Whether you’re writing your first business plan or updating your current one, the process requires strategic thinking, market research and motivation.
A well-developed business plan is a great way for you to take stock of your company’s attributes and needs. It outlines how you will progress over the coming years and also reveals information about the business owner. It explains how your strengths will be an asset to your business and how you will address areas where you may need help.
Here is an overview of 10 sections a good business plan should include:
1. Executive summary
The executive summary is a condensed version of your full business plan and covers:
- The high points of what your company does (or will do)
- Plans for the future
- How you will execute those plans
- Why your company will be successful
The summary is the big picture. It’s where plan reviewers – including banking partners – will form a first impression of your company. Some people prefer to write this section last while others prefer to write it first.
2. Company description
Explain the different elements of your business. Help plan reviewers quickly understand your goals, marketplace needs, how your products and services will meet those needs, and the competitive advantages of your business.
3. Market analysis
Show you are knowledgeable about the industry and the market in which your business will compete. Include your research findings and conclusions, such as:
- Industry description and outlook
- Information about your target market
- Competitive analysis
- Any known regulatory restrictions
There are many resources that can help you analyze the market, including the SCORE Association and Small Business Development Centers.
4. Organization and management
Explain your company’s organizational structure and ownership, its legal structure, and team backgrounds and qualifications.
5. Service or product line
Emphasize the benefits to customers and focus on why your particular service or product will fill a need for your target customers.
6. Sales and marketing
Your sales strategy should be defined concurrently with the marketing plan. How will you sell your product? Include your sales force and sales activity strategies.
Marketing helps you attract customers. Define your marketing strategy, which should be unique to your company and evaluated on an ongoing basis.
7. Contingency plan
Document how you will deal with some of the good and bad situations of running a business:
- What will you do if your product is an overwhelming success and demand is greater than expected?
- What will you do if initial sales are sluggish? How will you jump-start sales?
8. Funding request
Ask for the amount of money you need, explain why you need it and how it will be used. You will need to provide historical and prospective financial information to support your request.
9. Financial history or projections
Demonstrate your company can meet financial obligations. If you own an established business, supply two to three years of historical data related to its performance. If your business is a start-up or still in its infancy, supply projected data showing the company’s anticipated financial performance for the current and upcoming fiscal years.
10. Personal guarantee
Most business loans require the business owner(s) to personally guarantee repayment of debt. This means the owner of the business agrees to repay the debt using personal means if the business can no longer pay its debt. As a result, you should include the following documents with your business plan funding request:
- Your personal tax returns for the last two to three years.
- A personal financial statement listing the value of your personal assets and the balance(s) of exiting personal debt(s).
With a long history of advocating for entrepreneurs, Bankers Trust understands the needs of small businesses and the value they bring to the community.
Creating your business plan will give your company the foundation and direction needed to reach your goals. Contact us when you’re ready to put your business plan in motion.
