Business Plan: What is it?

A business plan is a formal document detailing the goals that the business will have. It will also include why these goals are attainable and how they will be met. A business plan may also include background information about the business and the people involved with the company.

 

A business plan should be used by new businesses, and it can also be helpful for existing businesses to re-evaluate their goals and methods. Most business plans will cover the next 3 to 5 years of business, and then they will need to be updated. Investors and shareholders will want to see an updated business plan regularly, so they can assess the company and ensure it is a good investment for them.

Cover Sheet

An effective business plan details how your company will achieve its goals by describing your products or services, your organizational structure, marketing ideas and how your company will distinguish itself from competitors.

Business plans are most often used to attract potential investors, but some companies also use these plans to communicate their culture to employees or to provide compelling reasons for a merger. Although it may seem minor, the business plan cover page can create a powerful first impression that sets the stage for how readers will engage with the document.

• Use Your Company Logo

• Write the Title and Company Name

• Write the Company Address and Date

• Write a Confidentiality Statement

Mission Statement

A mission statement is a sentence or short paragraph that defines the existence of a business, nonprofit, government organization, or any other entity. Mission statements get at the heart of why a company exists, rather than how it exists. In other words, a mission statement isn't a business plan that explains how the entity will turn a profit; it's a statement that defines the motivation for trying to turn a profit in the first place.  It's also important to avoid confusing a mission statement with a vision statement. The difference is that a mission statement focuses on a company’s present state while a vision statement focuses on a company’s future. A mission statement answers the question "Who are we?" and the vision statement answers the question "Where are we going?"

Summary of Your Business' Key Elements

Your business plan should also sum up the background and general structure of your business. Key parts include:

• A description of your business' legal entity

• An overview of your business' assets, including its history from infancy and projections for the future.

• A detailed overview of your products and services.

• Any specifications or plans in regard to your business location.

• A description of your management structure, as well as job titles and descriptions for each key member of personnel.

• Your plans for record-keeping, business, and other insurance policies, and security measures.

Marketing Plan

A marketing plan is an operational document that outlines an advertising strategy that an organization will implement to generate leads and reach its target market. A marketing plan details the outreach and PR campaigns to be undertaken over a period, including how the company will measure the effect of these initiatives. The functions and components of a marketing plan include the following:

• Market research to support pricing decisions and new market entries

• Tailored messaging that targets certain demographics and geographic areas

• Platform selection for product and service promotion—digital, radio, Internet, trade magazines, and the mix of those platforms for each campaign

• Metrics that measure the results of marketing efforts and their reporting timelines

A marketing plan is based on a company’s overall marketing strategy.

Financial Overview

Please understand that this is the most important part of the business plan. Most investors will go directly to this section of the business plan and will pay special attention on how well you have projected your business financially. To the numbers match up to your goals and do they make fiscal sense. Use your accountant to assist you with the financial section of the business plan as it is the most important section of the plan.

• Sum up your business' financial requirements.

• Provide a statement describing your funding sources and how you intend to apply said funds.

• Describe your budget.

• Provide a three-year income projection and a break-even analysis graph.

• Provide statements reflecting past performance if available.

• Provide a balance sheet and conclude in this section with a summary.

• Run accurate financial projections

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