A Comprehensive Guide on Writing Your Business Plan: What You Need to Know

No matter which type of business you start, the truth is that you need a business plan. It serves as a roadmap throughout the lifetime of your business and will clarify what actions you need to take in the future.

Some business owners place enough focus on it and some don’t, but the truth is that all of them have to.

In this article, we’ll show you a brief overview of how you can write your business plan and what you need to know.

1. Executive summary

The executive summary of your business plan is the most important part since it provides a general overview of your business and leaves a first impression on the reader. Regardless of what you’re pitching to investors, potential partners, or anyone else, your executive summary should clearly outline your goal's value proposition and financial potential.

Your executive summary should be from 1 to 2 pages long, and it should include the following information:

1. Business name & location
2. Mission & vision statement (long-term goals of your business)
3. Products & services
4. Target market (who your customers are)
5. Competitive advantage (why you are different from your competitors)
6. Business model & revenue streams
7. Financial highlights
8. Growth plan & milestones

A strong executive summary makes your business plan stand out from the rest. It should leave a good first impression, capture interest, and provide essential details.

2. Business description

Your business description provides a clear and concise overview of your company. It not only explains what you do, and who you are but also explains why your business matters. This section is important for attracting investors, partners, and customers who need to understand your value proposition.

Similar to your executive summary, a well-structured business description needs to cover the following information:

1. Business name & legal structure
2. Location & operations
3. Business industry
4. Products & services
5. Mission & vision statement
6. Business history
7. Competitive advantage (what makes your business unique)

When writing your business description, it’s important to highlight how your business solves problems, to be specific about what your business does, and to include key data & milestones you achieve to attract investors and partners.

3. Market analysis

A market analysis is a key selection of your business plan that outlines your industry, target audience, competitors, and growth potential. This research-backed section guides your marketing strategies, pricing models, and business positioning.

A strong market analysis should include this type of information:

1. Industry overview: Trends, size, and the projected growth of the industry you are in. For example: it currently stands at 100 million, but is expected to grow to 1 billion in the next five years.
2. Target market: Who are your ideal customers? You need to include behaviors, demographics, and pain points.
3. Market demand: Is there a need for your product or service? What problem are you solving?
4. Competitive analysis: Who are your competitors? What are their strengths and weaknesses?
5. Market trends & opportunities: Emerging industry changes, tech advancements, and evolving customer needs.
6. Regulatory factors: Any legal or compliance requirements that affect your industry.

Your market analysis will guide you in your industry and it’s always important to know which direction your business is heading.

4. Organization and management structure

The organization & management structure section of your business plan outlines your company’s leadership, roles, and operational hierarchy. This section is important for investors, lenders, and stakeholders since it shows who is responsible for key decisions and how your business is structured.

When writing your organization & management section, the most important information you should include are:

1. Your business structure: You need to clarify whether your company is a sole proprietorship, partnership, limited liability corporation (LLC), or corporation. This helps you know how to organize your data.
2. Ownership details: If two or more people own the company, you need to state each of their roles that contribute to it.
3. Management team: List all key executives, their responsibilities, and expertise.
4. Organizational chart: Include a visual representation of your company’s structure.
5. Advisors & consultants: Are there any external experts, mentors, or board members?

When writing this section, use tables and charts to ensure better readability and highlight all the expertise of your management team.

5. Products and services

Your products & services section highlights your business plan and shows what you offer, how it benefits customers, and what sets your business apart. This section is essential for attracting investors, partners, and customers since it clearly defines your value proposition.

When writing your product & services section, it’s important to include the following information:

1. A clear description of your product and services, firmly showing what you sell or offer.
2. Highlighting the key features & benefits of your product and service and how it solves customer problems.
3. State your unique value proposition (UVP) and highlight what makes your offerings stand out.
4. Clarify your pricing strategy and how you price your product or service
5. Showcase your product/service expansion and if you have any plans for growth or new offerings.

For example, let’s say you run an environmental consulting business. You can say that you offer custom sustainability solutions to help businesses reduce their carbon footprint, comply with regulations, and improve environmental efficiency.

Your pricing strategy can be subscription-based, for example: $49 monthly per business.

6. Marketing & sales strategy

Your marketing & sales strategy part outlines how you will attract customers, promote your brand, and generate revenue. The most important information that you need to include in your marketing & sales strategy are:

1. Your target audience: Defining your ideal customers and their needs. For example: Business owners and executives aged 30-60.
2. Brand positioning: Explaining how your business stands out in the market. Example: We are a tech-driven, affordable, and results-oriented sustainability consulting firm.
3. Marketing channels: List all the platforms that you’ll be using while your business is operating (social media channels, website, paid ads, etc.)
4. Sales strategy: Describing the process of converting leads into customers. For example: Holding one-on-one strategy sessions with your customers, offering incentives for existing customers who refer new clients, etc.
5. Pricing model: Will you charge based on a fixed price, hourly rate, or project-based model?
6. Customer retention plan: Explaining how you’ll keep your customers loyal. For example: offering discounts for long-term clients, dedicating consultants for each client, monthly reports for premium customers, etc.

Your marketing & sales needs to be necked down to see what kind of strategies you’ll follow and the platforms you’ll use to make this possible. This will strongly depend on the industry you are in and what your goal is.

7. Outline your financial plan

The financial plan section is one of the most important parts of your business plan since it outlines your projected expenses, revenue model, funding needs, and profitability timeline. Investors and lenders will always carefully review this section to assess the financial viability of your business and decide if they want to work with you or not.

Every time you write a financial plan, it’s important to include the essential information such as:

1. Startup costs: All the costs associated with the expenses to launch your business. This includes your office space and equipment, marketing strategy, software, licensing fees, working capital, and initial inventory (if applicable).
2. Revenue model: How your business is generating income. For example: Let’s say you are an environmental consulting agency, you can generate income through sustainability audits, AI-powered carbon tracking software, certification assistance, etc.
3. Projected financial statements: Income statement, cash flow statement, and balance sheet. After you’ve added the estimated profits and misused the expenses, you can project your end-year revenue. For example: Total Projected Revenue (Year 1): $600.000.
4. Break-even analysis: The point where your business starts making a profit. For example: After four months, my break-even point in revenue will be $50,000.
5. Funding requirements: If you are thinking of asking for funding, outline how much and why you need it. For example: Our funding requirements are $50,000 and we’ll use these funds to set up our office, establish our marketing & advertising strategy, software development, and acquire the necessary licenses, and ensure legal compliance.
6. Financial growth strategy: Includes how you plan to scale and increase your profitability over time. For example: In 2 years, we’ll increase our marketing budget by 20% and launch an AI-powered mobile application.

These are all projections and while they aren’t always 100% accurate, the whole story here is to make sure you’re headed in the right direction.

Let’s start writing your business plan

Now that you’ve gathered all the important information you need, it’s time to get ready to write your business plan and what better way to do so than to start using this comprehensive guide we’ve set up for you.

A business plan is a one-time document that allows your business to evolve and grow. Regularly updating and reviewing your plan to adapt to market changes, seize new opportunities, and refine your strategies for continued success.

With the right planning and execution, your business can easily thrive in a competitive landscape.