A business plan is an essential first step to the startup of every small business. It is the key indicator as to whether or not you should actually undertake to start the business or perhaps pass on the idea. But if things look good after all the research, analysis, and completing the business plan, the results could be amazing. I can guarantee that in order to have a great business start, you will need help writing a business plan!
A business plan is a collection of ideas that will summarize your new business idea. But, it is not just for your use! If your new business requires a loan then the lending institution may require a copy of that plan before they will give you the money. Your business plan may also be needed for review in strategic partnerships, for possible investors, and perhaps others who might consider making a deal with you. Kind of like the Shark Tank!
Now, for a small business like an RV inspection business model, the business plan may go no further than your desk, and will eventually wind up in a desk drawer, but it will be the document that will lead to the yes or no of deciding to actually move forward. Why is that? Well, because the small investment to start an RV inspection business can be handled with consumer credit or current cash on hand.
Once the business plan has served its purpose, whether, for a large or small undertaking, the strategic plan and marketing plan that is created in the writing of the business plan will stick with you for the life of the business. These two documents are the rudder that steers the ship to its ever-changing destination. Without them, the new business will lake the focus required to move forward on a daily basis.
These two documents will help to drive your new business forward each day. The strategic plan is the timeline for tasks to be completed for the business. The marketing plan sets goals for the business to bring in customers on a daily basis and the sales that these people will create. Without sales, there is no business, just a good idea.
Here are some of the sections that you need when writing a business plan. There may be additional sections that your business model may require, but these would be considered the basis for a good business plan:
- Cover, Title Page, and Table of Contents
- Executive Summary
- Market Analysis
- Organization and Management
- Marketing and Sales Strategies
- Service or Product Mix
Cover, Title Page, and Table of Contents
The cover and the title page are the way to start to show off your business. You want to make it pretty by showing off your logo on the front page. That along with your business name, owners names, and the date of creation make for a good start to the intro of your company.
The table of contents will help the reader in locating specific sections in your business plan. These lists of the included subjects should just be the section titles and not include descriptions. That will come inside each section.
The executive summary is a very specific overview of the entire business plan with a history of the company. It tells the reader where things are now and where they are going. It should grab the reader right from the start and describe why this business idea will be successful.
Some professional writers who help write a business plan say that this section, even though included at the start of the business plan should be written last. Why does that make sense? Well, after having created the whole plan it is much easier to create a concise summary of the entire business idea. Just a thought.
What are some things this section would include:
- A mission statement that explains the focus of your business. It may be a short description or it may be a paragraph. It depends on the business model. It should leave the reader with a clear idea of what the new business is about. Some experts say that this is a lot of information to include here and is best covered elsewhere in the business plan. It can be included in both, perhaps restated differently.
- The names of the owners and their positions in the company.
- If the business is already underway, a brief summary of the business as it is currently operating: hours of operation, sales, employees, etc.
- A location of the business and any assets, equipment, facilities needed to get started.
- What products and services the new business will provide.
- A summary of the marketing plan.
- A summary of the business’s future plans and a timeline for the business launch.
- A summary of the owner’s experience and background and the owner’s reasons for the business launch.
This section will show your knowledge about the industry your business is targeting. It should show highlights of your market analysis and conclusions of the data that was collected during the business research phase. The details of all this will be placed in the appendix listed as the Business Market Analysis.
Organization and Management
This section will include your businesses organizational structure, information about the owners of the company, profiles of the team, and the owner’s qualifications. If there is a deep organizational team than information about a board of directors might also be needed.
Details would include things like backgrounds of all involved, responsibilities, if any business departments what functions they have, salaries and benefit packages, employee incentives, and how will promotions be handled. These could be some of the things discussed in this section.
Marketing and Sales Strategies
This is the framework of what will become the Marketing Plan for the business. It will be used on a daily, weekly, and monthly basis to steer the company forward in its efforts to secure customers. This should list every possible effort that will be used to attract customers to the business. Somewhere in here, a marketing budget should be considered.
Some key areas of a good Marketing Plan would include information about internal procedures, public relations, technology, signage and marketing materials, and media. It each marketing strategy that is discussed it should also include information about its purpose, the goal of the strategy, and its budget.
Service or Product Mix
What is being sold by the business? This section will describe your product or service describing the benefits of these to the potential customer. It should also focus on the areas where the companies offerings have a big advantage over the competition. There would also be a discussion as to the niche that the products and services fit into that are not currently being offered in the marketplace.
The idea here is to give the reader the reasons why people would be willing to pay for the new businesses products and services. List those here and provide details about the suppliers, availability, and the wholesale costs. There could also be a discussion of new products and services that will come as the business grows.
A lot more details about the product or service could also be included, the products life cycle, any copyrights, patents, any possible trade secrets, and if there are any research and development activities that are underway.
Once the market analysis has been done and clear objectives are set, then resources can be allocated to achieve those goals. These are some items that should be included as part of the financial statement of the business plan:
- Historical financial data if any, but not too detailed. That could be placed in the appendix and included if asked for.
- Prospective financial data: You need to create a five-year plan of what the business will be able to do. I will have a source for you at the end of this article to help you with these sections.
- Projections of funding requests that match the financial needs of the business.
- Ratio and trend analysis for all the financial statements with graphs to assist.
The appendix could have items that are required on an as-needed basis. Some people reviewing the plan might want to see more than others. This section is a great place to have these items. There may be things you want to include in the main body of the plan but are not applicable to every audience. Therefore, this is a great place to have these items within easy access:
- Credit history (business and personal)
- Resumes of key personnel
- Product pictures
- Letters of reference
- Details of the market studies
- Relevant articles or books
- Licenses, permits, or patents
- Legal documents
- Copies of leases
- Building permits
- Business consultants, attornies, and accountant contact information
If you are able to find a trusted source, having the business plan reviewed by a trusted friend or business mentor could be of value once the plan is completed. If you can get friends and family to give you anonymous feedback that could also be useful. Don’t take this to personal as this is business and some may be less than encouraging, but the feedback could be useful.
Don’t give up on your dreams! Don’t let your paradigms that you may be fighting keep you from moving forward. Don’t let FEAR, False Evidence Appearing Real, stop you! A good business plan will give you the confidence to either move forward or modify the idea to make it a winner!
Use the free resources at the sba.gov website to create a winning business plan! All the recommended sections will be available to you and assistance is provided in case you need it.