What should a business plan include?
Table of Contents
Every business needs a plan to succeed. A business plan is a crucial document that gives you and interested parties (like investors or lenders) a description and overview of your company’s future. At its most basic, your business plan should explain who you are, where you want to go, and how you plan to get there.
So, what details should a business plan include to convey this information? This guide will explain why your business plan needs the following elements:
- Executive summary
- Company description
- Competitor and market analysis
- Details of organisation and management
- Breakdown of products and services
- Marketing and sales
- Funding requests and financial projections
What should a business plan include?
Use a combination of these nine elements to create your business plan.
- Executive summary
The executive summary appears first in your business plan and highlights what you’ll discuss in your business plan to give the reader an idea of what to expect. Since it’s a summary of what’s to come, it’s best to write it last to make sure you include all the important parts.
A good executive summary is engaging from the first sentence, revealing your company’s mission and sharing details about your products or services. It might be good to explain why you’re starting your business and share details about your experience in the industry.
- Company description
After your executive summary, you include a company description that includes key information about your business, goals and target market. Use this section to provide a detailed description of your company, including the problems you solve and who you solve them for.
Explain your competitive advantages that will make your business succeed. Your company description is the best place to boast about your strengths and abilities.
- Competitor analysis
A good business plan will also include a section that describes how your business will compete against your competitors. Use this section to prove your knowledge of the industry, breaking down other companies’ strengths and weaknesses.
This section aims to demonstrate how your business will measure up and explain if anything will prevent you from jumping into the market. Examples of such obstacles could be high upfront costs or complicated supply processes. Whatever it is, you need to be honest about it. The competitor analysis is part of your market analysis, which we’ll cover in the next section.
- Market analysis
This section is to show readers that you understand the industry and specific market you want to enter. You’ll explain how your unique strengths will fit into the market and back it up with data and statistics about industry trends and themes.
Include information about how other businesses are succeeding and failing, and use the analysis to visualise your target customers. Above all, your analysis should demonstrate how your business will provide value in your target market.
- Organisation and management
Here you’ll explain how your business will be structured and managed. Describe the legal structure of your business: will you be a sole trader or run a limited company?
Use an organisational chart to lay out how you’ll manage your business, including if you plan to eventually hire staff or if you’ll go it alone the entire way. The more details you can provide, the better an overview the reader will get.
- Breakdown of products and services
While you’ll include a description of your products or services in your company description, this section will give the reader all the details they need. This section should include a complete description of what your business creates and sells. Explain how long they could last and how they’ll meet the existing demand in the market.
You should also mention your suppliers (if you have any) and other key information like how much it’ll cost to make your products and how much you hope to make from them. If you have any patents or copyrights, this is where you list them.
- Marketing and sales
This section is where you explain how you’ll attract and retain customers, including how a sale will actually happen. You’ll need to refer to this section when you make financial projections (we’ll cover this later), so be thorough when describing your marketing and sales strategies.
Break down the steps you’ll take to promote your business and the budget you’ll need to implement your strategies.
- Funding request
If you need funding, this section is where you outline your funding requirements. Clearly explain how much funding you need over the next few years and what you’ll use the money for.
You’ll need to specify the type of funding you want, such as the terms you want to apply and the length of time your request will cover. Explain if you need funding to buy equipment or materials, cover specific bills until business picks up, or if you need it for something else. Always include a description of how you plan to pay off your debt as well.
- Financial projections
In this final section, you’ll break down the financial goals and expectations that you’ve set based on your market analysis.
Report how much you anticipate to make in the first 12 months and your projected earnings for the second, third, fourth and fifth years of business. If you’re applying for a personal loan or small business loan, it’s a good idea to include an appendix or added section that provides additional financial or background information.
Now that you know what to include, you should have all the tools you need to create a solid business plan.
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