Virtually every seasoned entrepreneur recognizes the importance of a business plan. A business plan provides a strategic framework that your business will follow. You will need it to consistently grow your brand and eventually raise capital from lenders or angel investors. What goes in a business plan? Here is a basic overview of the key elements:
- Summary. You need to provide a summary of your company, product, vision and any challenges and opportunities that you will face.
- Company overview. You need to provide a basic overview of your company. It needs to discuss your product, brand vision and details on the founders.
- External factors. You need to talk about the market and any competitive challenges that you will face. It is important to be as detailed as possible, because future investors will want to see that you have done your homework. You will also want to be prepared for the problems and know how to address them.
- Management guidelines. You will need to provide guidelines for every department in your business. Outline your strategy for operations, marketing and human resources management.
- Competitive analysis. You may believe that you have a unique product or service, but you will be competing with other businesses in some capacity. Provide a detailed overview of the type of companies that you will compete with. It is also a good idea to discuss your top competitors and your plan for competing against them.
- Financial analysis. You will need to provide yearly revenue, balance sheets and cash flow statements. You should also create projections for the next few years. List any assumptions that you made to arrive at your projections.
The level of detail varies significantly between business plans. Some are over a hundred pages long, while some are only a single page. However, most tend to be about 15-20 pages. The length of the document isn’t nearly as important as the content that goes inside. Make sure that provide a detailed overview of your business for your own planning and to show other stakeholders that you have done your due diligence.