8 Steps to Write the Perfect Business Plan[Free Sample Business Plan included]

Understandably, it is easy to get carried away because of all the excitement you have about the new business you are all set to embark upon. However, make sure that your executive summary is short and crisp. This can be done simply if you include only the following six pieces of information.

1. Mission Statement – restrict this section to just one paragraph maximum and describe your business with your central goals clearly cited in it.
2. General Company Information – this has all the basic information about your company like the date of establishment, founders and their designation, number of employees, and location or offices.
3. Highlights – add the examples and graphs of any growth your company may have witnessed since the company was started. These may include financial highlights or any other key milestones for the business. These highlights are essentially the proof to support your claim to any future success. In case you are a start-up, you may not have any such numbers, so you need to talk about your experiences and highlights from your past ventures.
4. Products and Services – describe the product or service you are selling and if you don’t have one yet, describe the plans you have for the product you plan to offer.
5. Financial Information – if the intent is to get funding for your business, include the funding goals while citing the names of the banks or any other lenders you have worked with, so far.
6. Future Plans – include a crisp summary of where you plan to take your business to.

Keep it short, keep it simple. Spare the details for now, you can get into them later, once you have gotten the hook in!

Pro Tip: start writing your executive summary after you have written the whole business plan. This way, you will have higher clarity, greater details, and hence be better equipped to summarize them.

The company overview can be broken down into the following:

1. First, write a couple of sentences describing what your business does. Model this as the written version of your elevator pitch. This part would give the readers and investors a holistic view of the business.
2. Now, describe the nature of the industry and marketplace that your business caters to. Clearly mention where you are fitting in, what is the need that you are addressing and how. Needless to say, this explanation needs to be short.
3. You are done with the elevator pitch and have described your value proposition; it is time to lay out the legal structure. Mention whether you are an S-Corp or C-Corp or LLC and briefly describe the ownership structure as well.

Don’t get into the details yet. Create a company overview that will be quick pitch of what you do, who you cater to, and how you’ll cater to them. Then, you can include a brief look at the current legal and ownership structure to clearly indicate to the clients what they are getting into.

Your market analysis section in the business plan must include the following:

1. Description of the industry

   Offer an in-depth description of the industry you are a part of and include a description of how big it is, the way it has grown, predicted growth pattern by experts, and key trends or events that have an impact on it. Also, create a list of the key players in the industry.

2. Overview of the target market

   In the previous section, you created an overview of the industry, now it’s time to get deeper and form an overview of the target market you are catering to.

3. Characteristics of the target market

   Define the characteristics of your target market and answer questions like:

   • Who are your customers?
   • What do they need?
   • Who is serving them currently?
   • Where is your target market located?
   • Which key demographic are you catering to?
4. Growth and size of the target market

   Talk about how big your market is and include as much data as possible about how your target customers make purchases in the industry with details about how many, how often and when (time of the year). After giving an overview of the existing scenario talk about the positive scope of growth in the market

5. Market share potential for your business

   You have talked about what the market looks like when you are not in it, now it is time to talk about the market with you in it. Talk about the market share you expect to gain the targeted market.

6. Pricing

   Through this market research you would be able to arrive at the best estimate of the pricing you can set for your products and how you are going to distribute the products. At this stage you would also be talking about the promotional strategies you are going to opt for.

7. Entry barriers or challenges

   As you conduct your market research you should come across some entry barriers. The entry barriers may be anything from certain regulations, technological breakthroughs, or even lack of personnel in the area.

8. Competitor research

   Once you have a holistic overview of the target market you can zoom into the top competitors. Research them well in terms of their market share, strengths and weaknesses, any barriers they may pose to you, partnerships and more.

This is the one section that will take the longest for you to write and would take the most amount of research.

This step can be broken down into the following:

1. Organizational structure

   This is where you would be explaining how and where the stakeholders fit into the big picture. Create an organizational chart that demonstrates your business structure. Once you do this, you would have on record, who is responsible for what.

2. Ownership structure

   This is something you have already touched upon earlier while writing the company overview, but now you would have to get into the details about the legal structure of the company. Also, you would have to explain who owns what and how much of it they own.

3. Background of owners and board of directors

   List out all the managers, team members, directors, partners along with their background and past experiences. This goes a long way in proving to the potential investors that you have a capable team at every level.

4. Hiring need

   It may be so that currently you have a small team, but in future you inevitably will have to expand. This is where you list out the key hires you plan to make in future to get your company where you want to see it.

This step can be broken down into the following:

1. Organizational structure

   This is where you would be explaining how and where the stakeholders fit into the big picture. Create an organizational chart that demonstrates your business structure. Once you do this, you would have on record, who is responsible for what.

2. Ownership structure

   This is something you have already touched upon earlier while writing the company overview, but now you would have to get into the details about the legal structure of the company. Also, you would have to explain who owns what and how much of it they own.

3. Background of owners and board of directors

   List out all the managers, team members, directors, partners along with their background and past experiences. This goes a long way in proving to the potential investors that you have a capable team at every level.

4. Hiring need

   It may be so that currently you have a small team, but in future you inevitably will have to expand. This is where you list out the key hires you plan to make in future to get your company where you want to see it.

This step can be broken down into the following:

1. Positioning
2. This is where you describe the way you would be positioning yourself and your products. Based on the way you position your brand and products; your customers will find you and establish first contact.
3. Promotion
4. Once you have clearly stated out how you are going to position yourself, lay out for the reader and investors where you would be sending the word out and how are you going to reach the customers. This would include the packaging plan and design, advertising plans, public relations, or content marketing.

After the marketing plan is ready, it’s time to develop the sales plan:

1. Sales staff

   Explain in the plan who will be doing the sale. Would you need an entire sales team and how big would the team need to be? Would they need training and who is going to train them? Lay it all out here.

2. Sales strategy

   You need to have a sound strategy in place. Whether it is cold calling or in person sales meetings explain it all here. Draw out and describe the entire sales funnel in here.

It is unrealistic to expect that you would know exactly which marketing and sales channels would work the best for you. However, you need to include a crisp overview of the plan you drafted for sales.

If you have been around for some time, then this section will have all the financial data from past performance. The section should have the following data:

1. Income statements
2. Cash flow statements
3. Balance sheets
4. Accounts receivable statements
5. Accounts payable statements
6. Debt obligations documentation

In case you are new and do not have any past data for your company finances, then you must include financial projections in this section. These projections are either based on your past financial data or on the research and analysis on the industry and your top competitors.

The forecast you include in this section should have the following:

1. Projected income statement
2. Cash flow forecast
3. Balance statement
4. Capital expenditure budget

Apart from this, the financial plan must also mention any current or future funding needs. In the funding request, you must include the following:

1. Current funding requirement (amount)
2. Future funding requirement
3. Intent & effect of acquired funds

This is important especially if the business plan is being read by a potential investor, they would know exactly how the funds they contribute would be used and the impact they will have on the business.

How to write a great business plan?

This 8 step process is essentially your step-by-step guide to writing a great business plan. Though it may seem intimidating when you handle it as one massive project, but when you break it down into these 8 steps the task becomes manageable.

Research the industry, competitors, and the financials and remember the following:

• Be efficient, be succinct

  Word economy is particularly important. Every section should be written in the most concise way possible.

• Keep the audience at the center of everything

  Make sure that everything you put in the business plan is easy to understand and is easy to consume.

• Learn how to work smart

  There are multiple software tools that can help you with writing a business plan that is effective.

Business plan sample

As promised, here’s an interesting business plan sample that can be a great start for you to create your own. It is natural to get stuck for inspiration sometimes and this sample business plan can be a great place to start.