Now that you have answered the all important question from yesterday’s blog and you’ve worked on developing your business idea, it is time to start creating your business plan. If you are a detail-oriented person, this step is probably a critical one that you already had on your to-do list. If you’re more spontaneous, don’t worry if you’re asking what a business plan is and why you need one! Just know that every business needs a business plan, but you can make your plan as formal or informal as you’d like based on your individual business needs.
A business plan sets the foundation for your business, which is why it is essential for every business to have. Putting the building blocks of your business down on paper is important for all organizations, but if you are wanting to take out a business loan for your start-up costs or you are looking for partners or investors, you will be required to have one.
There are two types of business plans you can develop, according to the U.S. Small Business Administration (SBA): a Traditional Business Plan or a Lean Startup Plan. We have broken down what should be included in each plan below with descriptions for portions that are not self-explanatory.
Traditional Business Plan
- Executive Summary – A brief introduction of your business, your mission statement, and financial information if you are using this plan to acquire financing
- Company Description
- Market Analysis – Your Industry outlook and target market
- Organization & Management – The legal structure of your business and descriptions of your team
- Services Offered
- Marketing & Sales
- Funding Request – Use a 5-year timeline of your business for this request, debt or equity & terms
- Financial Projections
- Appendix – Include any documents or materials that would be appropriate to include
Lean Start-Up Business Plan
- Key Partnerships – This includes suppliers & manufacturers
- Key Activities – What is your competitive advantage?
- Key Resources
- Value Proposition – What do you bring to the market?
- Customer Relationships
- Channels – How will you talk to your customers?
- Cost Structure
- Revenue Streams
For a full description of each section and to view sample business plans, check out SBA.gov!