So you want to start a business and it’s time to start your business plan. How do you write one? What must you include in it? Where can you find help? Read on!

The Parts of a Business Plan

1. Executive Summary
2. Market Analysis
3. Company Description
4. Business Organization
5. Marketing
6. Products / Services Offered
7. Funding Requests
8. Financials
9. Appendix

I. Executive Summary

This is probably the most important part of your business plan because it’s the first part a reader, like a loan officer, will read. Although it’s first in your document, it should be written last. This is because you want to hack out all the details in your plan and then summarize it all. You wouldn’t write the summary first and then your document.

Also, when you write this part, keep in mind this could make or break you getting a business loan or investor to contribute. Tell your reader why you think your business will be a success. Paint the picture for them. Show how your experience and background is the perfect match for this business. Tell them about your niche in this market and how you are going to fulfill unaddressed needs of customers.

Parts To Include In the Executive Summary

• Mission Statement. Not too long and very to the point.
• Date Business Began
• Names of founders and the functions they perform
• Number of employees
• Location(s) of your business
• Description of your physical place of work
• Products/Services offered
• Banking used and investor information
• If you’re an already established company include growth information
• Future plans
• A table of contents (following the Executive Summary

II. Market Analysis

This part should show your industry in its current state, describe it, and show where it’s going. It should describe your target market and industry; giving its current size, provide growth rates, target market information, market test results, lead times, and evaluate your competition. Don’t get too much into marketing research, though. Put the bulk of that in your Marketing section. This section is more about analizing the market and doing a competitive analysis. Don’t forget to include any list any regulatory restrictions that may apply to you (i.e. any requirements you may need to get or could affect your business, such as a contractor’s license, insurance, etc.).

A lead time, by the way, is the amount of time between when your customer places an order (for your service or product) and when they actually receive it.

III. Company Description

Under this section you will not only describe the nature of your business but show how it’s going to be a success. Show the reader of the plan who your target customer is and how you’re going to fulfill their needs and solve their problems.

IV. Business Organization

This section should describe how your business is organized. Who are the board of directors, owners, employees, etc. Show their backgrounds and history, if you can. Show why they are qualified for the position they have been given. What kind of benefits plan do you offer (if any). What and how are salaries being paid. Is your company incorporated? Does it own property? Do people own stock in your company? What percentage? Again, paint the picture for the reader of your business plan as to how your company is organized and functions.

V. Marketing

When I create a business plan, I typically begin with a bunch of scrap notes, flow charts, and things crossed out – especially when figuring out my marketing plan. Then I translate that into something someone can read and organize it in a logical pattern or sequence. There is no one specific way to draft up your marketing plan. Here are some points you may want to consider addressing:

• how are you going to break into this market?
• how are you going to distribute your product, will that in itself be marketing?
• how are you going to reach your customer?
• how are you actually going to sell your product?
• what avenues of marketing are you going to use (traditional media / social media) and how are you going to use them?

In this section you also want to show your sales strategy. How are you going to sell your product? Who’s selling it and how did you recruit them? How is your product distributed?

VI. Products / Services Offered

Tell the reader of your plan what exactly it is you are selling or providing. Describe it and show how your customers need it. Focus on the benefits of your product and how it solves your customer’s problems. Show how your product or service is better than your competition; again remember to focus on the benefits or your product. You should list the features but the benefits always sell better.

Be sure to point out any copyright, trademarks, or patents your product may have. Are there any secrets to your product (e.g. special ingredients). Tell the reader about it.

Finally, if you’re involved in any special product development committees, research, or continuing education concerning your product, point that out.

VII. Funding Requests

As the topic says, this is where you would request any funding needed to start or expand your business. It’s ok to give options for funding (like the minimum you must have or terms) if you feel it’s unlikely a bank or investor would even consider your request. Be sure to tell the creditor how and where their money is going to be used. Is it used for rent, inventory, hiring employees, product, etc. Tell them what happens in certain senarios (do you plan to sell your business after 5 years?).

Have others you know read this section before you give it to a creditor. Make sure they understand exactly how much you need, when you need it, what the money is for and how it’s used, and by reading the next section, how you can afford the loan (or whatever funding you’re asking for).

VIII. Financials

In this section you want to include any historical finances you have records on. For example, if you already owned a business you should show the company’s performance, requested loans, and payback history (hopefully no bad debts). If you have it, provide up to 5 years of data. Creditors want to see history.

Next you want to include any prospective financial data for you company. Creditors usually like to see a forecast of about 5 years on what you expect your company will do. Projections to provide here would include:

• cash flow statements
• forecasted income statements
• capital expenditure budgets
• balance sheets

If you want to get creative, include some kind of graph. People like pictures – and creditors are people.

IX. Appendix

The appendix should not be attached to your business plan and only provided when requested. It contains sensitive information that not everyone needs to see. Here’s what it should have in it:

• Resumes
• Written references
• Both business and credit reports
• Pictures of your business, inventory, assets, etc.
• Licenses / Permits
• Contracts
• Business relationships

That about sums up a business plan. If you want to learn more, here are a few links you might find helpful.

• Here’s a business plan template provided by SCORE
• Visit the Small Business Administration
• Here are some sample business plans you can look at

On a final note, keep in mind this is a personal document. Keep its distribution controlled. Take note who has it and where it is.

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