A business plan is necessary in starting a business in that it’s a way to organize the who, what, where, when, why, and how of your business. Writing a business plan can be intimidating to any entrepreneur, but we’ve summarized eight major sections down below:
1. Executive Summary
An executive summary serves as an overview of your business plan. Essentially, an executive summary should include the purpose of your brand, highlight key points, and reveal conclusions from your research. Since the executive summary is the first section of your business plan, it’s crucial in setting the tone for your plan.
2. Mission Statement
A mission statement should be short and precise in answering the who, what, when, where, why, and how of your business. Who do you market towards? What are your products/services? When was your business established? Where are you located or are you an online brand? What is the “why” or purpose behind your brand? How do you fulfill your brands goals and needs? These are all questions that need to be considered in writing your mission statement.
3. Company Background
A company background acts as the introduction of your business in that it includes the basics of your brand. Your company background should define what your business entity is, whether it’s an LLC, sole proprietorship, or an S-corp, any specific locations (if applicable), and an explanation of ownership and any key roles being fulfilled. Additionally, you should touch on the history of your business to further explain the
purpose and inspiration of your brand.
4. Product/Service Description
A product/service description details all of the products and/or services your business offers. It’s a way to emphasize the advantages of your products/services and the ways in which your target audience benefits from each product/service. Furthermore, the cost, product/service life cycle, and any related research should be included as a way to explain each advantage and benefit.
5. Marketing Plan
A marketing plan features the ways you will market your business based on research related to your brand. Your research should touch on each of the 5 P’s of marketing: Product, Price, Promotion, Place, and People. Basically, the 5 P’s serve as the reasoning for your chosen line of marketing through research of your industry, location, target audience, competitors, and etc.
6. SWOT Analysis
A SWOT analysis stands for the strengths, weaknesses, opportunities, and threats of your business. Strengths and weaknesses of a SWOT analysis reflects the performance of your business internally, while opportunities and threats explain your business’ course of action in response to external factors. In other words, the analysis describes how your business compares to your competitors (strengths and weaknesses) and ways to improve and overcome realistic obstacles (opportunities and threats).
The operations section of your business plan will further detail the “how” of your business. Whether you offer a product or service, operations explain the day-to-day functions of your business that allow it to run successfully. Essentially, it’s a walk- through of the process of obtaining inventory and preparing and fulfilling products and services. Details, such as vendors, materials, etc., should be included to further explain the operations of your business.
8. Financial Planning
Lastly, financial planning determines the cost in funding your business and your profit projection. The financial planning section should compose of three parts: income statement, cash flow statement, and balance sheet. The income statement estimates the profit or loss of your business through expected expenses and revenue, the cash flow statement reflects the monthly and quarterly projections of the ending cash balance of your business, and the balance sheet is the overview of the worth of your business based on assets and liabilities.
A business plan requires time and research to compose, so we suggest writing it section by section starting with the mission statement and ending with the executive summary. We hope our WOL Bosses learned a ton from this article and are able to create a business plan of their own with this information.