Outline your business strategy: Business Plan
What is a Business Plan?
A Business Plan outlines the financial, marketing and operational strategies a business will use to achieve its goals. Business Plans, when starting a business, especially when launching a startup with high growth expectations, can be critical to success.
Essentially, a Business Plan documents what your business is all about and how you’re going to make it grow. With a clear plan in writing, it’s easier to pitch your ideas to potential partners and investors, and to communicate your mission to your customers, clients, employees and leaders.
It does not need to be a laborious task. Using our Business Plan template you can build a professional plan, specific to your state, with minimal effort if you know your business well. You can even customize this Business Plan sample to include details about the company, product, or service, and provide information on the market, forecasts, and financial analyses.
When to use a Business Plan:
- You want to start a new business and want to set out the blueprint for the new venture.
- You will present your plan to potential investors to clearly outline the business goals, financials, and strategies.
- You are a business owner who wants all your employees and leaders to know the mission and goals for your business.
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Sample Business Plan
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CONFIDENTIAL BUSINESS PLAN
| This __ day of ____________, ______. | ____________________________________ |
. EXECUTIVE SUMMARY
, (hereinafter "Business") is intended to be formed as a located at , , , poised for rapid growth in the industry. The Business seeks funding to take advantage of a window of opportunity for introducing a new productservice, which has the potential to dominate the market.
Business Description. The Business is to be organized as a formed and authorized under the laws of the State of Commonwealth of , and will be led by , who will serve as .
New Product. New Service. The Business has developed a product service which has the following specifications:
The Business has a window of opportunity to introduce its products services and gain a significant piece of the market share.
. BUSINESS SUMMARY
The business is a start-up business, providing clients with .
Industry Overview. The industry in the United States currently generates in annual sales. Annual revenue for the regional market where the business is located is estimated at .
Position in the Industry.
Legal Issues. The promoters have secured the required patents and trademarks for the products services and processes of the business in accordance with the statutory requirements.
. MARKETING SUMMARY
Target Markets. The main target markets for the business include:
| - |
| - | __________________________________________________ |
It is estimated that there are potential customers within the Business defined trading area that are estimated to spend . To seek the most profitable market segments in the target markets overall, the Business will focus on the following areas within the target market:
| - |
| - | __________________________________________________ |
Competition. Customer choice of services in this industry is based on
Services. The Business intends to provide exceptional, personalized service, which will be the crucial factor in building and protecting the Business's brand within the community. The Business intends to handle customer concerns and issues with a customer oriented focus with the intent of providing timely resolution and preventing the loss of customers.
. STRATEGY AND IMPLEMENTATION SUMMARY
The Business plans the following tactics as part of sales promotion:
| - | Develop a list of businesses in the neighborhood and send brochures by direct mail to the list. |
| - | Advertising through press releases to industry publications and local newspapers. |
| - | Internet marketing |
| - | Direct sales |
| - | Posting signage and flyers about the new business on bulletin boards in stores and public places. |
In addition, the Business will also engage in the following marketing campaigns:
| - |
| - | ______________________________________________________ |
| - | Sale of Equity |
| - | Public Offering |
| - | Strategic Sale/Merger with other similar enterprise |
| - | Management Buyout |
| - | Liquidate Assets |
. FINANCIAL PLAN
The Funding Request in this Business Plan outlines the major start-up costs associated with this business. Other costs include repair and maintenance, sales and production expenses. Regular monthly expenses are estimated at for paying the employee salaries and other regular business expenses. The Business is expected to generate in the first year, and gross profit is expected to be .
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About Business Plans
Learn about how to outline your business strategy
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How to write a Business Plan
Unlike what many people might think, a Business Plan is not simply a description of your business. It includes market analysis, marketing strategies, financial goals, funding and liability information, and company structure details.
Even if you are a sole proprietor, it will help you to set concrete goals and plan the future of your business. A Business Plan will also make it easy for investors to say yes. However, you'll need to do a bit of work to be able to create a comprehensive plan. Below are the steps you need to take to write an effective Business Plan:
1. Identify your business's primary goals
What are your goals for the business within the next five years? This, along with what exactly you're offering as products or services, should be stated at the beginning of your Business Plan. Make it concise and easy to understand even to people who aren't familiar with industry jargon.
