Business Plan Basics

Business Plan Basics
Writing a business plan can help you clarify your business purpose and goals and help you stay on track. Your business plan provides a blueprint of your business in just a few pages. Taking the time to write your business plan is time well spent. If you have already started your business, even if you’ve been running it for years but never wrote a business plan, writing one can be a valuable exercise and help make future business decisions much easier.

Some business plans are huge, but length is no indicator of how good a plan is. If you are seeking financial assistance, you will need a formal business plan and should follow the “standards” of what elements are found in a typical business plan. However, if this is for your eyes only, you can narrow the elements down to what really matters most to you.

The standard elements of a basic business plan include:

1—Title page: This is the “cover” for the plan and simply has your business name, contact information (address, website, phone numbers, etc.) and says “Business Plan”. You might find it helpful to put a date on this page, too. The best business plans are living documents which you can change as circumstances change, and all business plans should be evaluated on a regular basis—monthly, quarterly or semi-annually.

2—Table of Contents: A listing of the various elements of the plan and the page number they can be found on.

3—Executive Summary: While this comes early in the physical plan, you really want to write it after you have completed some of the other parts of the plan. The executive summary is a short document that provides a snapshot of the rest of the plan. It states clearly what the business does, who its customers are, what the current market conditions are, and how your business plans to succeed.

4—Business Description: This section includes more specific information on your business. Usually, your mission and vision statement go here, as well as your business goals (both long and short-term). Biographical information on key players is also included in this section. If your business has been open for awhile, you should include a brief company history.

5—Market Analysis: This section discusses the state of the industry, economic conditions, business conditions, customer profiles and competitive factors.

6—Sales and Marketing Plan: A strategic plan for getting customers and achieving revenue goals for the coming year. This often includes advertising, direct sales, promotions, marketing campaigns, and other actions you intend to take to promote your products and services.

7—Organization and Management: Explains how the business is legally organized, organization charts (if applicable), your operations plan, any certifications, permits or awards you have and a brief bio of all the managers in the company.

8—Financials: This section includes accounting information. Balance statements, income statements, cash flow statements and budgets are usually included. For a new business, you should create one-year projections for these various statements.

9—Appendix: This section is for other things you want to include but might not fit in the above sections. You can add resumes of your key players, your brochures and/or advertising materials, pictures and any supporting information that might be helpful.

While many businesses still use a formal plan with all these elements and more, other businesses use different formats. If you are not seeking investments or loans, the formatting is not as important as going through the planning process. The process can help you clarify your objectives and help you strategically plan your success.

You can find lots of information and even templates to help you write your business plan, much of which is free online. The Small Business Administration and SCORE are two very good resources for small businesses.

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