Time To Complete: Approximately 180-400 hours
A business plan is a document that clearly communicates what it is your company does, identifies your goals, and shows potential investors how you plan on being successful.
business plan acts as a road map.
By giving you an idea about what audience to target and how to go about doing it.
Creating a business plan also gives your business focus so you can put all the puzzle pieces together and create a strategy and plan for how the company is going to succeed.
Below I outline the major areas of a business plan
- Executive Summary
- Mission Statement, Core Purpose, and Core Values
- Product Description
- Market Analysis
- Industry Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Projections
Do Your Research
The first step to any business plan is simple: research. If a company is to be successful it is absolutely crucial that the owners know as much as they can before the business gets off of the ground.
There are three areas that every entrepreneur should analyze before starting a business: the company’s industry, competition, and market.
An industrial analysis is a snapshot of the current conditions of your industry at the present time and helps entrepreneurs understand the different factors at work (market, political, economic) within a given industry. Business owners can then identify the various threats and opportunities facing their business, ultimately helping them identify ways to create competitive advantages.
Researching what your potential competitors are doing is also extremely important. Therefore, the competitive analysis of a business plans should include an assessment of the differences between a firm and its competition, and a detection and examination tool to define the factors that cause these differences.
After researching your industry and your competitors, a good business owner will perform a market analysis. A market analysis is conducted to define and determine the attractiveness of a given market and to understand its evolving opportunities and threats as they relate to the strength and weaknesses of a particular business. The focus of this section should be on your target market, or the people you intend to sell your products/services to.
Create a Marketing Plan
After you completed your research, it is time to think about how you are going to market your product. The first step is to clearly define what your company is selling. This section will analyze the features of your product or service and define the unique selling point (USP) of your product.
The next step is to define your mission statement, core purpose, and core values. This section represents the identity of the company and shows potential investors what you wish to accomplish and how you will go about doing so.
Now that you have defined what your product or service is and your companys values, you can now create your marketing strategy. The marketing plan includes a sales forecast, marketing goals, your market position, and much more. The purpose of this section is to give detailed actions to be taking in order for your company to achieve sales success.
Organize Your Company
Making sure that the structure of your company is structurally sound is just as important as defining your sales goals. If there are any weaknesses in your company it is critical to find and fix them immediately. A solid operations plan will go a long way to insure your companys success. The operational plan will tell potential investors how you are going to get your product/service out to market. That is, how are you going to get your product out of the production stage to the doorstep of your target customer.
The management team section describes the team that will help you succeed in building your business. It will also describe how employees will be selected, trained, and rewarded and what service providers your company will need in the future.
You will also create financial projections in order to give you an idea of how your business is performing according to the market assumptions and the business model you choose. The financial statement should be projected out month by month for the first year and then annually for the next two years and include metrics such as startup expenses, assumptions, sales costs, operating costs, and cash flow.
After you have completed the nine sections described earlier, you will create an executive summary, which will summarize your business into a one page document. It will act as your pitch in order to impress potential investors and anyone who does not know about your company. The time it takes to complete the business plan writing process should take at least 200 hours. You can take a look at one of our sample business plans at any time.
Next, we will discuss how to write an Executive Summary.