2. Make an executive summary for your Business Plan
The executive summary highlights all the information that you will present in the Business Plan. This summary goes beyond your primary goals to include things like your mission and product or service details, but should be no more than two pages. If possible, make it no longer than one page.
Writing a good executive summary for your Business Plan is important because it may be the only thing an investor reads to decide if they even want to bother with reading the rest of your plan. It should be able to grab the reader right away and entice them to want to learn more. Here are a few tips for writing an effective executive summary:
- Tailor it to your audience, change whenever needed.
- Add a sense of urgency, make it timely to the market and ideal to move on now.
- Include what needs it fills in the market, what real problem it solves.
- Make it more personable by using language like "us" and "we" rather than "the company."
- Use confident and positive words and remove indecisive language.
- Write it without worrying about the length and then shorten it as much as you can.
- Avoid cliché terms like "best in the world" or "industry disruptor."
- Show it rather than tell it.
- Test it before you send it.
- Write it after the rest of the plan is complete and well researched.
If you do not need to share your Business Plan with others, you may not need an executive summary. However, it is a good exercise for building your elevator pitch for times when you talk about your business with potential investors or clients.
3. Write your business summary
Write a description of your business, including information about your general industry, outlook, and current trends and competition within your niche, as well as what needs it fills for potential customers. Your business description shouldn’t be longer than one page unless you are citing specific statistics and research.
4. Detail your strategies
General Strategy and Implementation Strategy
This section details the plans for promoting the business through sales promotions and pricing strategies. Use this section to clearly outline all plans for promoting the business. Include the most basic ideas, such as posting signs and flyers, and the more complex plans, such as hosting promotional events or contests. This section should assure potential investors that every effort will be taken to make this business venture a success.
Marketing strategy
How exactly do you plan on reaching your new customers? If it is a small local company, are you going to put up signage and attend local events? If your business is online, will you pay for ads or hire an online marketing or SEO company? Do you have strategic relationships with already established businesses? A good market analysis might also help you to see the potential weaknesses in your current marketing strategies so that you can set realistic goals. You can make your marketing plan as long as you need it to be. Here, the more detailed you are, the better.
Exit Strategy
An exit strategy describes how the business will end, although that does not necessarily mean going out of business. It may include selling the business to a new owner, passing it on to a family member, or even using an initial public offering (IPO) to go public.
5. Provide an analysis of your market and competition
What will you offer that is better than your competitors? Research your core competition. Analyze what they are doing well and where they are failing. If you can find weaknesses that you can capitalize on, make note of those weaknesses in your Business Plan. Take the time to differentiate yourself in the areas in which you are similar.
You should also be able to describe your market in quantifiable terms, like how many potential customers are in the market and what you expect them to spend. Remember that this part of the plan will be of as much interest to potential investors as it is to you.
How to evaluate your business competition
Often small business owners are so excited about their product that they forget to consider their competition. If you are planning on opening a local business, you likely know your competitors. But if you are starting an online business or are in a large city, you'll benefit from some market research.
One way to perform this analysis is to create a side-by-side comparison. You can compare pricing, product offerings, web presence, user review scores, size of business and market reach, customer profiles and more. If you are starting a restaurant, you could compare menus, pricing, customer loyalty and patron reviews. If it is an online business, you can compare keyword terms, social media presence, subscription pricing models, or customer service responsiveness to find a competitive angle.
You may even benefit from hiring someone to do the research for you since they might be more objective than you. For instances, companies with large budgets may hire a marketing agency to evaluate the market for them. Regardless of your budget, market research is not a step you'll want to skip in the business planning process.
How to make a SWOT analysis for your Business Plan
A SWOT analysis can increase your business awareness and provide a valuable addition to your Business Plan. It’s split into four sections - Strengths, Weaknesses, Opportunities and Threats - with each one detailing the various relevant attributes and downsides to your business and the industry.
