How to Write Your Business Plan
All business owners and potential business owners probably understand that they will need a business plan at some point. Hopefully, they also understand that the earlier a business plan is prepared, the better for the business because, let’s face it, the business plan is the road map for the success of the business and banks and other entities the business deals with will require one. But how does one write a business plan and what information should be included in it? First, understand that a business plan should not be static, but a document the business owner reviews and updates as the business grows. It should project what will happen with the business and how it will grow for three to five years. A well written business plan should include, at a minimum, the following elements:
- An Executive Summary – Often believed to be one of the most important elements of the business plan, the information contained in the Executive Summary will vary depending upon whether the plan is being written for a start-up or existing business. If it is being written for a start-up business, focus on your experience, background, and what lead you to start your particular business. If your plan is being written for an existing business, explain when your business was formed, the names and roles of the founders, the number of employees and the businesses locations.
- A Company Description – Use this section to describe your business, its products and services and how those products and services meet the needs of the business’ market place, list the specific consumers, businesses, and organizations the business serves, and explain the competitive advantages the business enjoys and how they make it a success.
- Market Analysis – This section should highlight your understanding and knowledge of the market place and should include information you have gleaned from your research. Included should be a discussion of the industry, your target market, the size of the market, your share of the market, pricing and regulatory restrictions (if any).
- Organization and Management – The business’s specific organizational structure (including an organizational chart), profiles of the management team, and qualifications of the business’ key employees.
- Your Product or Service Line – A specific description of your unique product or service emphasizing its benefits to potential customers.
- Your Marketing Strategy – Describe how you plan to market your product or service.
- Financial Projections – If the plan is being written for an existing business, provide detailed historical information relating to the business’s past performance. Whether the plan is being written for an existing business or a start up, include projections to show how you expect the company to perform for the next three to five years. Include projected income statements, balance sheets, cash flow statements, and capital expenditure statements.
- The Appendix – Use the Appendix to include copies of resumés, permits, business licenses, patents, contracts, and the business’s consultants.
Each business and business entity is unique. To understand the different options and which direction will be best for your situation, you need to consult with an experienced corporate attorney. Michael Leonard, Esq. of San Diego Corporate Law, named “Best of the Bar” by the San Diego Business Journal in 2016, has the expertise to guide you through everything from forming your business, to creating buy-sell agreements, to executing contracts, and anything in between. To schedule a consultation to discuss any business-related matter, please contact Mr. Leonard by visiting San Diego Corporate Law or by telephone at (858) 483-9200.