10 STEPS TO CREATE
YOUR BUSINESS PLAN
You started a business, and it’s doing well only two years in. Now it’s time to expand, and you’re going to need funding to assist you in your growth aspirations. There are many paths to take for business growth, and you’ll need to articulate it in a business plan. The typical business plan is comprehensive and time-consuming. Beginning with research, there’s an inordinate amount of work and effort in preparing your business idea(s) for growth to your audience. However, when completed, it’s a work of art. You’ll customize it to captivate your audience so that when they assess and analyze it, they are comfortable with making an informed decision on your funding request.
Your business plan is a navigation tool; it’s essentially a GPS for your business, and it’s important to clarify the best path forward for expanding. The content of your business plan involve critical thinking on your part, including facts, trends, and details that you’ll want to include to support your request for funding. Depending on the audience for your pitch, you’ll want to create your presentation accordingly.
Preparing a business plan is daunting. Take heart; there are some wonderful organizations available, such as SCORE and the Small Business Association (SBA), that provide mentoring and will help you bring your plan to fruition. A project of this magnitude takes an incredible amount of time and patience. Prepare yourself psychologically for a deep dive into the current health and future growth of your business.
When Do You Require a Business Plan?
- When applying for a business loan from a bank or through the Small Business Administration (SBA)
- When petitioning investors and members of the board
- When requesting commercial space for rent
What Resources Are Available to Help You Prepare a Business Plan?
There is a prescribed format for preparing a business plan, and writing one is a lofty undertaking. The good news is that there are many resources available to help you in the preparation. One that I highly recommend is the SCORE organization. They not only have a fabulous website filled with excellent business advice, but they have business plan templates and mentors available to help with writing the business plan. You can find these resources here.
Not to be forgotten is the large assortment of generic business plan templates that are right at your fingertips within the Microsoft Office platform. See what’s available here. Google has one that I’ve found online at this website.
Another great resource is the Small Business Association (SBA). The SBA is a federal government agency that has been in existence since 1953. According to Wikipedia, the agency’s activities have been summarized as the “3 Cs” of capital, contracts, and counseling. They are recognized for their loan programs, entrepreneurial development programs, and their educational centers throughout the United States.
For business-related particulars that are ambiguous, there’s a wealth of alphabetized information at the bottom of this website, which I highly recommend to help guide you with preparing your business plan. For example, you can click on “marketing plan,” and the link will inform you of all the elements to include in your marketing plan. If you need help with preparing your company’s strengths, weaknesses, opportunities, and threats (SWOT) analysis, the link provided will explain how to go about it, and you can also use the one that I prepared, which provides an extensive list of important elements for you to consider. Vitally important are Excel spreadsheets for your financials. They are available along with simplified instructions for developing a distinctive mission statement and persuasive value proposition that’ll attract customers, and convince lenders or investors that you are highly informed about your business operation and its growth trajectory.
Last, but not least, is Savvy Swan Communication and Marketing—that’s my operation! We can prepare your business plan from start to finish. Perhaps you need us only for specific sections. Please ask. We can formulate your marketing plan or create your SWOT after we do the marketing research. For a beautifully polished and impressive business plan, we’ll include graphic design features to help your tables, graphs, charts, and other important components stand out. Please fill out the contact form on our website.
What Is the General Format of a Business Plan?
A business plan follows a structured framework. The main sections of the business plan are as follows:
1. Title Page/Cover
This page has all the relevant information that identifies your business, including your registered business name, its physical address, and the company logo. It also displays the owner’s email contact information and the date of submittal.
2. Table of Contents
The table of contents details all the sections of your business plan. It is best to hyperlink all the business plan sections so that the reader can go straight to the section they want to peruse.
3. Executive Summary
The executive summary is a synopsis of all the sections of your business plan. Investors and bankers will often read it first to glean the substance of your business plan. The general rule of thumb is that the executive summary should be written last to provide a panoramic view of all the prevalent details contained within the business plan. Although the executive summary is an overview, it should be clear, concise, and compelling for the reader. Two pages in length is the customary standard.
4. Company Overview
The company overview is a window into your company and covers some basic details about your company that appeal to your audience. You need to draw the reader in, so use this section to add personality and intrigue about your amazing company! Structure the overview with a few sentences for each main topic. Introduce your company’s owner(s), the management team, and key roles. It’s important to include your registered business name, your company’s physical location and its business structure, that is, whether it’s a sole proprietorship, corporation, or alternative option. How does your company shine? Revel in its strengths. What makes it unique? When was it established, and what’s significant about its history? What’s the company culture like? Definitely include your company’s mission statement. What products or services does your company provide? What types of problems does your company solve for customers? Who are the customers you serve? What are the future goals for the company? Share your company’s vision statement when discussing future goals. Discuss the purpose of the business plan. Are you seeking start-up funds as a new business launch, or are you planning to expand by scaling the business? Briefly state your intention.
