Many people think of a business plan as a formal document required only when a company is trying to secure funding. But business plans can serve other valuable purposes for small businesses that are not presently courting investors or lenders.
The U.S. Small Business Administration suggests that a business plan serves as a valuable planning, communication, and management tool that can help drive the success of your business.
Going through the process of creating a business plan can help a company get organized and plan the companys direction, possibly bringing to light potential problems requiring alternative courses of action. A business plan can help a company and its employees focus on specific goals and objectives, allowing management to monitor and evaluate projections against actual results. Business plans can also be written for the purpose of attracting potential business partners or new employees. All small businesses, from startups to established family-run companies, can benefit from creating and following a business plan.
What’s Included in a Business Plan?
Business plans vary in length and depth of content, depending on the type of business, the company’s current stage of development, and the documents purpose. Typically, formal business plans for the purpose of attracting investors or lenders range from 10-30 pages in length, but a complex plan can be over 100 pages. Following, are the main components of a business plan and a brief description of what might be included in each section:
Executive Summary
A summary of the entire plan, which is complete, concise and engaging; usually 1-2 pages long.
Business Description
A mission statement that gives objectives, company overview, history, and industry overview.
Strategy
Explains the overall business strategy, company strengths, company weaknesses, strategy implementation.
Marketing and Sales Activities
Explain the marketing strategy, distribution, sales and advertising, publicity, tradeshows.
Operations Production
Reviews the facilities, customer service, delivery, legal issues, suppliers, partners.
Management and Organization
Explains the management team, organization chart, job descriptions and advisors.
Financials and Expenses
Show the profit-loss projection, balance sheet, cash flow, break-even analysis, assumptions.
Appendix
Provides all other legal documents, resumes, photographs, suppliers, financial statements, etc.
Helpful Resources
As you embark on developing your business plan, it may be helpful to obtain a book about the subject to guide you through the process.
There are also numerous websites about creating business plans with general information, “how-to’s”, and sample plans:
U.S. Small Business Administration
The SCORE Association
Business plan templates found in word processing programs, in business software, on websites, or in books can also be a useful resource to help you get started.
If you have further questions, please feel free to contact us.