You could have the greatest idea on earth, but without a plan to execute it, the idea would be worthless. That’s why a strategic business plan is essential for all entrepreneurs.
If you’ve had a business idea stewing around in your head for a while, now is the time to sit down and create your business plan. Below, we’ve outlined how to do it in just one day — but first, let’s go over some basics.
What Is a Business Plan and Why Is It Important?
Business plans are generally used for new startup businesses, but they can be used by already-established businesses as well. In the latter case, companies who started with a business plan should revisit their plan from time to time to change it and update it as needed.
The main goal of a business plan is to define a company’s specific business objectives, including what the business will sell, how they will sell it, how they will analyze the market and advertise their services or products, and how the inner workings of their business will be organized and funded.
Business plans are useful documents for business owners and employees themselves. However, they are more commonly used to drive interest from investors before a company gets fully off the ground. The larger and more complex the business, the longer and more in-depth the business plan will traditionally be.
Creating Your Business Plan: Step-by-Step
After the title page, most business plans will contain the following sections.
1. Executive Summary
This section lays out all of the basics about your business, including your vision for success and why your company should matter to readers. Specifically, the executive summary should include your business name (plus any employees already hired), your business address and contact information, any necessary background, and what products and/or services you’ll be offering.
2. Business Description
Your business description should contain more details about your business’s industry, your target audience, and how you plan to approach the competition. This section should also help your readers understand why your business is different from similar companies.
3. Market Analysis
Here’s where you’ll go into detail about your competition. Before entering any industry or market, you need to know what’s already out there. Naturally, you can’t infringe on the products, services, or approaches of other businesses that have trademarked their own practices. But conducting a market analysis is also critical for differentiating your business from the competition and ideally gaining more customers and clients as a result. The market analysis section of your business plan should be a compilation of the results and information you’ve gleaned from conducting a deep dive into the market trends in your industry.
4. Service or Product Line Description
In this section, you’ll have a chance to go into detail about the services and/or products you’ll be offering. This is generally the easiest part of the business plan writing process because it’s what business owners know most about. You want to make your products and services sound as useful and enticing as possible.
5. Operational Plan
Here’s where you’ll talk about the organizational structure of your business in legal terms as well as your company’s day-to-day operations, including your supply chain design, sourcing process, and procurement plan. Be sure to include as many specifics as possible.
6. Sales Plan & Marketing
How do you plan on selling your products or services? Are you an e-commerce business, or will you have a brick-and-mortar store? How will you market to your target audience? Do you plan on buying ad space on television, running commercials on the radio, or using influencer marketing online? These are the questions you’ll need to answer in this section.
7. Financial Plan
Funding will automatically be necessary for most startup businesses. In the financial plan section, you should outline how much funding you’ll need and what the funds will be used for. Be sure to include a financial analysis and projections for the future.
Does Every Entrepreneur Need a Business Plan?
You’ll undoubtedly find successful business owners who claim proudly never to have created a business plan. And to be sure, there are numerous successful companies that have existed without the need for one.
Still, a business plan is always recommended — especially for first-time entrepreneurs. It’s a foundational document that orients you toward a vision and a goal for your company, and if you’re hoping to land investors, they’ll want to see it. Plus, even if a business claims never to have had a plan, it’s doubtful they didn’t write down their core objectives and parameters at least one point in their entrepreneurial journey. It may not have been formal — but that’s a business plan.
For this reason, we do recommend you always create a business plan for any new business endeavor. Even if only to help you organize your own ideas, the business plan remains one of the most essential elements of successful business development.