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Write Your Business Plan

A business plan is an essential roadmap for business success. This living document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues.
Executive Summary
The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful.

If you are seeking financing, the executive summary is also your first opportunity to grab a potential investors interest.
The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document.
What to Include in Your Executive Summary
Below are several key points that your executive summary should include based on the stage of your business.
If You Are an Established Business
If you are an established business, be sure to include the following information:
The Mission Statement
This explains what your business is all about. It should be between several sentences and a paragraph.
Company Information
Include a short statement that covers when your business was formed, the names of the founders and their roles, your number of employees, and your business location(s).
Growth Highlights
Include examples of company growth, such as financial or market highlights (for example, XYZ Firm increased profit margins and market share year-over-year since its foundation). Graphs and charts can be helpful in this section.
Your Products/Services
Briefly describe the products or services you provide.
Financial Information
If you are seeking financing, include any information about your current bank and investors. Summarize future plans Explain where you would like to take your business. With the exception of the mission statement, all of the information in the executive summary should be covered in a concise fashion and kept to one page. The executive summary is the first part of your business plan many people will see, so each word should count.
If You Are a Startup or New Business
If you are just starting a business, you won't have as much information as an established company. Instead, focus on your experience and background as well as the decisions that led you to start this particular enterprise.
Demonstrate that you have done thorough market analysis. Include information about a need or gap in your target market, and how your particular solutions can fill it. Convince the reader that you can succeed in your target market, then address your future plans.
Remember, your Executive Summary will be the last thing you write. So the first section of the business plan that you will tackle is the Company Description section.
Company Description
This section of your business plan provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business and its unique proposition.
What to Include in Your Company Description
Describe the nature of your business and list the marketplace needs that you are trying to satisfy. Explain how your products and services meet these needs. List the specific consumers, organizations or businesses that your company serves or will serve. Explain the competitive advantages that you believe will make your business a success such as your location, expert personnel, efficient operations, or ability to bring value to your customers.
Market Analysis
The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions. This section is usually presented after the company description.
What to Include in Your Market Analysis
Industry Description and Outlook Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.
Information About Your Target Market Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:
Distinguishing characteristics
What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?
Size of the primary target market In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group? For more information, see our market research guide for tips and free government resources that can help you build a market profile.
How much market share can you gain? What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.
Pricing and gross margin targets Define your pricing structure, gross margin levels, and any discount that you plan to use.
When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.
Competitive Analysis Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:

Market share
Strengths and weaknesses
How important is your target market to your competitors?
Are there any barriers that may hinder you as you enter the market?
What is your window of opportunity to enter the market?
Are there any indirect or secondary competitors who may impact your success?
What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?

Regulatory Restrictions
Include any customer or governmental regulatory requirements affecting your business, and how you'll comply. Also, cite any operational or cost impact the compliance process will have on your business.
Organization & Management
Organization and Management follows the Market Analysis. This section should include: your company's organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.
Who does what in your business? What is their background and why are you bringing them into the business as board members or employees? What are they responsible for? These may seem like unnecessary questions to answer in a one or two person organization, but the people reading your business plan want to know who's in charge, so tell them. Give a detailed description of each division or department and its function.
This section should include who's on the board (if you have an advisory board) and how you intend to keep them there. What kind of salary and benefits package do you have for your people? What incentives are you offering? How about promotions? Reassure your reader that the people you have on staff are more than just names on a letterhead.
Organizational Structure
A simple but effective way to lay out the structure of your company is to create an organizational chart with a narrative description. This will prove that you're leaving nothing to chance, you've thought out exactly who is doing what, and there is someone in charge of every function of your company. Nothing will fall through the cracks, and nothing will be done three or four times over. To a potential investor or employee, that is very important.
Ownership Information
This section should also include the legal structure of your business along with the subsequent ownership information it relates to. Have you incorporated your business? If so, is it a C or S corporation? Or perhaps you have formed a partnership with someone. If so, is it a general or limited partnership? Or maybe you are a sole proprietor.
The following important ownership information should be incorporated into your business plan:

Names of owners
Percentage ownership
Extent of involvement with the company
Forms of ownership (i.e., common stock, preferred stock, general partner, limited partner)
Outstanding equity equivalents (i.e., options, warrants, convertible debt)
Common stock (i.e., authorized or issued)
Management Profiles

