How to Write a Business Plan That Investors Will Want to Read

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Before You Start

You’re itching to start creating your business plan, and that’s a good thing. But before you get started there are a few things to consider.

Executive Summary

The first section of any business plan will be the executive summary. Think of it like a high-level snapshot of your business. It gives a general sense of what your business is all about, what products or services you provide, where you’ve been, and where you’re headed.

  1. General information. This includes the founding date of your business, names and roles of founders, how many employees you have, as well as the number of locations (if you have more than one).
  2. Company highlights. Draw attention to important growth highlights in your company. This may include financial highlights or other important things your business has achieved. If possible, include hard numbers as well as charts and graphs. If you’re just getting started, include information from past ventures.
  3. Products and services. A short description of what you sell and who your customers are. If you haven’t yet developed your product or service, lay out the plans you have for developing one.
  4. Financial information. If you desire funding, you’ll need to spell out both your financing goals as well as any sources of funding that you may already have.
  5. Future plans. A quick glimpse of where you’re headed with your business.

Company Overview

Next, sketch out a quick overview of your company. This provides others with more detail regarding exactly what your business does and how it’s structured. Like the executive summary, this section should be relatively short.

  • Your primary customer base
  • The big problem that you solve for customers
  • How you solve that big problem
  • How do you serve them? Do you offer a superior product? Better services? Lower prices? A better location? In other words, what do you offer that other companies don’t?

Market Analysis

Now it’s time to start getting into more detail. The market analysis section of your business plan provides in-depth information about your industry, your specific market, and the competition.

  • Target market data. Within the industry, which customers are you targeting? What are their specific needs and how are you currently trying to address those needs? What demographic information characterizes your target market (age, gender, income, employment, and more)?
  • Target market size. How much does your target market spend each year on purchases? How often do they purchase? When do they tend to purchase? What’s the projected growth of your target market?
  • Market share potential. What percentage of your target market can you acquire?
  • Barriers to entry. What things might make it difficult for you to enter into and succeed in your target market? High technology costs? Strict regulations? Difficulty finding qualified personnel?
  • Competition. Who are the top competitors within your target market? What’s their current market share? What are their key strengths and weaknesses? In what ways might they make it difficult for you to succeed?

Organization and Management

Next, describe how your business will be organized and structured. The objective is to explain the role of each team member and the experience that each member brings with them.

  • S-Corp?
  • C-Corp?
  • General partnership?
  • Sole proprietor?
  • Board of Directors
  • Managers
  • Partners
  • Any other essential people

Products and Services

Now it’s time to explain in detail exactly what products or services your business will provide to customers. Your goal in this section is to show how your product or service is uniquely positioned to make a splash within your target market.

  • Development objectives. If your product or service isn’t ready to go, map out the steps you’ll take to finish it. Spell out the research and development actions you’ll take to ready your product or service for market. Also, note any future products or services you plan on developing.
  • Proprietary information. Do you have any intellectual property, patents, or proprietary information that’s essential to the success of your business? Clarify such information in this section.
  • Supply chain. If you depend on suppliers or vendors for any aspect of your business, list the details. Make it clear who supplies what, how often you get those supplies, and the method by which you receive them.

Marketing and Sales

You’ve discussed the critical details about your product or service. Now it’s time to talk about how you’re going to get that product or service into the hands of customers. You may have the greatest product or service in the world, but if you don’t have a specific plan for selling it, you’ll struggle to succeed.

  • Superior quality?
  • Superior service?
  • Next, talk about who will be doing the selling. If you need a sales force, who will train them and how big will the team be?
  • Lastly, lay out the budget you have for both sales and marketing. This will help readers gauge the scope of your efforts and possibly estimate results.

Financial Projections

This is a critical section of your business plan. In it, you paint a clear picture of your business’s current financial status, while also mapping out where you hope to be in the future.

  • Balance sheets
  • Cash flow statements
  • Operating budget
  • Accounts receivable and payable statements (if appropriate)
  • Documentation of any debt you’re carrying

Funding Request

If you need funding to achieve your business goals, be very clear in what you’re asking for. In this section, lay out exactly how much funding you’ll need over the coming five years. Explain how you’ll use the funding to achieve your goals.

  • The type of funding you desire (loan, investment, etc.)
  • The terms you’re requesting for the funding

Appendix

You’re almost done with your business plan. The last section you need to include is the appendix. This final part matters just as much as all the other sections.

  • Permits
  • Product pictures
  • Legal documents
  • Licenses
  • Patents
  • Contracts

Build Your Dream

Yes, creating a business plan is a lot of work. It takes many hours to create a compelling plan that will convince others to support your vision. But they’re hours well spent.

  • Step #2: Company Overview
  • Step #3: Market Analysis
  • Step #4: Organization and Management
  • Step #5: Products and Services
  • Step #6: Marketing and Sales
  • Step #7: Financial Projections
  • Step #8: Funding Request
  • Step #9: Appendix

Written by

I come from a land down under | Manners will take you where money won’t | HR Consultant | OHS Specialist | Personal Trainer

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