BUSINESS PLANS: A STEP-BY-STEP GUIDE

This guide to writing a business plan will outline the most important parts and what should be included in an
effective plan.

A business plan is a written description of your business's future, a document that tells what you plan to do
and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business
strategy, you've written a plan, or at least the germ of a plan.

Write Your Business Plan

1. Executive Summary. Your executive summary is a snapshot of your business plan as a whole and touches
on your company profile and goals. ...
2. Company Description. ...
3. Market Analysis. ...
4. Organization & Management. ...
5. Service or Product Line. ...
6. Marketing & Sales. ...
7. Funding Request. ...
8. Financial Projections.

Business plans are inherently strategic. You start here, today, with certain resources and abilities. You want
to get to a there, a point in the future (usually three to five years out) at which time your business will have
a different set of resources and abilities as well as greater profitability and increased assets. Your plan
shows how you will get from here to there.

Before Writing Your Plan

How Long Should Your Plan Be?
When Should You Write It?
Who Needs A Business Plan?
Why Should You Write A Business Plan?
Determine Your Goals and Objectives
Outline Your Financing Needs
Plan What You'll Do With Your Plan
Don't Forget About Marketing

Write Your Business Plan

A business plan is an essential roadmap for business success. This living document generally projects 3-5
years ahead and outlines the route a company intends to take to grow revenues.
Executive Summary
Your executive summary is a snapshot of your business plan as a whole and touches on your company
profile and goals. Read these tips about what to include.
Company Description
Your company description provides information on what you do, what differentiates your business from
others, and the markets your business serves.
Market Analysis
 Before launching your business, it is essential for you to research your business industry, market and
competitors.
Organization & Management
Every business is structured differently. Find out the best organization and management structure for
your business.
Service or Product Line
What do you sell? How does it benefit your customers? What is the product lifecycle? Get tips on how
to tell the story about your product or service.
Marketing & Sales
How do you plan to market your business? What is your sales strategy? Read more about how to
include this information in your plan.
Funding Request
If you are seeking funding for your business, find out about the necessary information you should
include in your plan.
Financial Projections
If you need funding, providing financial projections to back up your request is critical. Find out what
information you need to include in your financial projections for your small business.
Appendix
An appendix is optional, but a useful place to include information such as resumes, permits and leases.
Find additional information you should include in your appendix.
How to Make Your Business Plan Stand Out
What makes your business unique? Determining this could help you stand out from the crowd and give
you advantages over your competitors.
 7 Steps to a Perfectly Written
Business Plan
Every business needs to have a written business plan. Whether its to provide direction
or attract investors, a business plan is vital for the success for your organization. But,
how do you write a business plan?

SBA.gov recommends that a business plan includes;

Executive summary - a snapshot of your business.
Company description - describes what you do.
Market analysis - research on your industry, market, and competitors.
Organization and management - your business and management structure.
Service or product - the products or services youre offering.
Marketing and sales - how youll market your business and your sales strategy.
Funding request - how much money youll need for next 3 to 5 years.
Financial projections - supply information like balance sheets.
Appendix- an optional section that includes rsums and permits.

However, getting started can be difficult to do. So, heres a seven steps in writing a
perfect business plan.
1. Research, research, research.
Research and analyze your product, your market and your objective
expertise, writes Bill Pirraglia, a former senior financial and management executive.
Consider spending twice as much time researching, evaluating and thinking as you
spend actually writing the business plan.
To write the perfect plan, you must know your company, your product, your
competition and the market intimately.
In other words, its your responsibility to know everything you can about your business
and the industry that youre entering. Read everything you can about your industry and
talk to your audience.

2. Determine the purpose of your plan.

A business plan, as defined by Entrepreneur, is a written document describing the
nature of the business, the sales and marketing strategy, and the financial background,
and containing a projected profit and loss statement. However, your business plan can
serve several different purposes.
As Entrepreneur notes, its also a road map that provides directions so a business can
plan its future and helps it avoid bumps in the road. Thats important to keep in mind if
youre self-funding or bootstrapping your business. But, if you want to attract investors,
then your plan will have a different purpose and youll have to write your plan that
targets them so it will have to be as clear and concise as possible. When you define your
plan, make sure you have defined these goals personally as well.
3. Create a company profile.
Your company profile includes the history of your organization, what products or
services you offer, your target market and audience, your resources, how youre going to
solve a problem, and what makes your business unique. When I crafted my company
profile, I put this on our about page.
Company profiles are often found on the companys official website and are used to
attract possible customers and talent. However, your profile can be used to describe
your company in your business plan. Its not only an essential component of your
business plan, its also one of the first written parts of the plan.
Having your profile in place makes this step a whole lot easier to compose.

4. Document all aspects of your business.

Investors want to make sure that your business is going to make them money. Because
of this expectation, investors want to know everything about your business. To help with
this process, document everything from your expenses, cash flow, and industry
projections. Also dont forget seemingly minor details like your location strategy and
licensing agreements.

