Elements of the Plan
A business plan typically includes a written overview of the business with a description of the product or service provided, the market served, the competition faced, and the people involved in the business. It might also show financial projections going out three to five years, with revenue and expenses detailed monthly for one year. If your business is in operation already, your plan would also include past financial documents such as income statements and balance sheets.
Your business plan could include some or all of the following:
Title Page
Statement of Purpose
Table of Contents
Business Description or Executive Summary, including:
Product or service Location and competition Management and organization
Marketing Plan, including:
Description of the overall market Target market for the business Customer needs and characteristics Analysis of the competition Overall sales plan
Financial Data, including:
Capital equipment needs or assets Funding sources Cash flow projections Income projections Balance sheet
Supporting Documents:
Resumes of management and partners, letters of recommendation Personal financial statements and cost-of-living budget (for a sole proprietor) Past financial history (business financial statements for the previous three years, if available) Relevant contracts and legal documents Documentation of market research, if any
While it's true that plenty of businesses launch and survive without a business plan — and that having a plan doesn't necessarily guarantee success — taking the time to write one gives you a chance to clarify exactly what you want to achieve with the business. It also provides hard numbers that will either back up what your instinct is telling you about the marketplace or let you know that you need to rethink elements of the business. And as any coach will tell you, writing down your goals and the steps you plan to take to achieve them gives you a competitive edge even before you start.
