Create a roadmap for your business
Developing a business plan is a crucial step in laying the foundation for your company. Fortunately, there are many resources available that can help you efficiently and effectively create a business plan that fits your unique vision and goals.
Leverage the power of a well-crafted business plan
A solid business plan can be a powerful tool that will help you navigate every aspect of launching and operating your company. Whether you’re seeking funding, attracting new partners, or simply setting clear objectives for your team, a well-crafted business plan is an essential tool for success.
Crafting a business plan can also help you refine your thinking about key aspects of your business, such as your target market, pricing strategy, and competition.
Choose the right format for your business plan
There’s no one-size-fits-all approach to creating a business plan. Consider your unique needs and objectives as you choose between more traditional, comprehensive business plans or more streamlined, agile approaches.
Traditional business plans typically provide more detail and require more work to create, but they can be essential for securing funding or building partnerships.
Agile business plans are a great option for startups or businesses seeking to pivot quickly in response to changing market conditions. They’re designed to be concise and focus on the most important elements of your business.
Create a comprehensive business plan
If you’re seeking funding or building partnerships, a comprehensive business plan is essential. These plans provide a detailed roadmap for your business, covering everything from your target market and marketing strategy to financial projections and operations.
While they require more work to create, comprehensive business plans can be an essential tool for securing investment and building partnerships.
Opt for an agile approach
For startups or businesses seeking to pivot quickly in response to changing market conditions, an agile business plan may be a better fit. These plans focus on the most important elements of your business and can be created quickly, often in just an hour.
While they may not be appropriate for all situations, agile business plans can be a great option for businesses that need to move quickly and adapt to changing circumstances.
Conventional Business Plan Layout
If you want to dive deep into the details, have a comprehensive strategy, or plan to apply for financing from conventional sources, then the conventional business plan format is for you.
You don’t have to adhere to the exact format of the plan when crafting your business plan. Instead, focus on the sections that are most relevant to your business and its needs. The conventional business plan format combines these nine sections.
Overview
Provide a summary of your business and explain why it will be successful. Share the goals, your product or service, and basic information about the management team, employees, and the company’s location. If you plan to seek financing, include financial information and high-level growth plans.
Company Profile
Give a detailed overview of your company. Discuss the issues you tackle in detail. Be specific about which customers, organizations, or companies you aim to serve.
Explain the competitive advantages that will enable your company to succeed. Do you have experts on your team? Have you identified the ideal location for your store? This is where you can showcase your strengths.
Market Study
You’ll need a strong understanding of your industry landscape and target market. Competitive research will reveal what other companies are doing and their strengths. When conducting market research, look for trends and themes. What are the successful competitors doing? Why does it work for them? Can you do it better? It’s time to answer these questions.
Organization and Management
Describe how your company will be organized and who will run it.
Outline the legal structure of your company. Indicate whether you plan to form a C or S corporation, general or limited partnership, sole proprietorship, or limited liability partnership.
Present an organizational chart with the names of those in charge, and explain how each person’s specific experience will contribute to the success of your project. Consider including resumes and CVs of key team members.
Product or Service Line
Describe what you’re selling or the service you’re providing. Explain how it benefits your customers and what the product life cycle looks like. Share your plans for intellectual property such as copyrights or patent registrations. If you’re conducting research and development of your service or product, describe it in detail.
Advertising and Sales
There is no one-size-fits-all approach to a marketing strategy. Your strategy must adapt and evolve to meet your specific needs.
Explain the procedure for attracting and retaining customers and for generating a sale. Since you’ll use this section when making financial projections, make sure to explain your entire advertising and sales strategies in full detail.
Funding Proposal
This section is crucial if you are seeking financing for your business. Clearly outline the amount of funding required for the next five years and provide a detailed breakdown of how it will be utilized.
Indicate your preferred financing option, whether debt or equity, and specify the terms and duration of the loan. Describe how the funding will be allocated, whether it will be used to purchase equipment or inventory, pay employee salaries, or cover operational expenses until profitability is achieved. Also, include a summary of your future financial plans, such as debt repayment or a potential exit strategy.
Financial Projections
To demonstrate the financial stability and potential success of your business, supplement your funding proposal with financial projections.
If your business is already established, include the income statements, balance sheets, and cash flows for the past three to five years. If you have additional collateral to secure the loan, be sure to mention it.
Provide a financial forecast for the next five years, including income statements, balance sheets, cash flows, and capital expenditure budgets. For the first year, provide quarterly or even monthly projections. Clearly explain the reasoning behind your projections and how they align with your funding requirements.
Visual aids such as graphs and diagrams illustrating your company’s financial history can be included.
Supporting Documents
Use this section to include any additional materials or documentation that have been requested. Common items include credit histories, resumes, product images, letters of recommendation, licenses, permits or patents, legal documents, permits, and other contracts.
Sample Business Plans
Gain inspiration and insight into creating your own business plan by reviewing the following examples from fictitious business owners. Rebecca runs a consulting firm, while Andres operates a toy company.
Simplified Business Plan
This format is ideal if you want to quickly and easily explain your business, if your business model is straightforward, or if you anticipate making frequent revisions to your plan.
Simplified plans use visual diagrams with only a few key elements to describe your company’s value proposition, infrastructure, customers, and finances. This allows you to present your business’s critical information in a clear and concise way.
There are a variety of templates available online for creating a simplified business plan. Here are the nine essential components to include in your plan:
Strategic Partnerships
List the other businesses and services that you will be working with to run your company. This can include suppliers, manufacturers, subcontractors, and other strategic partners.
Essential Activities
Consider the other companies or services that you will be working with to keep your business running smoothly. This can include suppliers, manufacturers, subcontractors, and other strategic partners.
Key Resources
Outline the resources you will leverage to create value for your customers. This can include your staff, financial resources, or intellectual property. Don’t overlook the available resources specifically for women-owned, veteran-owned, American Indian, and HUBZone businesses.
Value Proposition
Clearly articulate the unique value that your business offers to the market.
Customer Relationships
Describe how your customers will interact with your business, whether it’s through automated or personal channels, in-person or online. Consider the entire customer experience, from start to finish.
Target Market
Identify and name the specific group of customers that your business will serve. Be specific in defining your target market, as your business is not for everyone.
Communication Channels
List the most important methods that you will use to communicate with your customers. Most businesses use a variety of channels and adapt over time.
Cost Structure
Determine whether your company will prioritize cost reduction or value maximization, and then identify the most significant costs associated with that strategy.
Revenue Streams
Explain how your business will generate revenue. This can include direct sales, membership fees, or advertising sales. If your business has multiple revenue streams, make sure to list them all.
Simplified Business Plan Example
Read this example from Andrew, a fictitious toy company owner, to get a better understanding of how to create your own simplified business plan.