5. Have a strategic marketing plan in place.

A great business plan will always include a strategic and aggressive marketing plan. This
typically includes achieving marketing objectives like;
Introduce new products
Extend or regain market for existing product
Enter new territories for the company
Boost sales in a particular product, market or price range. Where will this business
come from? Be specific.
Cross-sell (or bundle) one product with another
Enter into long-term contracts with desirable clients
Raise prices without cutting into sales figures
Refine a product
Have a content marketing strategy
Enhance manufacturing/product delivery
Each marketing objective should have several goals (subsets of objectives) and tactics
for achieving those goals, states Entrepreneur.
In the objectives section of your marketing plan, you focus on the what and the why
of the marketing tasks for the year ahead. In the implementation section, you focus on
the practical, sweat-and-calluses areas of who, where, when and how. This is life in the
marketing trenches.
Of course, achieving marketing objectives will have costs. Your marketing plan needs to
have a section in which you allocate budgets for each activity planned. It would be
beneficial for you to create separate budgets for for internal hours (staff time) and
external costs (out-of-pocket expenses).

6. Make it adaptable based on your audience.

The potential readers of a business plan are a varied bunch, ranging from bankers and
venture capitalists to employees, states Entrepreneur. Although this is a diverse
group, it is a finite one. And each type of reader does have certain typical interests. If
you know these interests up front, you can be sure to take them into account when
preparing a plan for that particular audience.
For example, bankers will be more interested in balance sheets and cash-flow
statements, while venture capitalists are looking at the basic business concept and your
management team. The manager on your team, however, will be using the plan to
remind themselves of objectives.
Because of this, make sure that your plan can be modified depending on the audience
reading your plan. However, keep these alterations limited from one plan to another.
This means when sharing financial projections, keep that data the same across the
board.

7. Explain why you care.

Whether youre sharing your plan with an investor, customer, or team member, your
plan needs to show that youre passionate, dedicated, and actually care about your
business and the plan. You could discuss the mistakes that you've learned, the problems
that youre hoping to solve, listing your values, and what makes you stand out from the
competition.
When I started my payments company, I set out to conquer the world. I wanted to
change the way payments were made and make it easier for anyone, anywhere in the
world to pay anyone with little to no fees. I explained why I wanted to build this. My
passion shows through everything I do.
By explaining why you care about your business creates an emotional connection with
others so that theyll support your organization going forward.
 A Simple, Step by Step Guide For Business
Planning
We have plenty of in-depth articles here on Bplans about business planning, for
example: why you should plan, what kind of plan you need, and how to prepare a formal
business plan document. But, what weve been missing, until now, is a simple step-by-
step summary of the business planning process to get you going and give you an
overview of the core steps you need to take to ensure you are taking advantage of
everything a good planning process has to offer.
Business planning is simple and so worthwhile that a straight-forward guide was in
order to help you through the basics. So, instead of a several-thousand word article on
the topic, heres a simple checklist you can follow to kick start your planning process:

1. Start with a pitch to outline your strategy and the basic concept for your business.
Do this quickly and keep it simple. This isnt your investor pitch (yet), but more like a
simple one-page business plan. Really its just a sketch of your business concept. Your
pitch should include your key value proposition, an overview of the problem you are
solving, your solution to the problem, a description of your ideal customers, and an
overview of the competitive landscape. For more details, check out our guide to
creating the perfect pitch.
2. Validate the assumptions in your pitch. Does the problem you think you are
solving actually exist? Does your target market like your proposed solution? Do you
have enough potential customers who are willing to pay for your solution to make a
real business? As you test and validate your assumptions, update the pitch you built in
step 1.
3. Build a simple sales forecast and expense budget. At this stage, budgeting and
forecasting is more of a gut check rather than a detailed, precise forecast. You really
just need to figure out if you can build a profitable business from your idea and,
potentially, figure out roughtly how much money you need to raise. To figure this out,
youll want to build a cash flow forecast as well.
4. Schedule important tasks and milestones. Its important to move out of the
planning phase and start building your business. The sooner you can get started, the
more you will learn so you can adjust your strategy. Scheduling tasks and assigning
responsibilities creates accountablity that you can track and manage.
5. Set up a regular review schedule for your plan. Do this no matter what. As you
discover new information about the problem you are solving and your target
customers, update your pitch that you created in step 1 so that it reflects the latest
findings. A regular (monthly is ideal) review of your strategy and your progress
towards your goals will help you stay on track and, more importantly, help you change
directions should things not go according to your plan.

