Writing a Business Plan: What You Should Know

Think of a business plan as a road map for your organization, which defines its goals and objectives and explains how the business will meet those goals. It’s a comprehensive document that covers operations, finances and marketing strategies.

A business plan is a living document. It should grow and evolve along with your company. Your business plan helps shape your company’s growth strategies, but it must also adapt as you learn real-world corporate lessons and fine-tune your organizational objectives.

Technically, there are many different types of business plans designed for various purposes. A few of these include:

Since your business plan is the roadmap that guides your business, it is advisable to have one at your fingertips when making key corporate decisions. Particular situations that typically demand a business plan include:

Writing a business plan is both an art and a science. At one time, business plans were highly formalized documents. Today, they can be a bit more casual, though it remains important to make sure you follow the traditional format. Carefully edit and proofread to make sure your plan is the best it can be. According to the United States Small Business Administration (SBA), these are the sections included in a typical start-up or strategic business plan:

Although this is the first section, consider writing it last. The executive summary briefly describes the company’s mission, core product or service, location, management team and employees. It should also include top-level financial data.

This section lays out the benefits that your company brings to the market, its target audience and its unique competitive advantages. This is the best place to brag about what makes your company a strong addition to the marketplace.

Here you will go deeper into your target market, as well as your competitors. What does the existing market look like? What are companies doing currently to solve the problems you have identified? What works and what doesn’t? What can you do better than your competition?

This section lays out your company’s legal and operational structure. Is it a sole proprietorship? A partnership? An LLC, a C corporation or an S corporation? Who is in charge of which departments? Drawing an organizational chart can help potential investors or partners visualize how your company operates. Include resumes or a brief description of each key leader’s strengths and experience.

Go into detail about exactly what your core product or service is. Explain the product lifecycle. Talk about the benefits. If you hold a patent or a copyright, include a copy. If you are working on research and development, discuss that process and the results you hope to achieve.

This section describes your plans for attracting and keeping customers. Advertising is a part of marketing, and it’s fine to include some advertising strategies here. But marketing also includes tools such as public relations, media planning, sales techniques and even customer support, which you can learn about with a specialization in sales and marketing. The clearer you can make your marketing plan, the more helpful it will be.

If you are seeking venture capital or other funding, this is the place to describe your request. Spell out how much money you need for the next five years and what you plan to do with it. Also, decide whether you want a loan or an investment based on equity and the terms you are looking for.

These are an important part of your business plan, so create a detailed financial plan for the next five years, including projected income statements, cash flow statements and balance sheets. If you have an established business, include copies of these documents for the past three to five years. Adding charts and graphs can help draw a clearer picture of your company’s finances. Learn about these concepts with a bachelor's degree specialization in finance.

This is the place to attach any supporting documents or extra materials, such as permits, licenses, contracts or letters of reference.