Your business plan is the foundation of your business. It creates the roadmap, keeps you focused, and it’s what helps funders say yes to your funding requests. So, what goes into writing a business plan? Your particular lender may ask for specific information, but here are the main sections most lenders ask you to include when drafting your business plan.
Executive Summary
You may find it easiest to write this section last, because a strong executive summary sums up what readers will find in the rest of the business plan and provides an overview of your operation.
Business Description
The business description explains what your business will do, who you will serve, and who your competitors are. It describes your location and target audience. If you remember the five W’s of journalism, the who, what, when, where, and why, and you’ll ace this section of your plan.
Remember to go into detail here. Paint a picture of your business for potential investors, because this is where you sell them on the dream.
Legal Structure
What kind of business are you forming and who is going to be involved? In this section, list out the key leadership team by role and name (CEO, CFO, etc.). Mention what type of business structure you will form, such as an LLC versus a limited partnership.
Market Analysis
Since no business exists in a vacuum, potential lenders want to understand your role in the market, both locally and in terms of your industry. Research will help you point to relevant facts and figures, unpack data projections, and make the case for your strong future. Takes time to unpack the trends affecting your industry or region, the themes that matter, and the connections between the market and your offering.
Lenders will want to see how your business differs from what’s already out there, so a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) is a relevant addition to this section.
Products or Services
Your business is either selling a product or service (or in some cases both). In this section, highlight your product or service offerings.
To make the section as convincing as possible, explain how your product or service will solve a problem for your target audience. What are the benefits to customers who choose you?
If you’re creating something new, you may be investing heavily in research and development to perfect your offering. If that’s the case, treat research like your initial service and explain everything you plan to do.
Marketing and Sales
How are you going to find customers and close the deal? There are many marketing strategies, so you will have leeway to select the best approach for your business. What matters here is that you describe the intricacies of your marketing and sales approach so potential investors understand that you have done your homework.
Funding and Financial Projections
If you’re seeking funding, make your ask here. How much do you need to get your business running? Where will the money go: salaries, bills, equipment, or operating expenses?
Then outline the financial projections for the next five years. Forecast income on a quarterly or monthly basis, project a cash flow, and examine capital expenditure. Accuracy is key, so avoid the temptation to overestimate.
Supporting Materials
Supporting materials tie the other elements together you help potential funders visualize your business. You might present patents, resumes, product sketches, or even a credit report.
Knowing what a business plan contains is helpful, but you’ve still got to write it. We’ve been helping entrepreneurs and small businesses write their business plans for nearly a decade. Check out our business plan packages and give us a call.