Now STOP. If you dont need to present a business plan document to outsiders, stop
here and start tracking your progress towards your financial goals and milestones.
Revise your strategy using the pitch that you created as you learn more about your
 customers, what marketing and sales strategies work, and as you are more accurately
able to forecast your sales and budget your expenses.
But, there are plenty of people who do need a formal business plan document. Lenders
and investors often ask for a written business plan. So, should you need the full-blown
plan document, take these final steps:
6. Produce your business plan document. Weve put together a detailed guide for
this topic, so follow along there or consider using an online tool, like LivePlan, to
make the process easier.
7. Develop your executive summary last. Investors often ask to see just your
executive summary to start with. If they like what they see, they may ask for your
detailed plan. Writing your executive summary last is the best choice because you are
just summarizing all the detail that youve already put together in your detailed plan.
8. Refine your pitch into an investor-ready presentation. The pitch that you
started with in step 1 of this process will be nearly ready to present to investors at this
point, assuming youve been revising it as you go. You may need to add a few slides to
cover progress that youve made to date and other information specific to your
business and industry.

Thats it! Remember, business planning is more of a process rather than a single event.
Good business planning helps you find success, track whats happening in your
business, and adjust course as necessary.
 The Business Planning Process:
5 Steps To Creating a New Plan
Creating your new business plan involves a detailed process with a number of stages,
some of which can overlap. Whether you are writing your plan from scratch or from a
template, or working with an experienced business plan writer or consultant, you will
find the following five steps through the process.

The business plan plan process includes 5 steps as follows:

1. Research
2. Strategize
3. Calculate
4. Draft
5. Revise and Proofread
Below are the details of each step.

Research

Detailed research into the industry, customers, competitors, and costs of the business
begins the process. A variety of resources can be used for research, ranging from
databases and articles to direct interviews with other entrepreneurs or potential
customers. Research should be documented and organized carefully with the
information gathered and the source as there is a need to cite sources within the plan.

Strategize

Next, the information from the research should inform the strategy you choose for
your business. Revisit the strategy you created even before your research and dig
deeper into decisions on appropriate marketing, operations, and hiring for the first five
years of the company's life. Strategy generally pulls from the best practices of the
industry, but uses this only as a foundation on which to add very different activities
that create a competitive advantage.

Calculate

All of the activities you choose for your strategy come as some cost and (hopefully)
lead to some revenues. Sketch out the financial situation by looking at whether you
can expect revenues to cover all costs and leave room for profit in the long run. Begin
to insert your financial assumptions and startup costs into a financial model which can
produce a first year cash flow statement for you, giving you the best sense of the cash
you will need on hand to fund your early operations.

Draft

With financials more or less settled and a strategy decided, it is time to draft through
the narrative of the plan's many sections. With the background work you have
completed, the drafting itself should be a relatively painless process. If you have
trouble creating convincing prose, this is a time to seek the help of a business plan
writer who can put together the plan from this point.

Revise and Proofread

Revisit the entire plan to look for any ideas or wording that is confusing, redundant, or
irrelevant to the points you are making within the plan. Finally, proofread thoroughly
for spelling, grammar, and formatting, enlisting the help of others to act as additional
sets of eyes. You may begin to experience burnout from working on the plan for so
long and have a need to set it aside for a bit to look at it again with fresh eyes.

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How to Create a Business Plan Step by Step
A business plan is a road map that helps navigate a company to success. It describes all
aspects of your business, including history, products, services, marketing and finance.
The plan indicates that a qualified management team exists. It communicates
information to those interested in your business, such as an investor who reviews your
plan to determine the likelihood of receiving a good return on an investment. Without a
plan, a business will likely fail.

1. Create a mission statement about why your business exists. For example: Develop
Internet-based software that provides easy project management.

2. Define a vision of what your business wants to become. For example: To become a
respected software vendor that possesses 60 percent of the market for project
management software.

3. Define the market that your business will serve. Include the business outlook for your
industry, what customer needs are addressed and a profile of targeted customers. For
example: Customers are project managers who manage multiple projects at
construction businesses.

4. Describe products and services, including their pricing. Include what makes the
products and services competitive.

5. Describe the companys legal and management structures. Explain how business
activities are accomplished. Indicate what permits and licenses your business maintains.
Include biographies of key managers.

6. Define marketing strategy, including pricing and promotion. Include customer groups
whose needs are met by your products and services.

7. Provide a balance sheet, which is a snapshot of the companys value. For an existing
business, this should cover the past three years.
8. Provide an income statement, which indicates the profit or loss over a period. For an
existing business, cover the past three years.

9. Provide a cash flow statement, which indicates revenue, expenses and available cash.
These are projected amounts if the plan is for a startup business. For an existing
business, provide amounts for the past 12 months. Actual and projected amounts are
used to project working capital.

10. Provide each principals personal financial statement and prior years federal tax
return if your business is applying for financing.

11. Append miscellaneous information that helps define your company. Include
marketing materials, contracts and key employee resumes, for instance.

12. Write an executive summary that defines what your business does and why. This
becomes the first section in the plan.