How to Write a Business Plan
Your business plan and marketing strategy are vital documents when growing an established business, branching out into a new area, or being an entrepreneur starting something entirely new. A good business plan serves multiple purposes, helping you get where you want to go—and potentially leading to financing. Knowing how to write a business plan and an effective executive summary sets you up for success.
What Is a Business Plan?
A business plan is a formal document that lays out your company aims, describes how you will achieve those goals, explains the context of the business, and details the resources you will need.
Why is a business plan important? It gives you a roadmap with benchmarks for navigating through the challenges of starting a business. It gives your team clarity and keeps them aligned. It can also help you secure funding from upper management in your corporation, investors, or people willing to lend you money by conveying your vision, risks, and viability to earn a profit.
What Is a Lean Startup Business Plan?
Before explaining how to write a business plan and all its sections, you should decide what kind of plan you need. A traditional business plan is detailed and includes much thinking and research. A lean startup plan is an overview of the essentials—possibly as short as a single page. It outlines the value you will provide, the resources needed, and the steps to take.
8 Steps to Writing a Business Plan
The structure of your business plan will depend on your ideas and its purpose. That said, the essential components include:
Executive Summary
Although this section appears first, it is the last section to write. It’s an overview of your plan that concisely encapsulates the key points from the sections below. Write it so the reader can walk away with the gist of your plan without having to read anything else. But also write it to generate interest in further exploration.
Company Description
Describe the premise for your business and the value proposition. Present your vision, mission, and goals, along with a synopsis of what you’ll offer.
Market Analysis
This section provides context for your business, including why it’s needed, the current structure of the industry, important trends, who your competitors are, along with their strengths and weaknesses, and what needs are not being met.
Description of Products and Services
Go deep in describing the products and services you’ll bring to the market. Don’t just describe features. Discuss the benefits and the competitive advantages that your products and services will have.
Marketing Strategy and Sales Plan
This is where the rubber meets the road. As great as your products and services may be, you can’t make money if no one knows about them, wants them, or buys them. You need a marketing strategy and details about how you’ll generate revenue. Without a marketing strategy and a plan to sell, you don’t have a business plan—you simply have a dream.
Budget and Financial Projections
This section is as important as the marketing strategy. What will it cost to operate your business? How much money do you plan to bring in, and when? Include an income statement, cash flow statement, and balance sheet. It helps to be pessimistic about costs. Everything costs more than you expect. Be pessimistic about income. Making money is hard.
Organization and Management Structure
You need to build your team. What roles are necessary in your organization? Whom will you be starting with? Why are they so valuable to your coming success? This section should outline the initial structure of your organization and include resumes for key team members. It should also project how your structure will evolve with success and growth.
Action Plan
Lay out the detailed steps you’re going to take to put your business into operation. Think through each phase, from starting out to growing. The more detail you put into this section, the better. Consider if-then options that show you have thought through the realities of things never quite going to plan and that you’re flexible in adapting to challenges and opportunities.
How to Do More in Business
Learning how to write a business plan is an essential entrepreneurial, strategic, and management skill. When you earn your Bachelor of Science in Business at Excelsior University, you learn more than just business theory. You gain practical skills, from strategy to data analysis, that will power your success from the start of your career through each successive rung up the ladder. With the broad educational foundation you receive at Excelsior, you’ll be able to plan for more than just a business—you’ll be planning for your career.
