This article is about Business Planning and includes a Free Business Plan Template

Every business should have a business plan. But what is a business plan? 

A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. It lays out a written plan from a marketing, financial and operational viewpoint.

• In its simplest form, a business plan is a guide, a “road-map” for your business that outlines goals and details how you plan to achieve those goals. 

Nevertheless, Writing a business plan is hard work, many people spend a lot time writing their plan. During the draft stage, business plan software can be very helpful. But the hard part is developing a coherent picture of the business that makes sense, is appealing to others and provides a reasonable future life to your business.

Solid business plans don't guarantee success, whoever for entrepreneurs with decent ideas, they surely boost the odds.

Steps to Take Before You Write a Business Plan:

Think it through. 

Think about building your management team, hiring salespeople, setting up operations, getting your first customer, protecting yourself from lawsuits, outmaneuvering your competition, and so on. Think about cash flow and what measures you can take to minimize your expenses and maximize your revenue.

You might have a great idea, but have you carefully mapped out all the steps you'll need to take to make the business a reality?

Do your research. 

Investigate everything you can about your proposed business before you start writing your business plan and long before you start the business.
But be aware that you will need to continue with your research while you write the business plan, since inevitably, things will change as you uncover critical information. And while you're researching, be sure to consult multiple sources.
Research your potential customers and competitors.

Is your product or service something people really want or need, or is it just "cool"? Study your market. Is it growing or shrinking? Could some sort of disruptive technology or regulatory change alter the market in fundamental ways? Why do you think people will buy your product or service? If you don't have any customers or clients yet, you'll need to convince investors that you have something people really want or need, and more important, that they'll buy it at the price you expect.

Get feedback. 

This may be annoying, but it's just part of the process, however You'll know when you're done when you've heard the same questions and criticisms again and again and have a good answer to almost everything anyone can throw at you.  Obtain as much feedback as you can from trusted friends, colleagues, nonprofit organizations, and potential investors or lenders. You'll find, almost for sure, that almost everyone thinks they're an expert and they all could do a better job than you.

Now that you understand why you need a business plan you need to create one 

One important step in preparing for the challenges your startup may face is writing a solid business plan. The technicalities and standard information that go into a business plan are easy enough to figure out, but there are other, more abstract things to consider before you put pen to paper.

Determine your purpose - Having a plan to make a profit is important, but it's far from the only thing that matters when you start a business

Build your vision - The key to business success is having a clear vision of what you want to accomplish as a company, experts say. But before you write a business plan, you should come up with three to five key strategies that will enable you to achieve that vision.

"Sometimes, less is more," Singer said. "It's far better to do three things very well versus 10 things not so well."

Below I will talk about some essential sections of a business plan that I consider that you should include in it.

Key elements that should be included are:

• Business concept. - Describes the business, its product and the market it will serve. It should point out just exactly what will be sold, to whom and why the business will hold a competitive advantage.

• Financial features. - Highlights the important financial points of the business including sales, profits, cash flows and return on investment.

• Financial requirements. - Clearly states the capital needed to start the business and to expand. It should detail how the capital will be used, and the equity, if any, that will be provided for funding. If the loan for initial capital will be based on security instead of equity, you should also specify the source of collateral.

• Current business position. - Furnishes relevant information about the company, its legal form of operation, when it was formed, the principal owners and key personnel.

• Major achievements. - Details any developments within the company that are essential to the success of the business. Major achievements include items like patents, prototypes, location of a facility, any crucial contracts that need to be in place for product development, or results from any test marketing that has been conducted.

-----------------------------------------------------------------------

A good plan accomplishes three important tasks. First, it aligns the management team toward a common set of goals. Then it forces the team to take a long, hard look at the feasibility of the business. Finally, a business plan is a sales document: It aims to attract professional investors who may not have the required time to read your plan, so try to be concise and direct.

-----------------------------------------------------------------------

Free Business Plan Template

1. Executive Summary

[BUSINESS NAME]

[ADDRESS]

[PHONE]

The Executive Summary is where you explain the general idea behind your company; it’s where you give the reader (most likely an investor, or someone else you need on board) a clear indication of why you’ve sent this Business Plan to them. This is a souped-up “elevator pitch,” a couple of pages that summarizes what your business is all about.

Note that, while the entire Business Plan should be well-written, this section must really demonstrate excellent composition and grammar. This is the first part of your Business Plan that anyone will read, so it’s important that it really “sing.”

The header section of the Executive Summary can benefit from flexible treatment, as well. You can use a company logo, or any other design you’d like, but you want to be sure you include the name of your business, right at the start of the Business Plan.

In the Business Plan section, you will want to get the reader’s attention by letting them know what you do. Try to answer some (or all) of the following questions:

• What products or services do you offer?
• What sector do you operate within?
• Who is your target audience?
• What is the future outlook of the marketplace?
• What makes your offer unique?
• Who’s the boss?
• Why did your company start?
• The Executive Summary is the place to succinctly describe your business. It’s also appropriate to address why you’ve created your proposal, answering questions like these, briefly, in addition to those above:
• Do you need investment?
• How much money do you need?
• What is the money to be used for?
• How will your business become profitable?
• What’s in it for the recipient?

The last question is perhaps the most important. Already, only having read as far into your business plan as the Executive Summary, your reader is wondering “what’s in it for me?” And your challenge is to offer them a preview (remember this is a “summary”) of the benefits of accepting your business plan, while not giving away the whole story.

2. Business Description

This next section gives all the must-have details about your business. Here you are looking to answer questions like “when did you start?”; “Why?”; “By whom?” This is the place for your “origin story.”

