Thinking of starting your own business? The first thing you'll need is a business plan.
A business plan can help you secure credit, budget your time and money and outline your goals for the future.
What is a business plan?
Think of a business plan as your roadmap to success. A good business plan lets you formulate the best route for your business to take. It can even help you find your way through hard-to-navigate financial and logistical passages.
While all business owners should have such a plan in place before they go looking for funding or open their doors to customers, not all plans need to be the same.
Your plan depends on the goods or services you offer, how much funding you need and what your goals are for the future.
Not only can writing a business plan help you keep track of your ideas and goals, it can also help you obtain funding. If you need to take out a loan to get your business off the ground, or if you'll be seeking out investors to help fund your business, then a detailed business plan is a must.
Creditors will want to see how and when you'll be able to repay them. Investors will also want to know when they can expect a return on their investment.
If you plan on requesting funding of any kind, then you'll want to pay very close attention to the financial sections of your business plan.
Business plan format
Examples of these sections, along with other crucial information to be included in your business plan, are listed below.
The executive summary
This is usually the first section of any business plan. It gives the reader a condensed idea about what your business is all about and how you intend to accomplish your goals.
While the executive summary may be the most important part of your business plan, you might want to hold off on writing it until you've worked through the rest of your plan.
Think of this section as an extended elevator pitch. You want to explain in depth the goals of your business and how you will satisfy the needs of your market.
Your company description also explains the competitive advantages that you believe will make your business a success.
The market analysis section is where you explain your research to readers, including exactly who your target market is.
Organization and management
The organization and management section tells your readers about the structure of your business and who in the company is responsible for different operations.
Service or product line
The service or product line section includes a description of your product or service and any associated copyright information or research and development activities.
Marketing and sales
The marketing and sales section of your plan includes information on market penetration and growth strategies for your business, as well as information about your sales strategies and activities.
If you plan on asking for a loan or other financial assistance, then you'll need to include a funding request as part of your business plan, which includes specifics about how much money you need now and how much you'll need in the future.
Creditors may also want to see a financial projections section, outlining what your business will accomplish financially over the next three to five years.
Keep in mind that the sections listed above comprise the conventional elements of a business plan.
However, your business plans can be as unique and diverse as your business. It should be a reflection of the kind of business you wish to start.
To get an idea of some of the different ways to approach a business plan, visit Bplan's sample business plan gallery. You can also start your own business plan online by registering with the Small Business Association.
There are also business plan software programs — starting at round $100 — that will walk you through the process by asking you questions and generating a formal business report.