One of the reasons that small businesses fail is due to a lack of planning. Even if you are a “solopreneur,” some sort of business plan is usually a good idea. A business plan can help you better focus your efforts, and stay on track.
Whether your business plan is just to help you stay on target, or whether you are looking for funding from an outside source, here are 10 items to include in your business plan:
1. Mission Statement
Start out with your mission statement. This provides the guiding principles of your company, and shares what you hope to accomplish with your business. It should be brief (no more than a page), and offer insight into what your business is “about.” Not only is a great way for potential funders to see what you offer, it can also help you crystallize the purposes that will drive your business.
2. Executive Summary
Even though this item should come near the beginning in a formal presentation of your business plan, it’s something you should write last. This is a summary of your business plan, and should briefly include the following:
- Overview of the basic goals of the business
- Rundown of business owners and principals
- Quick look at the industry and your target market
- A small mention of what you are looking for in terms of funding
This is just the summary, so great detail isn’t needed. The executive summary just sets the stage.
This section is fairly straightforward. State what you plan to offer, whether it’s a specific product, a range of products, or a service. Make sure you include information on the need for this product or service, and indicate the “why” behind your business is qualified to offer it.
4. Target Market Analysis
Break down your target market. This is helpful for your own purposes, as well as interesting for potential backers. You want to know exactly who you want to impress with your business, and who you hope will be your customers.
5. Marketing Plan
Next, present your marketing plan. When you know your target market, you will have a better idea of how to reach those that populate it. Detail the outlets you plan to use to reach the target market, whether it’s a social media campaign, or a more traditional approach (or both). Know where your target market “hangs out” and share the messages you plan to use to encourage your target demographic to buy from you.
6. Industry Analysis
You should have a plan for differentiating yourself from the competition. The industry analysis breaks down what you know about your industry or sector, and what you understand about the major players. Present a plan for showing how you are different from the rest of the field.
You need an overview of the financial situation of your business. If you plan to self-fund, this can be a great way for you to plan out how you will get your business off the ground. If you are looking for outside help, you need to show that you can handle the costs. Some of the information you need to provide includes:
- Personal financial statements for the business owners
- Balance sheet for the company
- Income statement for the business
- Cash flow statement for the business
This is the area where you really show that you have a crack team. Include the biographies and resumes of the major players in your company. Demonstrate their qualifications. Even if some members of your team aren’t knowledgeable in your specific area, it can help if you can highlight management experience or marketing savvy. Make sure you show that your team has the ability to deliver.
9. What You are Looking For
Now that you have set the stage, it’s time to ask for funds. This section should detail whether you are looking for a loan, or whether you want an investment. You need to show how much money you want, and detail what you will use the money for.
You don’t want to clutter up your business plan presentation with reports and boring documents. All of your supporting information, from marketing research to insurance policies to tax returns to lease agreements go in this section, to back up all of your claims.
With a good business plan, you have a way forward, and you will be more likely to attract the funding that you want.