In addition to the important details and legalities handled by your business incorporation service, your business plan is crucial, especially if you’re starting a business that requires outside funding.
As you begin to create your business plan, be sure to include the following essential elements.
1. Executive Summary
This section should include a general overview of the services or products your business will provide, as well as a brief statement of the projected return on investment. It should also include subsections detailing the company’s objectives, mission statement and advantages.
Objectives are best presented as a numbered list. Keep the list short, and make sure items are displayed in priority order.
Your mission statement should be no more than two sentences, and convey your company’s mission accurately, but without flowery speech. Make sure this statement is brief, versatile and timeless.
The advantages subsection works best as a short, bulleted list of three to five points you feel will set you apart or give you an advantage over the competition.
2. Company Summary
The introductory portion of your company summary should be a short statement of the products and services you will provide, and the method in which you will provide them. Be sure to provide the name of the city and state where your business’s operations will primarily be located.
The subsections of your company summary include some of the most important information in your business plan. In subsection one, you will need to state your company’s ownership, including whether you will be a sole proprietorship, LLC or other type of corporation, as well as the names of all official owners.
Subsection two is where much of the research comes in. It is commonly labeled as the start-up summary, and should include a bulleted list of planned equipment purchases, a budget — commonly in graphic table form — detailing other startup expenses, and another table that details your expected financing sources and total amount of financing you expect to receive. If you are using a business incorporation service, be sure to list all associated costs here.
3. Products and/or Services
This section of your business plan is generally text-based and outlines the specifics of the products or services you intend to provide. Be very detailed here, describing not only products and services, but also the methods you will use to offer convenience or added value to your customers.
If you have any specific innovations that you feel really set your business apart, be sure to explain in detail. This section is your opportunity to show your investors that you are starting a business with positive long-term prospects.
4. Market Analysis
Another research-intensive section, the market analysis will be useful for your investors, but also offers you an opportunity to research and outline your business’s potential.
Use the introduction to summarize your market analysis, and provide extended detail in the subsections. Discuss market segments in the first subsection — organized by age group, area or whatever other details are appropriate to the type of small business you are opening. Then, in the second subsection, discuss specific strategies targeted toward each market segment.
Finally, include a third subsection where you analyze your competition and provide information on the behavior patterns of your target market segments. Charts and other graphical representations are very helpful to your market analysis, and also give it a professional look that will appeal to prospective investors.
5. Strategy Summary
The strategy summary details your approach to sales and marketing. This is where you can establish a marketing budget that will make the process of starting a business much easier once your business incorporation service has completed their work and you have acquired funding.
Be sure to include well-researched forecasts here for how quickly your business will grow and how effective you expect your marketing strategy to be.
6. Management and Personnel
This section should detail the management structure, number of employees and your projected budget for operations and salaries.
7. Financial Planning
Profit and loss and cash flow projections should be detailed here. Most importantly to investors, be sure to include a break-even analysis that offers a projected timeline for getting your business in the black. Any other financial information you have not yet included in your business plan will fit well in this section.
Putting it All Together
Put the finishing touches on your business plan by printing it on high-quality paper and binding it in an attractive, professional-looking folder. If you have a logo created, use the image as the centerpiece of an attractive cover page.
Starting a business carries its fair share of challenges, but with a thorough and well-prepared business plan and the assistance of a business incorporation service, the road to owning your own small business may be just a bit easier to travel.