Write To Your Business Plan - Complete Guide

Write your business plan and then form your dream business with the fastest formation online.

Learn How to Write a Business Plan

• Pick a Business Plan Format that Works for You

• Traditional Business Plan Format

• Lean Startup Business Plan

• Business Plan Example

A meticulously crafted business plan acts as a valuable roadmap for your enterprise. As you articulate your ideas, you delve into the essential aspects of managing a company and positioning yourself for success. Utilizing a business plan template allows you to organize, operate, and expand your business effectively.

Furthermore, your business plan is crucial in enhancing your prospects for securing funding from banks or potential business partners. When applying for loans, bankers seek evidence of a practical strategy for generating revenue and repaying debts. Similarly, investors require assurance that you possess the acumen to make sound decisions before investing in your venture. A robust business plan instills greater confidence in investors, showcasing the credibility and potential of your business.

Pick a business plan format that works for you.

There is no universal business plan format that suits every business. Prioritizing a business plan that aligns with your specific needs is more important than fixating on formatting.

The two primary business plan templates are traditional and lean startup formats. Traditional plans are widely employed and adhere to a recommended structure, incorporating extensive details in each section. Due to their comprehensive nature, traditional plans require considerable effort and can extend to dozens of pages.

On the other hand, lean startup business plans, while less prevalent, follow a standard structure but with reduced detail. Focusing solely on critical elements of your business, a lean startup plan can be as concise as a single page. Moreover, lean startup plans can be completed in significantly less time than traditional plans, sometimes requiring as little as one hour.

Traditional Business Plan

• Comprehensive

• Full of details

• Takes longer to write

• Preferred by lenders and investors

Lean Startup Business Plan

• High-level focus

• Fast to write

• Contains vital elements only

• Lenders and investors may request more information after reviewing this type of plan.

Traditional Business Plan Format

When crafting your business plan, a traditional format is an excellent choice if you value attention to detail, seek a comprehensive plan, or plan to pursue funding from conventional sources. However, even when utilizing a traditional business plan template, there is flexibility to customize it to suit your business and specific needs. Typically, conventional business plans consist of a combination of the following nine sections:

1. Executive Summary

The executive summary provides an overview of your business plan, highlighting its key aspects and conveying why your company will succeed. It should include:

2. Company's mission statement

• Description of your product or service

• Overview of your company's leadership team, staff, and location

• If seeking funding, a summary of financials and a high-level growth plan.

3. Company Description

This section offers a detailed overview of your company. Explain the problem your business solves and be specific about the customers you serve. Identify the target audience, whether consumers, businesses, or nonprofit organizations, who need your products or services. Additionally, highlight your company's competitive advantages that differentiate you from competitors, such as ideal location, industry expertise, or unique product features.

4. Market Analysis

Understanding your industry and target market is crucial for business success. Conduct thorough research on competitors to understand their strategies and determine how to outperform them. Utilize industry outlook reports and market trends analysis to gauge growth potential and identify market opportunities. Address essential questions about successful companies, why their strategies work, and how you can excel.

5. Organization and Management

This section focuses on your company's organizational structure and management team. Explain your chosen business structure, whether it's a limited liability company (LLC), S corporation, C corporation, sole proprietorship, general partnership, or limited partnership. Present an organizational chart showcasing key roles and responsibilities. Highlight the expertise of each team member and how it contributes to the business's overall success. Consider including resumes of key management personnel.

6. Product or Service Line

Describe your main product or service, emphasizing how it benefits customers. Indicate the stage of the product life cycle, whether it's in the introduction, growth, maturity, or decline phase. Discuss your plans to protect intellectual property, including patents or trademarks you already possess. If you're still in the research and development phase, provide detailed explanations of ongoing research and any future patent or trademark protection plans.

7. Marketing and Sales

Marketing and sales strategies are not a one-size-fits-all approach that works universally for every business. Tailor your marketing strategy to meet your specific needs based on the results of your market research.

The primary objective of this section is to outline how you will attract and retain customers, ensuring their continued engagement with your brand. Describe your company's sales process, whether hiring sales representatives, leveraging an e-commerce website, or employing other methods. This section will be referred to frequently when developing financial projections, so take the time to provide detailed insights.

8. Funding Request

If your business requires funding, utilize this section of the business plan to comprehensively explain your funding requirements. Specify the funding needed over the next five years and elucidate how the funds will be utilized to drive business growth.

Clearly communicate whether you seek a loan or are open to offering equity in your business in exchange for funding. Furthermore, articulate your desired funding terms, including the duration of the requested funding. Potential investors need assurance that their investment will be used wisely, so provide a detailed description of how the funds will be allocated. This may include covering salaries, acquiring the necessary equipment, or addressing specific expenses until revenue increases. Once profitability is achieved, outline your future financial plans, such as debt repayment or potential business sales.

9. Financial Projections

Support your funding request with financial projections that demonstrate your business's stability and potential success. For established businesses, provide financial statements spanning the past three to five years, including balance sheets, income statements, and cash flow statements. If your business possesses assets that can serve as collateral for a loan, list them in this section.

In the case of a new business, present financial projections for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, consider including monthly or quarterly projections to offer a granular view to the reader. Clearly explain your forecasts and ensure they align with your funding request. Utilize charts and graphs to effectively convey the financial narrative of your business.

10. Appendix

The appendix section of the business plan serves as a repository for supporting documents and information often requested by potential investors. Typical items in the appendix include credit histories, resumes of key team members, product images, letters of reference, licenses, permits, patents, legal documents, and contracts. Including these additional materials enhances the credibility and thoroughness of your business plan.

Lean Startup Business Plan

A lean startup business plan template is the perfect choice if you're seeking a quick and flexible approach to explaining or launching your business. This format is particularly suitable for companies that are simple or anticipate frequent changes.

Charts are crucial in a lean startup plan because they present essential information about your business. These charts provide insights into your company's value proposition, target customers, infrastructure, and financial aspects.

While various versions of lean startup templates are available, one of the most widely used is the Business Model Canvas, developed by Alex Osterwalder. You can find templates based on this model online or explore other versions that suit your needs. Let's explore the nine components of the Business Model Canvas:

1. Key Partnerships

Enumerate the companies or services with which you will partner to operate your business. This includes suppliers, subcontractors, manufacturers, and other potential collaborators.

2. Key Activities

Explain how your business will gain a competitive advantage. List activities such as direct consumer selling or leveraging technology to participate in the sharing economy.

3. Key Resources

Identify the resources you will utilize to create value for your customers. This typically includes capital, staff, and intellectual property. It's worth exploring programs like the HUBZone program, which provides valuable information about funding, programs, federal contracts, business guides, and local assistance tailored to specific groups such as women, veterans, and Native Americans.

4. Value Proposition

Craft a clear and compelling statement highlighting your company's value to the market.

5. Customer Relationships

Describe how customers will interact with your business. Clarify whether the process will be automated or personalized, and plan each interaction from beginning to end.

6. Customer Segments

Remember, the goal is not to sell to everyone but to target those who truly need your products or services. Define your ideal customer with precision.

7. Channels

List all the channels you will utilize to connect with your customers. Most companies employ multiple channels and refine them over time.

8. Cost Structure

Determine whether your company will focus on minimizing costs or maximizing value. Once you define your strategy, list the significant costs of pursuing it.

9. Revenue Streams

Explain how your company will generate revenue. This could include product sales, membership fees, or selling advertising space. If you have multiple revenue streams, ensure that they are all listed.

Business Plan Example

If you need an example of what your business plan should look like, we provide a comprehensive business plan template to assist you during the writing process.

Sample One-Page Business Plan

For a simple summer business focused on trading used boats, you can refer to our sample one-page business plan:

Summary

Bobby's Boat Yard

Our business concept is to opportunistically purchase underpriced used boats, refurbish them, perform minor repairs as necessary, and then resell them promptly at a fair price. We will specifically concentrate on renowned used outboard powerboats, notably smaller Boston Whalers, for which we can confidently determine fair market value and ensure quick resale.

Market Analysis

Our target market consists of boaters with prior experience owning an outboard powerboat and understanding the value of well-built boats like Boston Whalers. We specifically target individuals with moderate incomes looking for a cost-effective alternative to purchasing a new boat. Our focus is on customers who reside within a 50-mile radius of our yard, allowing convenient access to view and buy our ships.

Competitive Analysis

Our primary competitors include authorized dealers of the boat brands we specialize in selling. These dealers ensure that their used boats are in top condition before selling them but often charge a premium price. Additionally, we face competition from the general public, who may offer used boats at inconsistent prices and sometimes without necessary repairs or cleaning.

Strategy

Our key competitive advantages lie in our in-depth knowledge of the resale value of the specific brands of used boats we target. We can swiftly capitalize on opportunities to acquire underpriced used boats and efficiently conduct minor repairs and cleanup on our inventory at a minimal cost.

Products and Services

We have a highly focused approach, concentrating solely on well-established and reputable brands of used outboard powerboats. Our pricing strategy involves positioning our boats at attractive prices below those official new boat dealers offer. By undertaking necessary repairs and maintaining a consistent level of quality, we provide customers with a more desirable alternative to purchasing from the general public.

Marketing and Sales

Our primary marketing channels will be online platforms and the local newspaper's classified section. We will also utilize prominent "for sale" signs from the road to attract potential customers to our boatyard.

Operations

Most of the work will be carried out by Bob himself, except boat cleaning, which will be handled by hired hourly workers on an as-needed basis. Repairs will be conducted in the existing garage on the property or, weather permitting, in the open yard.

Financials

Projected Profit and Loss for the First Summer

Number of Used Boats Sold: 20

Average Sales Price: $3,500

Total Sales Projection: $70,000

Average Purchase Price: $2,800

Average Cost of Goods: $100

Total Cost of Goods Sold: $58,000

Gross Profit Margin: $12,000

Marketing Costs: $2,500

Other Operating Costs: $1,500

Total Operating Costs: $4,000

Profit Projection: $8,000

Planning Your Business – Frequently Asked Questions (FAQs)

What are the main objectives of a business plan?

A business plan serves three primary objectives: to determine your company's financial requirements, develop an effective business strategy, and persuade potential partners or investors that your business is poised for success.

What are the critical components of a business plan?

A comprehensive business plan typically consists of essential elements: an executive summary, company description, product or service description, market analysis, organization and management, marketing and sales, financial plan, and projections. Additionally, if you are seeking funding, including a funding request section is essential. Feel free to customize and add sections per your business's unique requirements.

Which business plan template is considered the best?

There is no universal business plan template that suits every business. While the Business Model Canvas is a popular choice for lean startup plans, there are other options available. If the Business Model Canvas doesn't align with your needs, explore other templates to find the one that best fits your business model. If you plan to approach traditional funding sources, a conventional business plan template might be more suitable.