You should also include details regarding the industry your company will serve, and any trends and major competitors within the industry. You should also include you and your team's experience in the industry and what sets your company apart from the competition in your business description. The purpose of the market analysis and strategy component of a business plan is to research and identify a company's primary target audience and where to find this audience.
Factors to cover in this section include:. The goal of this section is to clearly define your target audience so that you can make strategic estimations as to how your product or service will perform with this audience. This part of your business plan should cover the specifics of how you plan to market and sell your products and services. This section should include:. Your business plan should also include a detailed competitive analysis that clearly outlines a comparison of your organization to your competitors.
Outline your competitors' weaknesses and strengths and how you anticipate your company to compare to these. This section should also include any advantages your competition has in the marketplace and how you plan to set your company apart. You should also cover what makes your business different than other companies in the industry, as well as any potential issues you may face when entering the marketplace if applicable. This section of your business plan should cover the details of your business's management and organization strategy.
Introduce your company leaders and their qualifications and responsibilities within your business. You can also include human resources requirements and the legal structure of your company.
Use this section to further expand on the details of the products and services your company offers that you covered in the executive summary. Include all relevant information about your products and services such as how you will manufacture them, how long they will last, what needs they will meet and how much it will cost to create them.
Financial forecasts - this section provides details of cash flow forecasts, profit and loss accounts and balance sheets - see financial forecasts for your business plan.
Watch the short video below for an overview of what to include in your business plan. Printer-friendly version. Start a business Helpline. Also on this site. What risks are you taking with your business?
If you are relying on online advertising as a major promotional channel, you are making assumptions about the costs of that advertising and the percentage of ad viewers that will actually make a purchase. Knowing what your assumptions are as you start a business can make the difference between business success and business failure. When you recognize your assumptions, you can set out to prove that your assumptions are correct. The more that you can minimize your assumptions, the more likely it is that your business will succeed.
This section covers the functionality of your business. The company overview and team chapter of your business plan is where you make your best case that you have the right team in place to execute your idea. It should show that you have thought about the important roles and responsibilities your business needs in order to grow and be successful. Include brief bios that highlight the relevant experiences of each key team member.
Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? As a company grows, you may require different types of experience and knowledge. 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. Competitive Analysis Business Overview. Analyze the strengths and weaknesses of your direct and indirect competitors.
Demonstrate how you will gain a competitive edge against your competition. Management Team Business Plan. Provide pertinent, concise background information on all key players involved in the business overview. Business Plan Financials. Include all financial information, from startup costs to balance sheets.
The financial section should outline:.
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