How To Draft an Effective Business Plan

Before starting a new business or expanding an existing one, you may want to create a business plan that outlines your current business model and future growth. The plan can give you a detailed map of where you are, how far you've come and where you want to be with your business. It's important to be thorough when creating your business plan. Since your business plan is a formal document that serves many purposes, it's necessary to organize it so it's detailed and easy to read. To properly detail your plan, you can include several sections of information, as outlined below:

1. WRITE A THOROUGH EXECUTIVE SUMMARY

The first aspect of your business plan is the executive summary, also known as a company description. This section explains your business and its goals to investors, partners and lenders. Write your mission statement, what drove you to create the business or what's encouraging you to grow your business and include the following:

• An overview of your company, including when its creation and the number of employees
• A problem or consumer need that your company addresses
• A description of the products or services you provide
• A synopsis of your financial standing
• A summary of how you plan to grow your business

2. INCLUDE A MARKET ANALYSIS

A market analysis helps readers to understand the industry, why you're an expert in it, and what's happening within it. You may want to consider the following when performing your analysis:

• The current size of your industry and projected growth
• The target market, including its location, wants and needs
• The details about your competitors, including their strengths and weaknesses
• The plan you have to meet your target market's needs better than the competitors
• The pricing of similar products in your market and how your profit plan differs

A SWOT analysis is a simple tool that can be used to help with preparing your analysis. Build on your Strengths; minimise Weaknesses; seize Opportunities, and counteract Threats.

3. OUTLINE YOUR ORGANISATION AND MANAGEMENT STRUCTURE

By detailing your organization and management structure, you highlight how each position contributes to the company's overall success. You may also include plans for future roles to show you intend to grow your workforce.

• The current owners and shareholders
• How the business' organizational structure functions
• What roles the organization has or needs to fill

4. EXPLAIN YOUR PRODUCTS AND SERVICES

Clearly define what problem your business solves with its product or service. Explain your company's benefits and what makes it unique. It's also wise to include plans for future improvements. This section might include:

• What you can provide to consumers
• How your product or service is unique
• What your timelines for development, production and distribution are
• How vendors or third-party sources can contact you

5. DESCRIBE YOUR MARKETING STRATEGY

Explain how you plan to promote your business, including who may participate in your marketing strategy and how you can bring buyers to the business. Include things like:

• Avenues for promoting your brand or service
• Plans for engaging your target market and driving sales
• Expectations on costs for advertising, employing third-party sources and software tools
• Plans for contacting the media or print sources for marketing

6. DETAIL YOUR SALES STRATEGY

Itemize your sales plan with detailed information on the strategy and projections of your sales process. One effective method for building this is to work backward from your goal to where you are now and may include:

• Your sales team introductions and their roles
• Your sales funnel details and timeline
• Your current and projected sales and anticipated timeline
• Your plan to drive sales

7. SUMMARIZE YOUR FINANCIAL PLANNING

Having a plan on how to make a profit and help investors grow their financial contributions is imperative to your business plan. The financial plan and projections provide an idea of how much financial support you currently have and how much you need. It also details what you believe your business may look like after you've received the financial support. Below are some of the few things you could include:

• Current and past financial documents
• Net operating income statements
• Cash flow and income statements
• Balance sheets, including expenditure
• Projections of the financial outlook over the next three to five years
• Expected returns on current and future investments

8. INCLUDE A CLOSING STATEMENT

In this section, restate the information you provided throughout your business plan in a clear and concise manner. Reiterate the strengths of your company and your confidence in its sustainability. In this section, you can include:

• Your company's standing in terms of market share and profitability
• Your current sales trends
• Your company's strengths and successes
• Your company's market need for your current product or service
• Your need for improvements
• Your company's projected growth and how investors can benefit from it

9. PROVIDE AN APPENDIX

The appendix should include any supporting documents to support the points made throughout your plan and may include:

• Charts or data relative to your business, competitors and the industry
• Contracts, permits or legal documents that confirm your business' registration
• Resumes, including copies of degrees and certifications from employees
• Resumes of your company's leadership or management team

10. REVIEW YOUR PLAN

After finishing your document, go back and edit where needed. Ensure all information is clear and to the point. Proofread your content for spelling, punctuation and grammatical errors.