Writing Your First Business Plan: A Quick Guide
When you decide you are going to start your own company, one of the first steps you must take is to prepare a business plan. This document provides a roadmap for the first several years of your company, highlighting the milestones you hope to achieve and the strategies you will use to get there.
If you plan on seeking funding from third-party investors, you will most likely need to present a business plan as part of your proposal so that they can make an informed decision as to whether your company truly has the potential for success.
The creation of a business plan can be a daunting task for first-time entrepreneurs, but it ultimately sets your fledgling company up for more success. The following are a few of the items you should include in your plan:
Executive summary: The executive summary is a brief overview of your business plan, touching on your company goals and background. It may also summarize the most important elements outlined in your plan. Think of it as a sort of shortened “cover letter.”
Company description: This section contains a description about what your company does, how you are different than your competitors and the specific markets your business will serve.
Market analysis: Investors want to know you have been thorough in your research of your target market before they decide to put money into your business. As such, you should include the research you have conducted on your industry, your competitors and your target customers.
Organizational structure: Provide information on the organizational structure you will use for your business. Examples include sole proprietorship, limited liability company (LLC) and corporation.
Your product(s) or service(s): What exactly will you be selling and how does your product or service benefit your customers? Go in-depth about your product and tell the story of how and why you created it.
Marketing plans: Provide information on how you will market your business and the sales strategies you will use to grow and expand.
Financial projections: Based on your research of your industry and market, along with your confidence in your marketing plan, you should be able to come up with some rough financial projections for your first couple years. This information is crucial for investors, who need to know they are putting their money something that will actually provide them with a return on investment.
Funding requests: Include a section that speaks to your specific funding needs to get your business up and running.
Appendix: If you like, you may include an appendix for additional information that does not fit elsewhere in your business plan. This might include your resume, any permits or leases you might have, your certifications, your training or education and your relevant experience.
With a detailed and organized business plan, you stand a much better chance at impressing potential investors and securing the funding you need to launch or grow your company. You also give yourself tangible guidelines and goals to aim for in the first several years. Make sure you spend an appropriate amount of time on your business plan, as the process could very well have a significant influence on the success and sustainability of your company.