What is a Business Plan?  

A business plan is a document that explains a business’ objectives, the market it is in and how it intends to achieve its goals. It is a roadmap that details each stage of the business. A good plan will lay out the resources required and forecast financial results over a reasonable period. It will also describe the unique qualifications of the founder and management team. These plans can help businesses secure funding or attract new business partners. 

Benefits of a business plan 

A sound business plan is needed when seeking external funding from banks, angel investors, and venture capitalists. Creditors and investors will take your plan more seriously when it is comprehensive, describing key elements of starting and running the business such as identifying your customers and outlining how you will turn a profit.   

Other reasons to develop a solid plan: 

• A reality check and blueprint 

  • Writing a plan helps you to think through the key elements of your business. 

  • You will consider assumptions such as value proposition, competitive differentiation, staffing, partnerships and finances. 

• Seeking advice 

  • When you provide details of your plan to experienced outsiders for a review, they will be able to help you identify missed opportunities, invalid assumptions, overly optimistic projections and other weaknesses. 

• Financial projections that can be used as an initial budget 

  • When actual results fall short of planned results, it will prompt you to investigate and take corrective action.  

Key elements of a business plan 

A business plan typically comprises the following elements. Use the sections that make the most sense for your business and your needs.  

1. The Executive Summary 

• Mission and organisational goals  

• Discussion of your business model and projected revenue 

• Overview of your products and services 

• Summary of your management team 

• Overview of the market you are competing in  

• How much capital you need to raise and why 

2. The Company: An Overview 

• Organisational and management structure 

• Operational and management policies 

• Description of products and services  

• Overview of trends in the industry and marketplace  

• Your company’s competitive advantages and weaknesses  

3. Products and Services 

• Key products and services currently offered  

• Special features, strengths and limitations of each 

• Anticipated products and services (future product development) 

4. Market Analysis 

• Detailed description of the markets (size, trends, growth, etc.) 

• Analysis of key competitors (and how your business model will evolve when faced with new competitors) 

• Analysis of key customers (current and anticipated) 

• Market research supporting product lines (current and anticipated) 

• Analysis of your competitive advantage  

5. Marketing Strategy 

• Strategies to acquire customers (current and anticipated) 

• Pricing policies and strategies 

• Advertising and public relations plans and strategic alliances  

6. Financial Plans and Strategies 

• A balance sheet, a break-even analysis and a cash flow statement 

• Projected financial forecasts for three to five years 

• Working budgets and how capital will be used  

7. Appendices 

• Resumes of the management team 

• Organisational chart 

• Timelines for completion of goals and objectives 

• Copies of key documents and contracts 

• List of customer and professional references  

References  

Harvard Business Review Entrepreneur’s Handbook: Everything You Need to Launch and Grow Your New Business. Boston, Massachusetts: Harvard Business Review Press, 2018. 

Sherman, Andrew J. Raising Capital: Get the Money You Need to Grow Your Business. New York: American Management Association, 2012.  

U.S. Small Business Administration. “Write Your Business Plan”. Accessed June 30, 2021. https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan