It doesn’t matter if you are creating your first business plan or reassessing the one you already have in place, some details are too important to overlook.
Knowing what to include in your business plan is half the battle. From there, it all comes down to execution.
If you need help getting started, you can rely on a free business plan template to show you the way. For those who are more tech oriented, there are several apps that can help turn your vision into a concrete plan.
Regardless of how you get started, the best business plans always include the following five things:
1. Overview (Executive Summary)
This is your opportunity to put your business concept into words. In this section, you can answer questions such as:
- Which industry are you joining?
- What business structure makes the most sense?
- What types of products and/or services will you offer?
The overview will serve as the jumping off point for the rest of your business plan. You shouldn’t have much trouble with this part of your business plan, as it entails the most basic details regarding your organization.
2. Products, Services, and Competitive Advantages
This section can (and probably will) change over time, but that doesn’t mean you can ignore it right now.
In this section, you will list all your product and service offerings. It doesn’t matter if you have one or 100, it is important to include each one. This gives you the chance to learn more about your lineup, which could lead you to make some very important decisions (such as eliminating offerings).
Along with a detailed list of products and services, it is essential to focus on the competitive advantages of each. What makes your widget better than those provided by the competition? Why is your service going to succeed when there are so many others offering the same thing?
A competitive advantage is nothing more than the features that set your product or service apart.
3. Marketing Strategy
You can have the best product or service in the industry, but you won’t reach your goals unless people know about it. This is where your marketing strategy comes into play.
Use this section to answer questions such as:
- Who is your target audience?
- What marketing strategies will you employ?
- How much money do you have in your marketing budget?
- What is your demographic audience?
- What process will you follow to attract and retain enough customers to generate a profit?
- What marketing methods can you implement that your competition is overlooking?
Just the same as many parts of your business plan, your marketing strategy is likely to change as your organization grows. For example, you may not spend much time on social media and content marketing in the early days. However, as you grow, you may soon find that both these techniques can generate a positive return on investment.
4. Industry Analysis
It’s only natural to believe that your company will dominate the industry you are joining. And there is nothing wrong with having this type of confidence. If you truly want to rise to the top, it is imperative to analyze every aspect of the industry.
Upfront, you may make the mistake of believing your business is 100 percent unique. As you search around and learn more about the industry, you could find that this is not the case.
An industry analysis gives you the opportunity to answer the following questions:
- What is the size of the industry?
- Who are your primary competitors?
- How much market share do the top companies hold?
- Why would customers choose your product or service instead of relying on an established provider?
- What are the barriers to entry?
Tip: in addition to direct competitors, make a list of indirect competitors that could join the industry in the future.
5. Management Team
A company is only as good as its management team. When creating a business plan, don’t hesitate to include information on every member of the management team, as well as key employees who are already on board.
This does not have to include paragraphs of information on each person. Instead, you want to focus on how each person fits into the company, what they have done in the past, what they will be responsible for in the future, and what makes them unique when compared to other professionals.
All founders should be included in this portion of your business plan, along with any key employees. These could include but are not limited to: Vice President of Marketing, Head of Sales, Chief Financial Officer, and HR Manager.
Does Length Matter?
There is no right or wrong length for a business plan. Some founders are able to get their point across in five to 10 pages. Others, however, find it necessary to expand their plan to 25 to 50 pages (or longer).
As long as you include the right information, as long as you avoid clutter, you will be happy with the end result.
Tip: if you are seeking outside funding, such as from a venture capital firm, it is important to create a comprehensive business plan, leaving no stone unturned. Potential investors will want to know everything about your company.
Review Before Finishing
Before you call your business plan complete, here is something to do: put it away for two days and then revisit with a key member of your team. Upon reviewing, don’t be surprised if you come across a few areas that need adjusted.
Creating a business plan is typically the first step in achieving success. Make sure your plan includes the five things listed above.