You have a promising idea — one you can easily envision becoming a profitable business venture. Now it’s time to translate that idea outwardly, literally putting it down on the page for the world to see. Creating this formal business plan will also give you the opportunity to flesh out all the details associated with starting a business.
Not only is it important to include enough detail in your business plan, but it’s crucial to make sure you’re including the right information. You want this write-up to cover all the key bases the first time around, leaving anyone who reads it with no questions as to how you plan to execute your dream. After all, an airtight business plan is an absolute must for securing funds.
Here are some practical tips for formatting your business plan.
Make an Outline for Your Entire Business Plan
As tempting as it is to jump right in and write down the idea currently bouncing around your head, a smart first step is creating the entire outline — even for the sections you aren’t ready to fill out quite yet. Having these placeholders will serve as a reminder to return to them when you’re ready to delve into them.
It’s normal for business plans to vary a bit, particularly in the order of the sections and the exact language. Here is just one example of what a thorough outline could look like:
The first section of a business plan is always an executive summary. Yahoo Small Business describes this section is a brief summation of the entire plan to follow — usually between one and four pages.
The idea here is that someone pressed for time could read this executive summary and walk away having learned all the key points contained within the document.
This next section will be short — just one or two pages — describing a high-level overview of your business, including its name, objectives, industry outlook and revenue.
As one expert recommends for Entrepreneur, a good rule of thumb is to describe your company, the industry it will be operating within and its product/service offerings in one paragraph each.
Anyone deciding whether to help fund your business will want to see you’ve developed a deep understanding of its market, this is a critical aspect of your business plan. How and why is the industry growing? What gaps currently exist in the market? Who will be your main competitors in your niche? Fall back on the most recent data you can find to provide context here.
You’ve covered external market forces, now it’s time to describe in more detail the inner workings of your company. This includes how it will be legally incorporated as well as how leadership will function within the company, including at the individual and team levels. Furnish possible funders with information about the specific strengths and skillsets of your team members, especially executives and managers.
You touched on the products and/or services your company will provide in the general overview, but now it’s time to wade into the nitty gritty details. This is the place to include your unique selling proposition by answering the question why customers should choose your company over others. The more specifics you can provide here, the stronger your case will be.
This section brings together your knowledge about your industry with your company’s unique offerings and operations. Discuss exactly how you plan to position your business as a winner to its target customers — including topics like marketing, branding, customer retention, etc.
Finances and Funding
The financial section may very well be the heftiest section of your entire plan. It will certainly contain the most hard numbers. This is where you will lay out expenses, income, cash flow projections and liabilities. An important component is the balance sheet, which provides a snapshot of your company’s performance using the formula Liabilities + Equity = Assets.
The appendix is where you will attach supporting documentation in one convenient location.
These essentials are found in every airtight business plan, but there is wiggle room for extra customization in how they are formatted and presented based on the exact needs of your business.