The essential elements of a good business plan for growing companies include the following: executive summary; market analysis; company description; organization and management; marketing and sales strategies; products and services; funding request; financials and an appendix, according to the Small Business Administration. Here is a brief overview of what the SBA says each section should include. Full details of the SBA’s advice on writing and managing a business plan are available at http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html.
Executive summary: This, the most important section of your business plan, is a concise overview of where your company is and where you want to take it. It should be written last because it should serve as a summary of the entire plan. This is the make-it or break-it piece of what you’re presenting to potential or current lenders. It will either convince them to keep reading or it’ll lead to another dead-end in your pursuit of funding. An executive summary should include the following:
• Mission statement
• Date business was launched
• Names and functions of founders
• Number of employees
• Location of business and all of its branches
• Description of facilities
• Products and services offered
• Banking relationships and information on any current investors
• Summary of company financials
• Summary of plans for the future
Market analysis: This section should describe the industry your business is in, its future outlook, the specific markets you are targeting and an analysis of your competitors. The first element is especially important if you’re seeking funds from a lender without boating industry experience. This section should include any research you have done or data you have collected about the industry and your target customers.
Company description: This section should help the reader understand how all the various pieces of your business fit together and the core reasons you expect it to be a success going forward. It should describe the marketplace needs you intend to satisfy, how you intend to satisfy them and the competitive advantages you offer.
Organization & management: This section is designed to offer information about your company’s organizational structure, ownership and management team. If you have an organizational chart, this is where to include it. You should also include the background and responsibilities of your managers and detailed descriptions of each division or department within your business and its function. You may want to include key employees’ resumes and/or a list of achievements. Finally, describe the legal structure of your business along with the related ownership information, including the names of the owners, the percentage of ownership they hold, the extent of their involvement with the company, the forms of ownership (common stock, preferred stock, general partner, limited partner, etc.), outstanding equity equivalents (i.e. options, warrants, convertible debt) and common stock (i.e. authorized or issued).
Marketing & sales strategies: This section should include your strategies for growing your business, communicating with current and potential customers, gaining new and/or retaining current product lines and selling your product. You’ll also want to include information on sales training, sales team compensation and identification and pursuit of prospects.
Products & services: In this section, you’ll describe the products and services you offer, the benefits each offers to current and potential customers (compared to those of your competitors) and how that fulfills the needs of your market, as well as any plans to add new products. Here is where you might describe your relationship with your suppliers and the availability and costs of your products and services.
Funding request: This is where you will request the amount of funding you’ll need to expand your business. You’ll want to include your current funding requirement, future funding requirements over the next five years, how you will use the funds you receive and any long-term financial strategies you are planning that will impact your funding request.
Financials: This is where you will supply historical data related to your company’s performance over the past three to five years, including income statement, balance sheets and cash flow statements for each year. In addition, you’ll provide financial projections for the next five years, including forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets. For the first year, the projections should be monthly or quarterly. For years two through five, you can move to quarterly or annual projections. If these projections are made based on certain assumptions, share those assumptions within this section so readers are not left guessing. You may also want to graph out any positive trends you wish to emphasize.
Appendix: This section might include any of the following:
• Credit history
• Resumes of key managers
• Product pictures
• Letters of reference
• Details of market studies
• Relevant magazine articles or book references
• Licenses or permits
• Legal documents
• Copies of leases
• Building permits
• Lists of business consultants, including attorney and accountant