Experts agree that one of the strongest factors for success in any growth company is the ability and track record of its owner/management team, so let your reader know about the key people in your company and their backgrounds. Provide resumes that include the following information:

Name
Position (include brief position description along with primary duties)
Primary responsibilities and authority
Education
Unique experience and skills
Prior employment
Special skills
Past track record
Industry recognition
Community involvement
Number of years with company

Be sure you quantify achievements (e.g. "Managed a sales force of ten people," "Managed a department of fifteen people," "Increased revenue by 15 percent in the first six months," "Expanded the retail outlets at the rate of two each year," "Improved the customer service as rated by our customers from a 60 percent to a 90 percent rating") Also highlight how the people surrounding you complement your own skills. If you're just starting out, show how each person's unique experience will contribute to the success of your venture.
Board of Directors' Qualifications
The major benefit of an unpaid advisory board is that it can provide expertise that your company cannot otherwise afford. A list of well-known, successful business owners/managers can go a long way toward enhancing your company's credibility and perception of management expertise.
If you have a board of directors, be sure to gather the following information when developing the outline for your business plan:

Names
Positions on the board
Extent of involvement with company
Background
Historical and future contribution to the company's success

Service or Product Line Once you've completed the Organizational and Management section of your plan, the next part of your business plan is where you describe your service or product, emphasizing the benefits to potential and current customers. Focus on why your particular product will fill a need for your target customers.
What to Include in Your Service or Product Line Section
A Description of Your Product / Service
Include information about the specific benefits of your product or service from your customers' perspective. You should also talk about your product or service's ability to meet consumer needs, any advantages your product has over that of the competition, and the current development stage your product is in (e.g., idea, prototype).
Details About Your Product's Life Cycle
Be sure to include information about where your product or service is in its life cycle, as well as any factors that may influence its cycle in the future.
Intellectual Property If you have any existing, pending, or any anticipated copyright or patent filings, list them here. Also disclose whether any key aspects of a product may be classified as trade secrets. Last, include any information pertaining to existing legal agreements, such as nondisclosure or non-compete agreements.
Research and Development (R&D) Activities Outline any R&D activities that you are involved in or are planning. What results of future R&D activities do you expect? Be sure to analyze the R&D efforts of not only your own business, but also of others in your industry.
Marketing & Sales Once you've completed the Service or Product Line section of your plan, the next part of your business plan should focus on your marketing and sales management strategy for your business.
Marketing is the process of creating customers, and customers are the lifeblood of your business. In this section, the first thing you want to do is define your marketing strategy. There is no single way to approach a marketing strategy; your strategy should be part of an ongoing business-evaluation process and unique to your company. However, there are common steps you can follow which will help you think through the direction and tactics you would like to use to drive sales and sustain customer loyalty.
An overall marketing strategy should include four different strategies:

A market penetration strategy.
A growth strategy. This strategy for building your business might include: an internal strategy such as how to increase your human resources,
an acquisition strategy such as buying another business, a franchise strategy for branching out, a horizontal strategy where you would provide the same type of products to different users, or a vertical strategy where you would continue providing the same products but would offer them at different levels of the distribution chain.
Channels of distribution strategy. Choices for distribution channels could include original equipment manufacturers (OEMs), an internal sales force, distributors, or retailers.
Communication strategy. How are you going to reach your customers? Usually a combination of the following tactics works the best: promotions, advertising, public relations, personal selling, and printed materials such as brochures, catalogs, flyers, etc.

After you have developed a comprehensive marketing strategy, you can then define your sales strategy. This covers how you plan to actually sell your product. Your overall sales strategy should include two primary elements:

A sales force strategy. If you are going to have a sales force, do you plan to use internal or independent representatives? How many salespeople will you recruit for your sales force? What type of recruitment strategies will you use? How will you train your sales force? What about compensation for your sales force?
Your sales activities. When you are defining your sales strategy, it is important that you break it down into activities. For instance, you need to identify your prospects. Once you have made a list of your prospects, you need to prioritize the contacts, selecting the leads with the highest potential to buy first. Next, identify the number of sales calls you will make over a certain period of time. From there, you need to determine the average number of sales calls you will need to make per sale, the average dollar size per sale, and the average dollar size per vendor.