After all your planning and anticipation, it’s time to bring your business to life. A business plan is critical: you’ll need it for loan applications, or to show investors. But most importantly it will help you define the road map ahead and identify areas where you will need to fine-tune, rethink or recruit help for a successful business launch.
Wondering how to start a business plan? Our experts recommend taking on your small business plan one section at a time, one piece at a time, and let the gradual progress eventually build momentum through the end of the planning period.
Here is a quick overview of the most important parts of your business plan:
Executive summary and overview
Your executive summary is your opportunity to sell someone on your business in under one or two pages. Craft this section so that it is the shortest version of your company story, and is immediately clear what value your business is providing.
The accompanying overview can be more lengthy and go into more detail about your business, including things such as your mission statement, structure and ownership. It’s a great opportunity to paint a fuller picture of your company, with more details about your products or services as well as the opportunity in the marketplace.
Products and target markets
This is the spark that started you down the path of business ownership: the idea of a product or service that you could provide, better than anyone else. The Products section of your business plan details the problem you’re solving for your customers, and how it will be different from any competition offering similar goods or services.
Your target market section is an introduction to the customer who is going to love your product/service and, just as important, your business itself. A company cannot simply sell a product; ongoing branding efforts and customer engagement are important considerations in attracting and keeping loyal customers.
Starting a new business means diving into untested waters. But you can build confidence into your business structure simply by spotlighting the experience and business chops of your fellow partners. The management team section of your business plan gives potential lenders and funders peace of mind by letting them get to know you as the founder, as well as the handpicked group of hardworking people by your side. And of course, in many small businesses, there’s only one person on the management team — you — and that’s totally ok.
Financial plans and measures of success
Measuring your business’s success requires careful tracking of your inflows and outflows. Investors and lenders will want to see financial documents that show that you anticipate this success, including a sales forecast, personnel plan, cash flow statement, profit/loss statement and balance sheet for at least three years out; some investors ask for projections even further into the future.
There are many resources online that offer detailed instructions on developing the sections above. Individually, these chapters are parts of your business story that you can revisit and evolve as your company becomes more established; as a whole, it will help you communicate with internal as well as external partners, conduct business reviews as your company grows and changes over time, and even help determine value should you decide to sell your business. All you need to do is start the plan — and keep it moving forward.