strategy, and their financial plan. A document of this sort can be aimed internally at the executives to keep them on the same page. It also has external uses, such as attracting potential investors.
Business plans are paramount for startups, but all businesses should have a business plan. For startups, their primary purpose is to convince investors that their business strategy is solid. In the case of established companies, they can be used in order to cement the business’s core strategy. It can also help them lay out an expansion plan or a business pivot.
It’s important to note that business plans are not set in stone. They can be altered or rewritten as time goes on. If a company meets a goal set out in its business plan, a new plan can be formulated to point the organization at the next goal. If a business expands or decides to change direction, it can draw up another business plan for that purpose as well.
How to Write a Business Plan
There are certain things that investors and company executives are going to expect to see in a business plan. There are various templates out there to help you format your business plan, including one in this article. They don’t need to be followed to the letter, but they’ll help to organize what you want to put in your business plan.
It’s recommended that business plans be between 20 to 40 pages long. That being said, there can be a huge variation in the length of business plans. Part of it is its purpose. If it’s a small internal report, it should be under ten pages. If it’s a report for a huge corporation that covers all of its operations, it can be over 100.
Every business plan is different, but it’s highly recommended to include these pieces of information in your plan.
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An executive summary. This is your opening description of your business. Be sure to include the organization’s mission statement here, likely as the opening.
It should also give a description of your products and services, as well as basic coverage of other information that will be included in the plan, such as what the market is like, budget information, and a summary of your marketing strategy.
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The offered products and services. Here is where you get in-depth about what you offer as a product or service. This includes details such as the product’s lifespan, price, and why consumers will want your product in particular.
If you have any patents, they should also be listed here. Depending on the type of business, you may also include research and development details or proprietary technology that you have.
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An analysis of the market. It’s important to know how your business will fit into the market. This is where you analyze the competition and explain what would make you stand out. If you’ve found a niche, then you can list close products or services. Or if whatever you plan to sell is in high demand, you can list that as well.
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A marketing strategy. Every good business needs to have a marketing strategy. This is the section where you outline how you plan to market your goods or services and who you’re planning to market them to. Advertising plans should also be included here.
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Financial information. Finances are what allow a company to keep running. This will differ depending on whether you’re a startup or an established company. For an established business, you will lay out how much money you expect to make and what you plan to do with it via financial statements and balance sheets.
For a new business, this will be based on projections. You’ll want to lay out a viable way to build revenue over time in order to attract investors. Usually, it only projects out a few years. If you have any potential investors, include them here.
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A budget. Every company needs a set budget. This will include expenses for required equipment and personnel, such as salaries, development costs, manufacturing fees, and marketing. Having a realistic budget can help you to attract investors and keep the company on track.
As with all writing, it’s important to edit and revise your business plan. If you have the time, it can even help to let it sit for a day or two before returning to it, which will allow you to look at it with fresh eyes. You should also prioritize having someone else read it over for you, preferably someone with some experience in business writing.
Business Plan Template
Business plans, as with most business documents, tend to follow a set format. However, while there is important information that your business plan must contain, breaking the mold can be to your advantage. The business plans that tend to be the most successful are those that don’t follow a template but are unique to the business.
That being said, too much creativity in business communication can be a detriment. So be sure to weigh the pros and cons of your business plan’s creativity.
If you want to block out a business plan by following a template, or if you think a standard-style business plan would serve your company better, then here’s a basic template to follow. It should work for almost any business.
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Title Page. This should be its own page. It should be centered in a readable font.
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The name of the business. This is usually the primary part. It’s better if your company’s name relates to what it does, but it isn’t imperative.
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Your name or the owner’s name. This is more important for startups than established businesses, but including a name doesn’t hurt.
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The date. Knowing when the document was written could be helpful in the future. Also, business communications are routinely dated.
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Executive Summary. As with most openings, your executive summary will go over a bit of everything you plan to tell them later in the business plan.
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Mission statement. This can be clearly defined as its own section, but this author prefers putting it at the forefront.
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Summary of products. What you’re selling and why people will want to buy them.
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Summary of market research. This shows that you did the research and know a bit about the market.
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Summary of the operational plan. It’s important to have a basic plan of how you’re going to achieve what you set out to.
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Market Analysis. This is where you weigh yourself against the competition.
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List competitors. Depending on how many there are, the list doesn’t need to be exhaustive. However, it’s good to know who you’re competing against and to show the executives and/or investors that you’re aware of it.
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Share how you plan to capture a piece of the market. For example, if the market already has a lot of options, such as soft drinks, why would someone choose your soft drinks over the other options?
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Explain who the product or service appeals to. Who is your target market? Is it a part of the market that is typically overlooked, such as minorities? Or is this an iteration that consumers have been asking for?
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Products and services. This is what sets you apart from the others, so don’t be afraid to go into detail – save for giving away operational or proprietary secrets.
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What you’re selling? Describe your product or service.
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Why you’re selling it? If there’s already something to meet the need, why are you diving in? Is your product or service somehow superior? Or is it reaching out to an overlooked part of the market? Or does a fit fill an overlooked need?
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Who you’re selling it to? Who will likely buy your product or pay for your service?
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Marketing and sales. This is where you lay out how people will find out about your product or service and how they’ll receive it.
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How will you advertise? Do you have a basic idea of a campaign? How about a marketing strategy? Does it emphasize your company’s brand?
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Who are you marketing to? Who’s your target market? What’s the best way to reach them?
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How will you spread your message? Include services like social media, traditional advertising, and refining your company’s brand. Are there other good sources, such as magazines, that your target audience tends to read? Or specialty websites?
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How will you distribute your product or service? Do you have a basic plan for how you’ll get your goods or services to your customers? Will it be virtual or shipped? Will you send a representative to them?
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Financial Plan. Finances are what keep a business running. Everyone wants to know how you plan to successfully fund your operations and bring in a profit.
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Budget. This may or may not be its own section. But it’s important to have a budget for operating expenses.
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List potential investors. This is really only if you’re a startup. But the way that startups tend to stay running until they’re solvent is through investment.
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How much revenue will you make? Established businesses will have a much more accurate prediction of revenue than startups. A startup will have to guess as to the revenue they’ll make and find out how well it offsets the costs.
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How quickly do you expect to make a profit? Again, this is for startups or for businesses that are branching out into a new area. Investors are very interested in how quickly the business can become profitable, as well as executives. How deep your pockets play a huge role in how long to wait to become profitable.
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What Is a Lean Startup Business Plan?
Some startups will use a lean startup plan instead of a traditional business plan. The advantages of these are that they’re short and to the point, containing the necessary information at a glance. Most of them are only about a page long and typically laid out like a chart.
However, there are downsides to using a business plan of this sort. Many investors or lenders will ask for additional detail if presented with a lean startup plan, meaning that you may also need to have a full business plan written out. They’re also nontraditional, meaning that some more conservative investors or lenders may be put off by them.
They are faster to produce and cover the important details of a business plan. They can also be an excellent tool in working out the most important parts of your business plan and then using those to expand into your traditional business plan.
Author
Di Doherty
Di has been a writer for more than half her life. Most of her writing so far has been fiction, and she’s gotten short stories published in online magazines Kzine and Silver Blade, as well as a flash fiction piece in the Bookends review. Di graduated from Mary Baldwin College (now University) with a degree in Psychology and Sociology.
