Business plan should include

Market Analysis Business Overview. Include an overview of the market as a whole, with specific data and charts or graphs, if appropriate. Define your target market and your plans for catering to this specific audience. Products and Services Business Overview. Describe the products manufactured or sold or the services offered.

Classify the different types of products or services and provide a brief description of each. Sales and Marketing Business Plan. Outline pricing and sales information business overview. Include rationalizations for why your audience will buy your products or services and how you will reach them through marketing and advertising efforts. Competitive Analysis Business Overview. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.

These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Business Essentials Guide to Mergers and Acquisitions. Business Business Essentials. Table of Contents Expand. What Is a Business Plan? Understanding Business Plans. Special Considerations. Key Takeaways A business plan is a written document describing a company's core business activities, objectives, and how it plans to achieve its goals.

Startup companies use business plans to get off the ground and attract outside investors. Businesses may come up with a lengthier traditional business plan or a shorter lean startup business plan.

Good business plans should include an executive summary, products and services, marketing strategy and analysis, financial planning, and a budget. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

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Related Terms Marketing Plan A marketing plan is an operational document that demonstrates how an organization is planning to use advertising and outreach to target a specific market. Considering a New Venture? Consider a Feasibility Study A feasibility study analyzes all relevant factors of a project to determine the possibility and probability of completing it successfully.

Scope Scope is a project management term for the objectives necessary to complete a project, allowing managers to estimate costs and time required. What Is a Startup? A startup is a company in the first stage of its operations, often being financed by its entrepreneurial founders during the initial starting period.

What Is a Business? In fact, investors see the fact that you know you are missing certain key people as a sign of maturity and knowledge about what your business needs to succeed. If you do have gaps in your team, simply identify them and indicate that you are looking for the right people to fill certain roles. Finally, you may choose to include a proposed organizational chart in your business plan. Beyond raising money, an org chart is also a useful planning tool to help you think about your company and how it will grow over time.

What key roles will you be looking to fill in the future and how will you structure your teams to get the most out of them? An org chart can help you think through these questions. The company overview will most likely be the shortest section of your business plan.

For a plan that you intend to just share internally with your business partners and team members, skip this section and move on. An hour or two should be plenty of time.

Avoid putting together a long, generic statement about how your company is serving its customers, employees, and so on.

Your company mission should be short—one or two sentences at most—and it should encompass, at a very high level, what you are trying to do. Frankly, your mission statement and your overall value proposition might even be the same thing. But, if you have intellectual property that is proprietary to your business and helps your business defend itself against competitors, you should detail that information here. If you have patents or are in the patent application process, this is the place to highlight those patents.

Equally important to discuss is technology licensing—if you are licensing core technology from someone else, you need to disclose that in your business plan and be sure to include details of the financial relationship.

The most common business structures include:. Be sure to provide a review of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Again, keep this section short—no more than a few paragraphs at most. This section is especially useful to give context to the rest of your plan, and can also be very useful for internal plans. The company history section can provide new employees with a background on the company so that they have a better context for the work that they are doing and where the company has come from over the years.

Finally, the company overview section of your business plan should describe your current location and any facilities that the company owns. For businesses that serve consumers from a storefront, this information is critical. Also, for businesses that require large facilities for manufacturing, warehousing, and so on, this information is an important part of your plan. This section is just as important for you and your team as it is for investors. Last, but certainly not least, is your financial plan chapter.

Business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. That said, if you need additional help, there are plenty of tools and resources out there to help you build a solid financial plan. A typical financial plan will have monthly sales and revenue forecasts for the first 12 months, and then annual projections for the remaining three to five years.

Three-year projections are typically adequate, but some investors will request a five-year forecast. Following are details of the financial statements that you should include in your business plan, and a brief overview of what should be in each section. Your sales forecast is just that—your projections of how much you are going to sell over the next few years. A sales forecast is typically broken down into several rows, with a row for each core product or service that you are offering.

Just focus on high-level buckets at this point. For example, if you are forecasting sales for a restaurant , you might break down your forecast into these groups: lunch, dinner, and drinks. If you are a product company, you could break down your forecast by target market segments or into major product categories. Your sales forecast will also include a corresponding row for each sales row to cover the Cost of Goods Sold , also known as COGS also called direct costs.

These rows show the expenses related to making your product or delivering your service. COGS should only include those costs directly related to making your products, not regular business expenses such as rent, insurance, salaries, etc.

For restaurants, it would be the cost of ingredients. For a product company, it would the cost of raw materials. For a consulting business, it might be the cost of paper and other presentation materials.

Your personnel plan details how much you plan on paying your employees. For a small company, you might list every position on the personnel plan and how much will be paid each month for each position.

This includes payroll taxes, insurance, and other necessary costs that you will incur every month for having an employee on your payroll. You can download a free example of an income statement here. The cash flow statement often gets confused with the profit and loss statement, but they are very different and serve very different purposes.

Get an example of a cash flow statement here. The key to understanding the difference between the two statements is understanding the difference between cash and profits. The simplest way to think about it is when you make a sale. To learn how to use your cash flow to build a sustainable business, check out this article. The last financial statement that most businesses will need to create as part of their business plan is the balance sheet. The balance sheet provides an overview of the financial health of your business.

For additional details on what to include in your balance sheet, check out this article on building and reading balance sheets. You can also download this balance sheet example to help you get started. The last thing that you might need to include in your financial plan chapter is a section on your exit strategy.

An exit strategy is your plan for eventually selling your business, either to another company or to the public in an IPO. If you have investors, they will want to know your thoughts on this. After all, your investors will want to get a return on their investment, and the only way they will get this is if the company is sold to someone else.

Your financial plan is meant to help you understand what your expenses are, what it will take to be profitable, how much cash you need to keep. However, having forecasts and projections for your core financial statements will not only help clarify the feasibility of your strategy but prove to investors that you have thought ahead. Business planning is a continuous process that can help you validate your idea, set goals, manage, and successfully pitch your business. To start writing your own plan, download our free business plan template to access an outline of the content we covered in this article.

If you need to reference specific industry examples, I encourage you to take a look at our sample business plan library. And for a modern business planning solution that grows with your business, you might want to check out LivePlan. LivePlan covers all of the business planning steps we covered today, with expert guidance and resources to build your plan. It also includes robust forecasting tools that can directly integrate with your forecasting solution to provide easy to analyze financial information and insights about your business.

This will give you a professional business plan written by an MBA in five business days, that you can access and update through LivePlan. You can follow Noah on Twitter. What Is a Business Plan? Read Planning By: Noah Parsons. Why write a business plan?

Grow your business faster Writing a business plan is about establishing a foundation for your business. Pitch and get funding Investors and loan providers need to know that you have a solid understanding of the trajectory of your business. Keep it short Business plans should be short and concise. The reasoning for that is twofold: First, you want your business plan to be read. Know your audience Write your plan using language that your audience will understand.

Test your business idea Working through your business plan, and starting with a one-page pitch , can help you test the viability of your business idea long before launching. Establish goals and objectives You should know what you want to get out of your business upfront. Unlock Your Free ebook.

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