What It Is
A business plan is a roadmap to the life of your business. Components of a well-written business plan include:
- Executive Summary
- Market Analysis
- Company Description
- Organization and Management
- Marketing and Sales Management
- Service or Product Line
- Funding Request
Why It Matters
A business plan is crucial to pitching your business to investors, understanding your emerging business needs, and staying on track when things don’t go perfectly. A well-researched, continually updated business plan can be a tool in communicating your message, developing your business, and evaluating your progress.
If you didn’t start your business with a written business plan, writing a full plan with pro forma financial statements may not be helpful. However, there are a few small steps you can take that will help give your business direction and vision, which will be helpful down the line.
- Write a mission statement. Why does your business exist? What do you DO? What niche are you trying to fill?
- Evaluate your market. Who is your target market? Who are your actual customers? Are these two the same, or are there differences? What do those differences mean for your business?
Engage your management team or other top employees in this process if you can. Getting employees on board with the business plan can be both a training tool as well as a way of generating buy-in.
Nearly all advisors encourage business planning as a worthy discipline. The Small Business Administration provides a business plan template on its website that can help your organization think through many important topics that can help your organization reduce risk and be more successful.
Resources for More Information
- U.S. Small Business Administration: Writing a Business Plan
- U.S. Small Business Administration: Essential Elements of a Good Business Plan
- Inc.com: Starting a Business
- Bplans.com. This site has a wealth of information on business plans and hundreds of examples, but it is also selling a product which we do not necessarily endorse. Occasionally an ad will pop up as you click between pages of various business plans, but you can click ‘Skip This Ad’ at the top of the page to get back to the business plan you were reading.
- My Own Business, Business Plan Checklist
A business plan does not remove all risk from a venture, but is a widely advised and valuable discipline for articulating and testing assumptions. It is a living document to be updated over time, perhaps yearly, as assumptions are tested and strategy changes.