5. Industry, Market, Competitor, and Customer Analyses
This section of your business plan contains extensive primary and secondary research. It is an arduous task, but it provides in-depth insight of your business goals and reinforces your business planning decisions. You can find everything that you need for this analyses section of your business plan in this marketing cookbook, a 64-page free download from SCORE.
While this section of your business plan is painstakingly detailed, it furnishes your investors, bankers, or lenders with solid information that bolsters confidence in your request for funding, and it affirms your keen understanding of market and customer demand.
Pack this section with primary and secondary research sources and statistics to validate your credibility. Primary research is direct research, happening in the moment based on customer observations, and comprises contemporaneous questionnaires and surveys. This is expensive research to conduct. Primary sources of research in business come from annual reports, SEC filings, 10K reports, news releases, legal documents, interviews, blogs, press releases, tweets, corporate policies and codes, financial statements, promotional materials, meeting minutes, and market surveys. The Small Business Association has an excellent list of market research and competitor analysis resource links that you can access free. Primary research, because it’s costly and time-consuming, is usually avoided in favor of secondary sources of information. Secondary research draws on information provided from syndicated third parties, such as investment banks, industry associations, organizations, and company websites, among others. Practical ecommerce.com has a variety of research links available for secondary research, and I recommend the comprehensive list of research links found here.
a) Industry Analysis
The most effective tool for assessing an industry was created by the famed business strategy leader and author Michael E. Porter, Harvard University. He states that all industries and markets are influenced by five forces. MindTools is a good resource with which you can learn more about Porter’s Five Forces, and there are excellent internet templates available to analyze these forces and include in your business plan. I recommend the bevy of free templates available from Stretechi.com to delve into your industry analysis.
b) Market Analysis
Investors and bankers must understand your business to make a determination about your funding request. Market analysis that you have thoroughly researched provides bankers and investors with information about the industry as well as the markets in which you compete. Garner substantial information about your competitors in preparation for your competitor analysis. Much of this information is accessible in their respective websites, and there is a wealth of information available in online press releases and trade periodicals that describe their latest innovations or the types of markets they plan to enter. The website Toolsrush.com has a good list of research links for preparing your market analysis.
Include statistical information about your target market’s size, demographics, and consumer behavior. Your market analysis should be brimming with information about market demand and the potential to enter new or untapped market opportunities that you’ve outlined in your company’s SWOT analysis. Visit my earlier blog here for a sample of what to include in a SWOT analysis.
c) Competitor Analysis
Collect substantial information about your competitors from their respective websites; on sites such as Yelp, Hoovers, Dun and Bradstreet; in press releases, trade directories and magazine articles; and in social media. Set up Google alerts to send you an email when one of your competitors is mentioned in the media. On Facebook, you can discreetly set up “watch pages” on your competitors’ posts in the Facebook Insights section. Learn more about it from Social Media Examiner. The competitor analysis highlights the strengths and weaknesses of competitors within your market. After you perform an analysis of their strengths and weaknesses, exploit their weaknesses and develop barriers to prevent these rival firms from entering new or untapped markets. Be sure to analyze direct and indirect competitors as well as possible new entrants that compete in some of the same horizontal markets with you. They can potentially become fierce competitors in new markets that you wish to enter. Create your competitor analysis by checking out the numerous free online templates from Templatelab.com. Buffer.com, also has great templates and there are links that tell you exactly where to go to extract all the available research needed to produce an awesome competitor analysis. Select one to include in your business plan.
d) Customer Analysis
Your customer analysis section involves segmentation of typical customers you currently serve or plan to serve in the future. The information that you analyze has to demonstrate customer interest in your product or service in that it solves a problem or satisfies a desire or need. Your product or service may fulfill different needs or desires for different segments of customers, and many companies create buyer personas to get a better picture of the customers that they serve. Read and learn more about personas at usertesting.com. Customer segmentation starts with identifying the customer characteristics of your current and potential customer segments and analyzes the demand. Evaluate your customers by demographic characteristics. For individual customers, identify them by age, generation class, race, sex, ethnicity, geography, income level, education, social-economic background, family background, preferences, and trends. For businesses that you serve or plan to serve in the future, identify their characteristics by size, revenue, legal structure, capitalization, competitive status in the market, growth rate, business strategy, and any other information that illustrates the level of demand. Go to page 5 in the SCORE marketing cookbook to help you with your customer—target market—analysis, and visit PennState Extension to read and learn more about customer segmentation.