Strengths
This is where you can highlight the qualities of your particular business, whether it’s the skill set, industry knowledge or a specialist resource. Do you have any specific intellectual property rights? Have you secured a retail space with a particular high foot traffic? Think about all the potential advantages of your business compared to your key competitors.
Weaknesses
if your business is lacking in a certain area you’ll need to specify how you plan to deal with it, as well as address any weaknesses compared to your competitors.
Opportunities
Make a general case as to why your business will succeed in a certain market, as well as detailing any specific opportunities and the possibility to claim a niche position.
Threats
Threats are any external factors that you have no control over and that may detrimentally affect and threaten your business. Try to be frank about any potential reasons your business may not succeed, particularly in light of existing or possible future market conditions.
Remember to detail contingency plans for dealing with such threats. Having in place contingency plans allows a business to plan for an outcome other than what was expected, as a result of any threats. As a result, contingency plans can help solve or alleviate any threats to the business by allowing the business to adjust to different circumstances and outcomes.
6. Describe your development and operation plan
It is important to plan how you will help your business to succeed. Lay out the general tasks and functions that your business engages in on a regular basis. Include the formal organization of the business, responsibilities of administrators and employees, and ongoing development plans. Here’s a tip: you'll get more investor confidence if your key members have a proven track record in running a business or working in the industry.
7. Include a financial analysis and plan at the end of your Business Plan
This section lays out your financial bottom line. List your financial assets and liabilities clearly. Be sure to also make it clear what you’re asking investors for, and the projected return investors can expect to receive for their investment.
Putting together the specific figures that you need as well as a clear plan for how the money will be paid back can be quite effective in this section. Because financial information can be quite complicated and confusing, you should consider putting it in chart format. You can create a basic pie chart or graph sheet. If possible, use colors to make your visuals easier to read. You want investors to be able to understand your company’s finances at a glance.
How to make a financial plan for your Business Plan
Investors like to see that you’ve done the math. Including detailed financial information proves that you have a grasp of the all-important monetary aspects of running a business. Unless you’re setting up a charity or social enterprise, you need to be aiming towards making a healthy profit.
Projections you must include in your proposal are:
- Employee salaries and overhead costs.
- Revenue and sales.
- Percentage of return you expect from your products or services.
- When your business will produce enough revenue to cover all costs (break-even point).
A cash flow forecast is one of the most important elements of a financial plan. The amount of capital you require can be determined largely from accurate predictions of cash flow. Even if your profit is high, a lack of readily available money can lead to major problems including insolvency. For example, if you’re waiting for substantial Invoices to be paid, while you may be owed a lot, without cash in the bank, you may not be able to manage your expenses, pay employees, or order new supplies.
The simplest way to forecast cash flow is to list monthly income and expenditure costs, preferably with annual totals. Try to think pragmatically and account for all kinds of variables. For example, you’ll probably need to use more heating over the winter months so your gas and electricity bills will increase. Similarly, if your product is seasonal (like an ice cream stand or snow plowing business) then you’ll need to revise your income for the relevant season.
A Profit and Loss (or P&L) Form indicates how well a business has performed overall. It differs from the cash flow forecast in that it shows how much profit has been made (or the amount of loss sustained) over a specified period (usually a year), but it doesn’t account for actual cash in the bank.
Overall, for this part of your Business Plan you'll need to map out how you plan to finance your business, even if all you have so far are projections. Do you have a business loan? Are you going to pay yourself a salary from the business? How much of the seed money will be from your own savings? Investors will also want to know if you plan to take on additional debt or if other investors are involved.
You'll also want to show how you plan to pay back debt and when you expect to be profitable. After all, the return on investment (ROI) is a key element of any Business plan, showing how much effect an investment will have upon the business.
State a realistic repayment period – it’s better to overstate the time required to avoid disappointment and show that you have taken various scenarios into account. You should also state how exactly your investors will make a profit. Will you repay them with interest? Do they get shares in the company?
An investor will want to know exactly why you need their money and what it will be spent on. You may have an excellent business idea but you’ll have to prove that the funding sought will directly lead to success.
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Business Plan FAQs
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How do I know if I should make a Business Plan?
