A business plan is a defined road map that outlines the goals of a company in written form. Because it is designed to be updated, it is considered a 'living' document. A solid plan outlines the future of a company and contains elements that guide company decisions. Quite simply, a business plan is a description of a company's future. Hence, you must have one no matter the size of your company.
Having a well-written plan is essential for several reasons, no matter the size of the business. Not only does it act as an internal road map for guiding decisions, it is a requirement for courting investors and lending agents. Therefore, not having one often means the difference between receiving funding or going out of business.
This article will help draft your business plan by looking at what a plan accomplishes, what the basic elements are and how to manage them.
Goals of a Business Plan
Business Plan Elements
- Executive Summary: Acts as a snapshot for your plan, with an abstract about your company and goals.
- Company Description: Provides information on what the company does, how it's different from competitors and identifies the markets for your product or service.
- Market Analysis: Contains detailed research reports concerning your industry, competition and overall market.
- Organization & Management: Outlines your organizational and management structure.
- Service / Product Line: This section details your product or service, including manufacturing information and benefits to the customer.
- Marketing & Sales: Provides details about your marketing and sales strategy.
- Funding Request: This section includes a formal request for funding.
- Financial Projections: These projections help an investor or lender visualize their return on investment.
- Appendix: Contains sensitive information such as bank account numbers, deeds, patents, resumes, phone numbers, tax and credit history. The appendix is not for all eyes, but only used on a need to know basis.
Managing a Plan
It is important to keep a business plan together once completed. Each element relies on the others for supporting information, and having to review separate documents can be confusing. To keep them tidy, have them bound. Staples offers an inexpensive binding service.
Your plan is a living document. As such, review annually or quarterly depending on the business. Due to shifting market trends, competition and changing technology your plan should adjust as needed in a timely manner. Ensure all significant parties are in attendance during review and are providing feedback. Also, when changes are made make sure all concerned parties are notified.