1. Draft an executive summary

The executive summary you write for your business plan is not just the first chapter for your business plan, it is the first step you take while writing your business plan. The executive summary is typically between one to two pages in length but that is not a reflection on the importance of this step.

This might actually be the single most important part of your business plan because sometimes the investors may only ask for the Executive Summary and make their decision solely based on it. This is why while you are drafting the executive summary make sure that it can be considered individually as an independent identity.

Draft an executive summary

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.

2. Write your company overview

The second step in writing your business plan is to write a company overview. Superficially it may look similar to the executive summary you just wrote, but a company overview typically is a top-level view of the business structure and what you do.

Write your company overview

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.

3. Conduct a market analysis

It is now time to get deep into the research phase where you will conduct an in-depth analysis of your industry, market, and competitors. This is where you will get into the details for the first time since you started writing the business plan.

This is the section where you have an opportunity to awaken a confidence in the readers and investors. Flaunt all that you have learnt during your market analysis in a great detail and let them know that you have a deep understanding of the niche, market, and the competitors.

Conduct a market analysis

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.

4. Explain the business structure

This step covers the details of your business’ organization and management structure. Here you would be writing about who would do what in your business, everyone’s past experience and what they are bringing to the table.

Explain the business structure

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.

5. Showcase products and services

This may be the one section that you have been waiting to dive into. Here you will be putting in your plans to position your product.

Showcase products and services

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.

6. Develop marketing and sales plan

In this step you would be explaining how you are going to market and sell your offerings.

First, let us talk about the marketing aspect. The question you will be addressing here is how you are going to acquire new customers and get them interested in your business.

Develop marketing and sales plan

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.

7. Chart out the financial plan and projections

We took our time getting to this part of the business plan, but this is in fact the most important part of the business plan.

The financial plan and the projections section give the readers or investors a peek into the existing financial state of the business and gives you an insight into the financial future of the business.

Chart out the financial plan and projections

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.

8. Create the Appendix

This is essentially all the additional information that supports what you have written in the main document, but not included in it.

Typically, it includes all kinds of data points, charts, footnotes or any other explanation needed to create a robust business plan. Additionally, it is a good idea to include the resumes of all the key members of the organization.

Create the Appendix

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.

Download Now

Conclusion

It can feel a little intimidating when you sit down to write your business plan, but it is a critical process if you want to secure the future of your business. Not only does it help you approach the right investors, but also brings about a clarity for you and your team.

Abs
About The Author
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Founder and CEO, Appy Pie, Abs has a cumulative experience of over 10 years in the world of technological development and entrepreneurship. His in-depth knowledge of the mobile app development technology and his sharp observations offer valuable contributions to the blog. His areas of expertise are SEO, trends in the mobile app world, and the latest innovations in Artificial Intelligence & Machine Learning. He has a passion for fitness and likes to get his daily dose of endorphins from a run and a strenuous session in the gym.

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