8 Steps to Writing a Successful Business Plan
Tags: Business Strategy, Finance, Financial Planning, Small Business

Editor’s Note: This post was originally published on Fundbox.com.

By Paige Smith

Whether you’re starting a new business or trying to grow your current operation, having a comprehensive business plan can help you reach your goals more easily. Depending on your business background and goals, you may need a business plan to get your company off the ground, expand operations, recover from a crisis, secure funding, or set goals for a new quarter or year.

Ready to create a roadmap for your business? Here’s how to write a business plan step by step :

1. Write an executive summary

The executive summary provides a broad overview of your business. Keep it brief-between one to two pages-and try to include the following information:

General company details

Mission statement

Brief description of your products and services

Highlights and/or achievements

Your broad financial and growth goals

2. Include a company description

Here, you can dive into your company’s background, history, and structure. In addition to sharing basic information like your company’s origin story, location, and size, make sure you explain how your company has grown or changed over the years.

You should also add details about your business’s legal and ownership structures, your company culture and values, and your current employees or hiring needs.

3. Add a market analysis

A market analysis-or in-depth breakdown of your business’s viability and profit potential-is a critical component of any well-written business plan . Make sure you gather relevant, up-to-date research and statistics to illustrate your findings, and consider breaking up the section into four key areas:

Industry: characteristics, patterns, and trends Target market: characteristics and habits of your target demographic; size, trends, and growth potential of the target market Competition: characteristics, patterns, and trends Pricing: pricing breakdown and patterns of similar products or services

4. Describe your offerings and value propositions

There are two goals for the products and services portion of a business plan: 1) to paint a more vivid picture of your business’s offerings and 2) explain how you’ll position them to your target market.

Aim to include the following components:

Product or service description: What is it and how does it work? How is it different from what your competitors offer?

What is it and how does it work? How is it different from what your competitors offer? Product or service status: Where are your products or services in the production process? If you haven’t yet created your product, share how you plan to bring it to life. You may need to conduct more research, for example, spend three months testing, or nail down the right manufacturer.

Where are your products or services in the production process? If you haven’t yet created your product, share how you plan to bring it to life. You may need to conduct more research, for example, spend three months testing, or nail down the right manufacturer. Product or service history: If your business is new, this section may not apply. However, if you’re more established, use this part to share your pricing and explain your typical production process and timeline.

If your business is new, this section may not apply. However, if you’re more established, use this part to share your pricing and explain your typical production process and timeline. Sourcing: Describe the resources and materials you need to produce your products or services, as well as the different vendors you rely on.

Describe the resources and materials you need to produce your products or services, as well as the different vendors you rely on. Value propositions: What unique value does each product or service promise to bring your customers? And how will you position your offerings to appeal to your target demographic?

5. Outline your marketing and sales strategy

This section is where you demonstrate how you’ll build brand awareness and attract customers . You can organize it by specific marketing distribution methods and sales tactics, or use the four stages of the sales funnel as a guide. For each item, describe your goals, successes, and potential obstacles.

If you’ve been in business for a while, you can describe what you learned from past marketing and sales strategies, share any challenges you overcame, and explain how you’ll adjust your approach going forward, if at all.

If you haven’t launched your business yet, list your proposed marketing and sales strategies, back them up with research, and make sure to address any potential concerns.

6. Compile your financials

The financial section of your business plan should illustrate your business’s financial plan or profit potential, as well as address your financial needs.

If you don’t have business financials to draw from, create a list of estimated startup expenses, a series of quarterly and yearly sales or revenue forecasts, and a cash flow projection. If you’ve already been operating for a year or more, include the following:

Income statement

Balance sheet

Cash flow statement

Expenses analysis

Funding requests or needs. If you’re looking for a loan or line of credit , explain how you’d use it to grow your business, and outline a plan for paying off your debt.

7. Spell out your goals

Listing out your short and long-term business goals can help you stay on track. Include quarterly goals, like increasing sales revenue by 5%; annual goals, such as launching a new product; or five-year goals, like opening a second location.

For each goal, explain the steps you’ll take to achieve it, as well as how you’ll measure your progress.

8. Consider adding an appendix

An appendix isn’t always necessary, but it can be helpful if you’re submitting your business strategy to an investor or lender. In that case, you may want to include copies of business permits and licenses in your appendix, additional data points to support your market analysis, pictures of your products, or resumes of key executives on your team.

Writing a business plan is a great way to clarify your goals, organize your finances, and prepare for growth. If you need help getting started, try searching for a free business plan template Bplans or check out SCORE small business advice and resources.