This section should be just as well-written as the Executive Summary, of course. What is your interest in the market? How’d you get to this point?

As you can tell, the Business Description section amounts to backstory – and that’s essential to any Business Plan.

This is where you tell them where you’re coming from, before you get to “why” you’re in need of an investment, in a nutshell.

3. Mission Statement

The Mission Statement section of your Business Plan expands on some of what you talked about in the Executive Summary.

Here are the major points you will want to make in the Mission Statement.

• A) Goals - Explain the end-result you seek from the business venture. Connect it to your customers and readers, in turn.

• B) Objectives - Explain the steps you will take to reach your goal. Be specific; demonstrate that you have a good idea of what it will realistically take to achieve your goals.

• C) Customers - Your target audience has to be well-defined. Here you need to explain exactly who your customer is. You should define your customer as specifically as possible. Is your customer the 18-24 year old customer base? How about the 18 -24 year old music consumers, as an example? Describe them to the finest level of detail possible.

• D) Industry - Why is your niche attractive? Is your industry growing? Will you shake it up with your offer? Are you a disruptor? Explain thoroughly in this section.

• E) Strengths - Here you want to outline what makes your company special. Answer why your business is different from the rest of the competition. Who’s on your team? The best tip we’ve got is: investors love a top-notch team.

• F) Status of Ownership - Here you want to tell your prospective investors the legal status of your company. Is it a limited liability company (LLC)? Is it a sole proprietorship, or partnership? Whatever the case may be, you’ll want to explain it to your prospect.

4. Products and Services

This section is extremely important to a successful Business Plan. This is where you describe what it is that you have to offer the world.

Be sure to include:

Detailed descriptions of your Products and/or Services. Feel free to include pictures, as you deem appropriate. Don’t forget to add the pricing and/or fees.

Next, you’ll want to spend some time extolling the features and benefits of your products and/or services. Break it down. Remember that customers love benefits, and prospective investors want to know that you understand those benefits.

The Products/Services you offer are the core of your business. You really can’t afford to omit anything relevant here. Your prospective investor will surely want to know what you have to offer, and they’ll want to know enough about those things to be able to believe in them.

5. Marketing Plan

The Marketing Plan is one of the most essential parts of your Business Plan; marketing is the thing that brings your business to its audience.

The first thing to do in the Marketing Plan section is to prove that you know your target audience. Put the research, market analyses, and industry knowledge that you possess to work in this section. You are illustrating to your recipient that you know your audience better than anyone, and that makes yours the ideal business to serve the audience.

This section can be broken into six distinct parts, as follows:

• Clearly define and explain your target audience
• Briefly describe your competition – particularly what makes you better at what you do than them
• Detail your niche. What particular area of your industry to you fit? Where do you squeeze in, in light of the innovation?
• List your distribution channels.
• Describe how you will promote the business. What media outlets will you use for advertisement? How much is your marketing budget? Your prospective investor will surely want to know.
• State your image or message. How will you present your business to the public? 

Tell your reader how your customers will see your business. The Marketing Plan is essential. Make sure you give it plenty of attention, in your Business Plan.

6. Operations Plan

This section of your Business Plan should detail your day-to-day operation.

This is important; your prospective investors want to know that you’ve given some thought to the daily operation of your business. Here, you’ll want to describe the various resources, personnel, and real estate involved in the execution of your business activities.

Some of the things you will want to include in the Operations Plan section:

[LOCATION]
[LOGISTICS]
[LEGALITIES]
[PERSONNEL]
[INVENTORY]
[SUPPLY CHAIN]
[ACCOUNTS PAYABLE/RECEIVABLE]

The Operations Plan section should leave your readers with the feeling that you’ve thought of everything.

7. Management Organization

In this section, detail the management structure inside your organization. Your prospective investors will be keen to know who’s calling the shots and to whom at your business.

Here are the things you will want to make sure you list here:

[BOARD OF DIRECTORS]
[ADVISORS]
[ACCOUNTANTS]
[LAWYERS]
[CONSULTANTS]
[OTHER STAFF]

Remember, you don’t have to list everyone, down to the janitors, but you do want to be thorough in this section. Let your prospect know that you’re not just winging it, and that you have a team in place.

8. Financial Plan

The Financial Plan is one of the most important, if not the absolute most important, parts of your Business Plan. This is a section that your reader will be eyeing closely, and they will expect you to have put a lot of love into this one, too.

Begin this section by telling the prospective investor about the funding you’ve received so far. Where has it come from? How much does it total? Be forthcoming about your capital and its sources, first and foremost.

This section is also the place where you plan your Profit and Loss (P&L) for at least the next 12 months.

9. Conclusion/Call to Action

The last part of your Business Plan is a conclusion, which ideally should contain a call to action (CTA). Your CTA here is a bit different from a CTA on something like a Web-based landing page. A Business Plan CTA simply clarifies the next step. Is it a phone call or a meeting? Perhaps it’s a phone call to schedule a meeting. Whatever your CTA may be, you’ll want to make it clear, in this section.

10. Confidentiality Statement

Your Business Plan is top secret, right? If that’s the case, it’s up to you to make sure that’s clearly stated to those who receive the Business Plan. One way to protect your business and its intellectual property (IP), is to include a confidentiality, or nondisclosure (NDA) statement in your Business Plan.

11. Addendum

The last thing that should be added to your Business Plan is any additional information that is worth including, but perhaps not essential to the plan itself.

In this section, consider adding info-graphics, photos, or complex data-sets that might clutter the other sections in your Business Plan. Of course, you’ll want to note these addendum throughout the body of the Business Plan document, accordingly.

Addendum is an item of additional material, typically omissions, added at the end of a book or other publication.