The Business Plan

Read this section to see why business plans are essential and what sections should be included.

KEY TAKEAWAYS

  • A business plan tells the story of your business concept, provides an overview of the industry in which you will operate, describes the goods or services you will provide, identifies your customers and proposed marketing activities, explains the qualifications of your management team, and states your projected income and borrowing needs.
  • In your business plan, you make strategic decisions in the areas of management, operations, marketing, accounting, and finance. Developing your business plan forces you to analyze your business concept and the industry in which you'll be operating. Its most common use is persuading investors and lenders to provide financing.

  • A business plan generally includes the following sections:

    1. Executive summary. One- to three-page overview.
    2. Description of proposed business. Brief description of the company that answers such questions as what your proposed company will do, what goods or services it will provide, and who its main customers will be.
    3. Industry analysis. Short introduction to the industry in which you propose to operate.
    4. Mission statement and core values. Declaration of your mission statement, which are fundamental beliefs about what's important and what is (and isn't) appropriate in conducting company activities.
    5. Management plan. Information about management team qualifications and responsibilities, and designation of your proposed legal form of organization.
    6. Goods, services, and the production process. Description of the goods and services that you'll provide in the marketplace; explanation of how you plan to obtain or make your products or of the process by which you'll deliver your services.
    7. Marketing. Description of your plans in four marketing-related areas: target market, pricing, distribution, and promotion.
    8. Global issues. Description of your involvement, if any, in international markets.
    9. Financial plan. Report on the cash you'll need for start-up and initial operations, proposed funding sources, and means of repaying your debt.
    10. Appendices. Supplemental information that may be of interest to the reader.