Lots of people have ideas—extraordinary ones, in fact—but also often worthless. Why? Because execution is everything, and most people are all talk. But not you.

To prove your company is capable, you’ll need a business plan that maps out how you’ll bring abstract concepts to fruition. This document will help you plan every step of the journey so you know exactly what to do with that promising business idea. It will also serve as evidence of your competence when you need a bank loan or other investment support. Extensive research organized into a professional business plan will make it easier for investors to make risk and reward decisions that can play a significant role in the future of your business.

The Essential Elements of a Business Plan

Let’s start with the business plan definition. There are two types: traditional business plans (or standard) and lean startup business plans. 

A traditional business plan is composed of many pages that go into great detail to ensure investors are getting the full picture. A lean startup business plan is much shorter, often summarized into a single-page overview with an agile approach.

The section details below will help you get going on your own business plan outline, regardless of which format you choose. How much information you include will depend on whether you are providing a quick snapshot of your company or wooing an investor with a grand presentation.

Executive Summary

The first part of your business plan summarizes several key points about your company that you’ll elaborate upon in later sections. This will give readers a broad view of your business goals and how you anticipate reaching them. 

Business model information to include:

• What does your business do?
• Who is part of your target market?
• What are your competitive advantages?
• How will you finance it, and what are your projections?
• Who are your leadership and employees?

Your executive summary should be succinct and impactful. Show readers why your business is a winner worthy of their undivided attention.

Company Description

Begin with an appealing business description. Mention your official company name, the business structure, and its physical location. Next, allow your passion for this line of work to bubble to the surface. An impactful mission statement is a good way to present this information.

Is there a charming story behind the history of your company? Talk about why your business exists and how it solves problems. Get your readers interested in what you produce and how you’ve positioned your brand for profitability. It’s also ok to sum up basics about intellectual properties and patents, why your products and services match the market, and how you’ll manufacture and price them.

Market Analysis & Industry Analysis

Some readers will wonder, “why you, why now?” Be ready to respond with persuasive indications your business can deliver meaningful results, both in terms of how you’ll solve problems for customers and why this is the best time to seize this opportunity.

Discuss the state of the industry in which your business operates, including its size, growth potential, and key players. How does your business fit into all this, and how will you position it to succeed? What are your strengths and weaknesses, and how will you use these to your advantage? Who is your target market, and why will they pick you over a competitor?

Marketing Strategy & Sales Strategy

Completing the market and industry analysis above will empower you with the information necessary to formulate winning strategies for marketing and sales. This section will explain how you’ll improve brand visibility and convert your audience into customers. It should also address how you’ll encourage repeat business with effective customer retention. 

These strategies may include various marketing campaigns, advertising channels, promotions, and distribution. Thorough research will help you uncover some of the best tactics for maintaining a reliable business income within your chosen industry.

Pricing Strategy

Your pricing strategy shows the cost of producing your goods and services, the pricing you have in mind, anticipated Return on Investment (ROI), competitor pricing, and any other related information. You might also wish to discuss more than one pricing strategy based on the factors affecting your unique business.

When making sales forecasts, solid research is required to uncover realistic figures. Pure guesswork won’t convince potential investors. They’ll expect insight into why you’ve landed on the numbers presented. For the best results, keep all documentation on hand to support your projections with confidence.

Operational Plan

This part of your business plan focuses on the day-to-day operations of your business model. It often comprises two primary sections that answer how you will implement everything laid out above. Elaborate enough to prove you know what you’re doing, whether this is a new venture or one that’s more established.

The Development Phase focuses on how you’ll get it done: production, suppliers, quality assurance, and anything else that shows you are well-prepared to begin. 

The Manufacturing Phase outlines the essential ingredients to move forward. Think facility, tools, materials, timelines, fulfillment, and related information.

Financial Projections

Taking a critical look at the financials surrounding your business is vital to success, and it’s especially crucial if you want to convince investors to back your brand. Existing businesses should aim to provide several years of financial statements. Startups can include forecasts instead, with month-by-month expectations.

Use charts and other visual aids to improve clarity. For transparency, consider laying out a couple different scenarios. It’s also advisable to enlist the help of an accountant for this portion of your business plan to ensure it meets the Generally Accepted Accounting Principles (GAAP). 

Making Your Plan Actionable: A Roadmap to Success

When you’re excited about your business and seeking funds to launch something new, it’s tempting to embellish. But it’s important to remain realistic about what you can accomplish and the challenges you’re likely to face along the way. 

Flexibility is necessary, especially for new businesses. Your business plan will need to grow, shift, and evolve in parallel. Expect to make regular updates to your documentation to account for changes to your company, its industry, marketing strategies, consumer sentiment, and so forth. 

Make Progress with S.M.A.R.T. Goals

Feeling stuck or overwhelmed? Consider using S.M.A.R.T. goals as a framework while writing your business plan. If you’ve never heard of this acronym, here’s the lowdown:

S = Specific: Narrowing down your goals will help you remain focused.

M = Measurable: Track progress and make any necessary adjustments.

A = Attainable: Realistic goals are easier to achieve and boost spirits!

R = Relevant: Do your goals make sense for your business and remain on target?

T = Time-bound: How long will this task take? Deadlines can push goals forward.

The S.M.A.R.T. framework guides you toward your goals, making progress more apparent. This is essential for retaining the motivation needed to write thorough, irresistible business plans. 

Write A Business Plan: First Steps & Final Tips

Putting together a polished business plan may seem tedious, but breaking the process into bite-sized chunks will make it more manageable. You can slowly build up each section until all the blanks are filled in with the most accurate data.

If doing so is still a daunting prospect, check your area for local assistance via the U.S. Small Business Administration website. This website provides excellent online resources and some areas have free or low-cost services for local business owners.

Note that not all business plans require the same information and some make adjustments to the primary sections. This makes it difficult to rely on a single business plan template. We recommend also speaking to a business lawyer and accountant for professional guidance to make the most of your business plan and ensure it aligns with your current needs.