Writing A Business PlanNov 18, 2021
Understanding the 8 parts of Writing a Business Plan
There is so much to decide after acquiring your new certification. It is time to take a step back and write some clear goals. What are your plans for this certification? Are you planning on starting your own business? If so, what kind of business are you going to do brick and mortar or online? After making those decisions the next major step is writing a business plan.
A business plan is an absolute must for a small business and will be the road map of the business future. Today we will discuss, What is a business plan, the purposes of a business plan, and the 8 parts of a business plan.
What is a Business Plan?
A business plan is a written document that gives a target for the business to stay on track. These business plans define and guide the goals and steps needed to be successful. Very simply stated the business plan answers the basic 5 W’s - Who, What, Where, When, and Why. This plan will be used in your business to attract others to work with you. This will be your road map or guide to define your management. A Business plan is the “big picture” of your business.
Business plans are also very important to help define the soundness of your business idea and help you to start navigating to plan for competition and finances. According to SBA.Gov a business plan should not have a minimum amount of pages in length, but instead should be written according to the target audience. The Small Business Administration has different templates depending on your needs. There is a traditional business plan template that I used from the SBA.gov guideline and added the minimum pages and it totaled to 38 and the total for the maximum pages was 79. I also looked at the Lean Business plan template and it can be as simple as 1 page. A good thing to keep in mind is that a business plan is not a one time document, but rather a living document that gets visited and revised yearly or as needed.
Purpose of a Business Plan
Now that we have a better idea of what a business plan is, let’s look deeper into the purpose of a business plan. There is more than just one purpose of a business plan an important element is to help roadmap future growth and possible disadvantages of ideas and to be able to modify. It is vital to begin to calculate and plan for financial needs and demands. This plan is intended to keep you on track and help you to reach your goals. It should be written with a 3-5 year plan in mind. Of course, a huge purpose of a business plan is to acquire a loan or investment for your business. A well-written business plan can be the exact thing that gets the loan or start-up investment for your company. Think of it as an introduction of your business to banks and potential investors. This business plan will give insight into the goals and financial support needed.
8 parts of a Business Plan
Ready to start drafting your plan? Let’s now briefly go over the 8 parts of a business plan: Executive summary, Company Description, Marketing Research, Products and services, marketing strategy, financial, Long term goals, and appendix. Keep it simple and answer the 5 W’s in each part. These parts can be answered in a few sentences, paragraphs, or pages. You are in control of your business plan.
- Executive summary- is an introduction to your business detailing what it is and how it can help and benefit others and who your target audience is.
- The Company description part is where you will want to write your mission statement and the structure of your organization.
- Marketing Research is a huge and important part of this plan. This part will refine your target audience, the competition, and also strengths and opportunities. Here you will list and answer questions on how to attract customers, how to advertise, and where to market.
- The products and Services part is pretty straightforward, what are you offering, what are the price and benefits?
- Marketing Strategy- how do you plan on reaching your customer? Does your budget line up with the strategy?
- Financial- how much money do you need to startup? This will detail how much you need and how you plan on repaying any investors or loans. Also, your financial projections include graphs and charts. This section is the most critical and usually reviewed by your accountant.
- Long-term goals- it is important to add details of the long-term goals of your business and to be detailed in attaining those goals and what the future of your business looks like in 3-5 years. Include all the previous parts in a future outline.
- Appendix- Any additional information that you feel is relevant to your plan.
Starting your own business is so exciting and rewarding. You now know what a business plan is, the purposes of a business plan, and the 8 parts of a business plan. You are ready to create your first draft. Start simple by answering the 5 W’s and really define your road map or “big” picture” of your business. Remember this is a living document that you should revisit and revise regularly. It may be helpful to get a friend or colleague to proofread and give feedback. It also may be helpful to take this plan into parts and not let it overwhelm you. If you're looking for a good video that discusses writing a business plan check out Michelle Young, CEO of My Vinyasa Practice as she discusses writing a business plan. I wish you much success in your new endeavor!