How to Write a Business Plan

How to Write a Business Plan in Four Sessions
Session 1
I. Overview
What is the intention of the business plan?
i. Why you need a business plan
ii. Make it personal, reflect your own ideas and tell your story
iii. Roadmap to success (or failure if analysis is incomplete)
Who is the audience for my business plan and what do they expect?
i. Internal, Board of Directors, Bankers, Lenders (format may vary depending on
the purpose of the business plan)
ii. Not just promises, but proof that the idea is feasible (data, research, analysis)
What you should avoid in your business plan
i. Do not be overly optimistic, be realistic and show that you know where
potential risks are. It makes your plan more believable.
ii. Place reasonable limits on long-term projections; focus more on near-term
iii. Avoid language that is overly technical and might not be generally understood
II. Executive Summary
The executive summary is usually written last and is a summary of each key element in
the business plan. It is the most critical part because it is first impression and needs to
be interesting enough for the reader to want to know more.
i. Business concept: what your business will do
ii. General company overview
iii. Marketing plan, industry, target market
iv. Operational plan and implementation
v. Financials
III. General Company Overview
Company description with name of the company
i. Business goals and objectives
ii. What the business will do: specific product and service offerings
Background about the founding of the company
i. History: how did you come up with the idea and what experience do you have in
that industry (what qualifies you to be successful in your type of business)
ii. Ownership and legal structure: sole proprietor, partnership, corporation
Nature of the industry and what role the business intends to play in it.
i. Describe the industry trend, specifically for the area of operation, the demand
for that type of service or product
ii. How your product is different from anything already available
iii. Any licensing requirements or government regulations
Session 2
IV. Market Analysis
Product and Services: Now is the time to “sell” your product or service. Present in a
factual but exciting manner.
i. Physical description of the product and its uses (perfect time to emphasize
uniqueness of the product, what need are you filling)
ii. Show the benefits to the user.
iii. Stage of development of the product or service (how you got here, where it will
go in the future, what improvements would be possible)
iv. What is the competitive advantage of your product? What does it do better
than other similar products?
Marketing and promotion: communicate the manner in which your business will be able
to succeed, work from the general to the specific, from the industry as a whole to your
specific product within that industry.
i. Industry Analysis: Explain the industry, trends, participants, distribution patterns
( ). Cover important developments and any
current or expected problems in the industry. This is the big picture analysis of
the market. Make sure to show how your business fits into this industry.
ii. Market Analysis: who is going to buy your product? Market needs, market
trends, market growth. Clearly define the type of customer who will be
interested in your product. Find a weakness in the market and take advantage
of it – niche market.
iii. Marketing plan: with clearly defined product and customer, how are you going
to communicate the value of your product or service to the potential customer.
What is the price of your product? Where or how can a customer buy it?
iv. Competition: find out who your direct competitors are, what they sell at what
price, how long they have been in business. Describe threats from competition,
but also what customers are looking for and currently don’t get from the
competition (strengths and weaknesses of your competition)
Session 3
V. Operations
Operational plan (varies widely with the type of business)
i. How are you going to deliver your product? Explain that you know what it takes
to get the product from the supplier to the customer
ii. Where is the location of your business
iii. Who are the suppliers
iv. How are you going to distribute
Management and organization:
i. Management team: who are the people in key positions and do they have the
qualification necessary to run a business (identify strengths and possible
ii. Organization structure: show that you understand what type and how many
people it will take to run the business
iii. Organizational chart (possibly)
Session 4
VI. Financials
Cash flow statement (first year monthly, years two and three yearly): be conservative,
do not paint to rosy of a picture.
Income statement (first year monthly, years two and three yearly): show that your
business will be profitable, if not in the first year; show how long you estimate it will
take until break even.
Balance Sheet
Sources and uses: are loans necessary, possible investors, how will the money be used?