6. Marketing Plan and Sales Plan
The marketing plan describes the marketing mix in terms of the 7 Ps, which are 1) product, 2) price, 3) place, and 4) promotional channels through which it sells goods and services. Additionally there are 5) people, 6) processes, and 7) physical evidence that relate to the interaction that customers experience when encountering your business, whether online, on the phone, or in its physical space. Your annual marketing plan essentially includes the competitor analysis that you’ve created separately and your company’s brand positioning. It also details your company’s marketing goals, advertising and promotional activities, pricing strategy, marketing tactics, and marketing budget, among other detailed information. Visit Go Daddy to help you create your marketing plan. Of course, you can refer to the SCORE marketing cookbook (above) and visit the SBA website to lead you through the full business planning process (or you can contact us)! We write business plans and perform research, too.
Sometimes the marketing and sales efforts intersect and contain similar information. Ideally, the sales plan highlights the company’s unique selling proposition and details how the company plans to sell products to its target market, the distribution methods in which it will sell products, and the type of after-sales support or services it offers to customers, among other detailed sales strategies that you’ll use. Pipedrive.com has an excellent template and explanation of what’s important to include in your company’s sales plan.
7. Operations Strategy
Your company’s operations strategy revolves around your company’s core business processes and its value chain. This section of your business plan should be highly comprehensive in describing how you create value for your customers. The idea of a value chain was pioneered by American business strategist Michael Porter. He provides a value chain method and a strategic tool that companies can use to perform this analysis. You can learn more about the value chain at this website (Investopedia.com), and from Harvard Business School. If companies find cost efficiencies in their value chain, they maximize value for their customers. This interactive tool helps you perform the value-chain analysis to include in your business plan, and there’s an in-depth look at what to include in your operations strategy here. Find a road map for formulating a value-chain analysis at the Simplicable.com website, too.
From a business management perspective, you should routinely look for opportunities to add value to your business through capacity of production, product development, market penetration, customer engagement, and supply chain, among other strategies that correspond to the opportunities highlighted in your SWOT analysis. Ultimately, you need to satisfy your customers; thus, special warehouses, equipment, and physical requirements (such as office space, machinery, labor, supplies) and inventory are of importance in meeting their needs. Other considerations are product line expansion, procurement, and logistics. Your operations strategy affects your company’s bottom line; therefore, effective processes and procedures are routinely scrutinized for efficiencies.
Also included in your operations strategy is your company’s value proposition, which helps differentiate your brand from competitors. A strong value proposition maximizes your company’s competitive advantage and its revenues. By continuing to create value for your customers, you sell more products or services and over time gain loyalists. Profits soar when your customers are happy.
8. Financial Documents
The financial documents are an important section in the business plan that demonstrates the financial viability of your business. These documents are often a bellwether for determining whether the business will receive the financing required from financial institutions, investors, or venture capitalists. Financial documents should demonstrate that your business is able to meet its financial obligations. The income statement, balance sheet, and cash flow statements, along with tax filings, determine the health of your company’s ability to repay a loan. Be sure to include financial documents from the last few months and the aging report.
9. Funding Request
In this section of your business plan, outline your funding requirements. Clearly explain how much funding you’re seeking, and specify whether you need the funds for future expansion, buy equipment or materials, pay salaries, or cover specific bills until revenue increases.
10. Appendices and Exhibits
The appendices and exhibits is the last section of a business plan. It includes tables, graphs, charts, floor or building plans, and any additional information that banks and investors may be interested in. Some of the information that may be included comprise lengthy or detailed market research, products/services offering information, marketing brochures, and credit histories.
We are business plan specialists. We help with preparing your business plan in its entirety, or we can prepare portions of it at your request. Contact us today!
Patti Kondel, CEO of Savvy Swan Communication and Marketing, has an MBA from the University of Massachusetts, Lowell, and an MA from Emerson College, Boston. Patti is a business and marketing strategist, brand booster, arts lover, yoga practitioner, content creator, and cookie connoisseur (the sweet variety—as well as internet cookies for marketing consumption). Let me help you trumpet your business to the world by contacting me today!
Savvy Swan Communication and Marketing is available for business opportunities around the globe. We also welcome related news, article submissions, and helpful blog post tips from our community. If you’re interested in submitting compatible content, please email info@savvyswan.com.