How to Create a Business Plan

Background Information

The initial questions in our form builder will help you discuss how your company has managed up to the present day. It is not a problem if your company is just getting its feet under itself and has no history yet. This is your chance to define the company’s mission, goals, and objectives. You will also identify the owners and any members of the management team and what their roles and general responsibilities encompass.

Confidentiality

Since this is not a legal contract, it is not necessary for you or those who read it to sign it. However, if you choose to include a confidentiality provision, then those who read it should sign where indicated on the last page. Since your business plan likely includes your proprietary business ideas, insights, and techniques, it is recommended that you include the confidentiality provision. This will prohibit those who sign it from disclosing, copying, reproducing, or distributing your confidential information.

If multiple people will read it, you can print out multiple copies of the last page or simply have them sign, print, and date under the signature space provided.

Products and Services

Moving into the questions regarding your products and services, you will notice that our form builder allows you to specify whether:

• your company provides physical products, such as with book stores and wineries;
• you provide a service, such as with marketing and accounting firms; or
• you provide both products and services, such as with restaurants and repair shops.

You will be prompted to provide both a general description and a more detailed discussion of your offerings.

Industry Status

Here you have the chance to provide an overview of the specific industry in which you will compete, the company’s target markets, key factors affecting the industry (national or local economy, population, weather, employment levels, etc.), seasonal variables, the legal environment, and intellectual property rights. These are some of the topics for which—as mentioned above—some people have trouble knowing what details to include. We’ve made sure to provide examples and suggestions of information for you to include each step of the way.

Marketing Analysis

The questions dealing with your marketing analysis help you dive into the specifics regarding your main competition and how your company plans to position itself in its market. Easily include the details of any:

• planned marketing campaigns,
• planned product mix,
• strategies for beating out the competition, and
• geographic marketing territory.

Also, explain how your prices will work and any related pricing policies. You can even choose to include a SWOT analysis. These are common in business plans and help you identify the company’s strategic strengths, weaknesses, opportunities, and threats. Including this will tell potential investors and partners that you have considered your business’s potential obstacles ahead of time and have well-thought and objective solutions.

Production and Quality Assurance Strategies

This section deals with how and where the company will provide its products or services, its production and servicing techniques, and its quality control plan. You will also include the specifics of your personnel requirements, inventory management plan, and current or planned suppliers and vendors. This will help show the feasibility of your plan to meet demand and why your products or services will be able to win out in the marketplace.

Financial Projections

This section is arguably the most important section of your plan. Any potential investors or business partners will want to see that not only do you have a good marketing and operations plan, but that your business will be successful when it comes to the bottom line. You will be prompted for the basic forecasted expenses, gross revenue, and net profit for years one and three. You will also indicate when your company is projected to break even (recover its initial investment) and what the return on investment (ROI) will be for any investors.

It is best to also attach financial statements to your business plan when others read it (see below).

Attachments

There are many potential documents you can attach to your business plan to make it more insightful for those who read it. At a minimum, you should include the three basic financial statements every business should have before launching a plan:

• An income statement (also known as a profit and loss statement)
• A balance sheet
• A cash flow statement

If you do not have these already or do not know exactly how to complete them, then there are many helpful online tutorials that will simplify the process for you.

The income statement is usually done as a forecast for the first 12 months of operation, but if your company is already operating, you could do it for the past 12 months. Likewise, the cash flow statement is usually done as a future projection. The balance sheet is normally completed as a projection for the company's assets, liabilities, and equity as of opening day. Some business people also opt to include a three-year profit projection and a break-even analysis.

Lastly, it may be a good idea to include the personal financial statements of the owners. Banks and investors often will want to see these since owners often have to invest or pledge their personal assets as equity or guarantees for the business.

Additionally, it is common for business people to include some or all of the following documents, if available:

• Equipment and inventory lists
• Leases and other contracts
• Letters of support
• Resumes of management and key staff
• An organizational hierarchy chart
• Industry studies
• Market research
• Advertising materials
• Maps
• Photos
• Blueprints

Executive Summary

Although the executive summary will be the first thing people read on your business plan, it is best for it to be the last part you draft when creating it. We left it for last so that you can have all your prior answers at the front of your mind when writing. Since this is your first chance to make a good impression on the reader, you will want to write in a way so as to create a lasting impact on the reader.

In a compelling way, tell the reader what problem, need, or opportunity currently exists in the market that your company can meet or exploit. Explain how your company will accomplish this using the most relevant details from the other sections you have already included. With persistence and a little luck, your business plan will get into the right hands to help you take your company to the next level!

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