You may want to make a Business Plan if:
- You are starting a business and want to outline your goals and strategies.
- You need to communicate your business concept to potential investors.
- You want to test your business idea for viability.
- You and your partners want to build a plan together.
Our Business Plan builder is suitable for most types of businesses from small to large, including online companies, service providers, nonprofits, side hustles and home-based businesses. Making a Business Plan helps you, and others, see the potential of your business.
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What is included in a Business Plan?
A Business Plan is not simply a description of your business. It includes market analysis, marketing strategies, financial goals, funding and liability information, and company structure details. What this means is that you'll need to do a bit of work before writing to be able to create a comprehensive plan.
The key areas you'll need to concentrate on include:
Product or service
You'll need to be able to tell others, in a few words, exactly what you are offering as products or services. If the product is highly technical or new to the market, you'll want to figure out the best language to use to explain the concept to those who may not be familiar with industry jargon. You should also be able to explain what need this fills for potential customers. You can include images in plan attachments if that helps.Company structure
You need to define who is part of the business and what their roles are. For investors, you'll also want to show how each member is qualified to fulfill their duties. For example, you'll get more investor confidence if your key members have a proven track record in running a business or working in the industry.Market
It is critical that you identify your potential market. If there is a lot of competition, what will you offer that is better than your competitors? If you want to open a coffee shop across the street from another coffee shop, you'll need to be able to explain why that makes sense. You should be able to describe your market in quantifiable terms, like how many potential customers are in the market and what you expect them to spend.Marketing
How exactly do you plan on reaching your new customers? If it is a small local company, are you going to put up signage and attend local events? If your business is online, will you pay for ads or hire an online marketing or SEO company? Do you have strategic relationships with already established businesses? You'll also want to map out your marketing schedule and how you plan to pay for everything.Financial plans
You'll need to map out how you plan to finance your business. Do you have a business loan? Are you going to take an income from the business? How much of the seed money will be from your own savings? Investors will also want to know if you plan to take on additional debt or if other investors are involved. You'll also want to show how you plan to pay back debt and when you expect to be profitable. They may also want to see a tentative budget.Funding needs
If you are looking for investors, how much do you need and how exactly are you going to use the funds? How do you plan to pay back investors and when? Do you have collateral you are willing to put up? Are you prepared to give up equity? What other funding options have you tried? How long can you operate without funding?Once you have done your research and have a solid plan for moving forward, you can sit down and create your Business Plan easily using our online document builder.
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Who should review my Business Plan?
Looking at your business like an outsider is difficult for many small business owners. But your investors, unless they are family or friends, are going to look at it objectively. This is one of the reasons you need a Business Plan capable of surviving intense scrutiny. Once you have your Business Plan made, try to look at it as if you were a stranger to your business. Have a few respected colleagues read through it as well and tell them not to be nice, but to find as many weak areas as they can. If you need to keep your business information private, you can ask those reviewing your plan to sign a Non-disclosure Agreement. If you find information you need to change, you can easily edit your plan. In fact, a Business Plan is an evolving, working document, so change it as often as you need.
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What should I do if I am stuck?
Sometimes it is hard to complete all the parts of your Business Plan in a way that is impenetrable. Again, you may have to look at your business objectively to evaluate whether it makes sense or not. Is the market already saturated? Is there a market at all? Is there a way to test the market? Is there a certain segment of the market more suitable for your product? Do you have the time to run your business properly? Can you realistically afford to meet your objectives? Do you have the right partners? Is it the best time for your product or service to be launched? Are your goals realistic?
If you cannot answer these questions, it may be time to reevaluate your business idea and market. Perhaps somehow you are missing the mark. Also, try not to overthink it to the point of road-blocking yourself. While it is important, it is better to have a Business Plan that needs work rather than no plan at all.
A good Business Plan is not fabricated around your pie-in-the-sky dreams for your company to "trick" investors into buying into your vision. A good plan is a working document that proves you have a product or service that can be viable in the real market. Even if you are not seeking funding, creating a functional Business Plan is an excellent tool for proving your business idea is a good one.
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