Small Business Series: Preparing Your Business Plan

A strong business plan is important for your business no matter what stage you’re at in operations. In the beginning, a business plan is important for setting goals and obtaining capital from investors. A well thought out plan shows that you are professional, informed, and organized. If your business has been operating for a few years, a business plan can ensure you are on track to meet old goals while helping you set new goals for your growing business. It can also help you get those creative ideas you have floating around in your head out into the real world. If you are looking to sell your business, a business plan can promote the potential of the business to prospective buyers. Most business plans include the following:

Executive Summary

The executive summary (sometimes called the statement of purpose) broadly states a summary of your entire business plan. With a maximum length of one page, the executive summary serves to engage your reader to persuade them to continue to read the rest of the plan.

Company Description

In this section you'll describe your business in greater detail than you did in the executive summary. You'll want to write about things like the history of the business, its legal structure, and what the goals of your business are. These are just the tip of the iceberg and will go a long way in educating readers about your business.

Market Analysis

Now that you've explained who you are, how do you fit into the larger market? The market analysis section allows you to demonstrate your knowledge about the industry you're in. This can include information about customers, competitors in the same space, and how the industry as a whole is doing.

Organization and Management Description

What does your organizational structure look like? Anyone reading your business plan will want to know who the owners, managers, and employees that make up your business are. This includes information like names, roles, job descriptions, and responsibilities. Something like an organizational chart that breaks your business down into departments and shows a clear hierarchy can go a long way at giving readers a "bird's-eye view" of your business.

Explanation of Services or Products

This portion of the plan is dedicated to what your business has to offer in terms of what you're selling. Beyond that, it also gives you the opportunity to focus on how customers benefit from your product or service. It's also important to include financial information. For example, if your business sells a product, you'd need to detail how much it costs you to make said product and what your net revenue would be after a sale.

Marketing and Sales Plan

Potential investors will want to know how your business intends to reach your target audience and convert them into customers. Your marketing and sales plan will provide the method through which you'll acquire and sell to your customers. You'll also need to state how you'll evaluate the effectiveness of your plan. For example, did you capture a 5% larger share of the market? Did you convert 10% more prospects into customers? Setting goals like these will show that you've got a plan and a way to evaluate said plan.

Financial Projections

Where do you expect your finances to be? This section deals with your history when it comes to financial data, if you have any, at the time of writing your business plan. This will include things like balance sheets and cash flow and income statements. After that, you can make your projections about where those previously mentioned elements might be for the next few years. These projections can be written in the form of quarterly and yearly goals.

Funding Request (if applicable)

If you're starting or have recently started a business, there's a good chance you're looking for investors. The funding request is a section of your business plan dedicated to this goal, and as such should be the final of your plan. The funding request needs to clearly state a few things: Why the funding is needed, a concrete amount needed, how the funds will be utilized, parameters of funding, and finally, how the funds will be repaid.

Length and Procedures

Business plans can vary in length from 15 – 60 pages, depending on the purpose of the plan. If you're not a strong writer, or do not have the time for the comprehensive “deep dive” into the inner workings of your company, there are many companies and freelancers who can create a professional business plan for you. You may also already have staff on your team who can take on the project. If you’re using your business plan to find funding or otherwise promote your business, it is particularly important that your business plan be clear, concise, professional, and free of errors.
 

After start-up, review of your business plan is just as important as the initial creation. Smart business owners review their business plan every two or three years to see if the business is still on track with initial goals. This is also the time to update and make changes to your business missions and organizational structure.

It’s often easy to let day-to-day operations take focus, but a clear business plan can keep you on the right track for success.

This list of license and permit examples may or may not apply to your business. Consult your local and state governments, and small business associations to determine the licenses and permits required for your type of business and its location. 

This article is Part 4 in our Small Business series. Previously published blogs can be found below:

Part 1: Nine Steps for Starting Your Own Business

Part 2: Choosing the Legal Structure for Your Business

Part 3: Obtaining Licenses and Permits

To help your business reach its full potential, you need a partner in your financial growth. Click here to view Florida Credit Union’s business product offerings and see how we can help your business reach new heights.