Your business will almost certainly require fine-tuning as you adjust to the many short-term needs, issues, and concerns raised in the first several weeks and months of operation. While it is easy to let these immediate issues dictate your business decisions, you must not lose sight of your long-term business goals. A well-organized, comprehensive business plan is therefore an important component of your new business; similarly, an updated business plan is valuable for reframing your business’s strategy prior to launch.
A business plan is a living document that typically covers three to five years, though it should continually evolve as you respond to the market, your customers, and your own internal business issues.
The list below outlines a variety of issues that you will want to consider for your initial business plan as well as some issues that should be reevaluated before the launch of your business and at various points throughout the growth of your business.
- Executive Summary – One of the most important sections of a business plan, the executive summary briefly notes your business’s current status, its desired path of future growth and expansion, and its reason for future success (that is, why the business idea will be successful). New start-ups may have little to include in this section of the business plan; instead, a founder should consider focusing on prior relevant experience and the decisions that led to the start of business, thus demonstrating adequate examination and market analysis. Established businesses should consider including in this section a mission statement, a plan and strategy for growth, a description of products and/or services, financials, and other basic business-specific information.
- Company Description – This is the boiled-down version of what your business is and what your business does. Think of this section as resembling an “elevator pitch” that you might share with someone if you wanted to pitch them your business in 30 seconds or less.
- Market Analysis – This section should comprise an overview of your industry. Include information regarding industry growth rate, life cycle, reasonably attainable market share, barriers to entry, pricing and margin targets, and consumer or governmental restrictions or regulations.
- Organization and Management – An organizational chart is valuable for defining the structure of your business. Maintaining up-to-date management profiles may also help to ensure that nothing falls through the cracks and that time, energy, and talent are deployed effectively.
- Service and Products – Describe the core of your business from both your perspective and from your customers’ perspectives. Detail the possibility for growth, possible intellectual property issues, and research and development.
- Marketing and Sales – This section should focus on your particular business strategy, rather than on the market as a whole (which should be discussed in the market analysis section, above). Market penetration, growth, distribution strategy, and communication strategy are all important issues to address here. Depending on your particular business strategy, a separate sales strategy section may also prove useful. The sales strategy section, if included, should describe your business’s sales force and sales activities.
- Financial Projections – Two major categories exist within the financial projections section: historical financial data and prospective financial data. Historical financial data may be useful in shaping the future of your business and for reevaluating areas of weakness in your current business plan. Further, graphs and charts may be particularly helpful here in depicting data trends and projections and in closely analyzing business performance.