Business Plan

BUSINESS PLAN
If you intend to know what a business plan is and reasons why you need it, then
it’s time to find out how to write a business plan.
3 rules for writing a business plan:
1. Keep it short
Business plans should be short and concise.
The reasoning for that is twofold:
1. First, you want your business plan to be read (and no one is going to read a
100-page or even 40-page business plan).
2. Second, your business plan should be a tool you use to run and grow your
business, something you continue to use and refine over time. An excessively
long business plan is a huge hassle to revise—you’re almost guaranteed that your
plan will be relegated to a desk drawer, never to be seen again.
2. Know your audience
Write your plan using language that your audience will understand. Accommodate
your investors, and keep explanations of your product simple and direct, using
terms that everyone can understand. You can always use the appendix of your plan
to provide the full specs if needed. Avoid jargon or acronyms.
3. Don’t be intimidated
The vast majority of business owners and entrepreneurs aren’t business experts.
Just like you, they’re learning as they go and don’t have degrees in business.
Writing a business plan may seem like a big hurdle, but it doesn’t have to be. You
know your business—you’re the expert on it. For that reason alone, writing a
business plan and then leveraging your plan for growth won’t be nearly as
challenging as you think.
And you don’t have to start with the full, detailed business plan that I’m going to
describe here. In fact, it can be much easier to start with a simple, one -page
business plan, and then come back and build a slightly longer, more detailed
business plan.
6 ELEMENTS TO INCLUDE IN A BUSINESS PLAN

Now that we have the rules of writing a business plan
out of the way, let’s dive into the elements that you’ll
include in it.
What should you include in your business plan?
what should you skip?...
Remember, your business plan is a tool to help you build a better business, not
just a homework assignment. Here are the basic components of the business plan
you’re going to write.
1. Executive summary
The executive summary is an overview of your business and your plans. It comes
first in your plan and is ideally only one to two pages. Most people write it last,
though.
2. Opportunity
The opportunity section answers these questions: What are you actually selling and
how are you solving a problem (or “need”) for your market? Who is your target
market and competition?
3. Execution
In the execution chapter of your business plan you’ll answer the question: how are
you going to take your opportunity and turn it into a business? This section will
cover your marketing and sales plan, operations, and your milestones and metrics
for success.
4. Company and management summary
Investors look for great teams in addition to great ideas. Use the company and
management chapter to describe your current team and who you need to hire. You
will also provide a quick overview of your legal structure, location, and history if
you’re already up and running.
5. Financial plan
Your business plan isn’t complete without a financial forecast. We’ll tell you what
to include in your financial plan, but you’ll definitely want to start with a sales
forecast, cash flow statement, income statement (also called profit and loss) and
your balance sheet.
6. Appendix
If you need more space for product images or additional information, use the
appendix for those details. Let’s dive into the details of each section of your
business plan and focus on building one that your investors and lenders will want
to read.
THE EXECUTIVE SUMMARY of your business plan introduces your

company, explains what you do, and lays out what you’re looking for from
your readers. Structurally, it is the first chapter of your business plan. And while
it’s the first thing that people will read, it is generally used to write it last. Why?
Because once you know the details of your business inside and out, you will be
better prepared to write your executive summary. After all, this section is a
summary of everything else you’re going to write about. Ideally, the executive
summary can act as a stand-alone document that covers the highlights of your
detailed plan. In fact, sometimes happens that investors read only the executive
summary when they are evaluating a business. If they like what they see in the
executive summary, they’ll often follow up with a request for a complete plan.
Because your executive summary is such a critical component of your business
plan, you’ll want to make sure that it’s as clear and concise as possible. Cover the
key highlights of your business, but don’t go deep into too much detail. Ideally,
your executive summary will be one to two pages at most, designed to interest your
investors and make them feel eager to hear more.
The critical components of a winning executive summary:
One sentence business overview
At the top of the page, right under your business name, include a one-sentence
overview of your business that sums up the essence of what you are doing. This
can be a tagline, but is often more effective if the sentence describes what your
company actually does.
Problem In one or two sentences, summarize the problem you are solving.
Solution This is your product or service. How are you addressing the problem you
have identified?
Target market Who is your ideal customer? It’s important here to target a specific
market segment.
Competition How is your target market solving their problem today? Are there
alternatives?
Company overview and team Provide a brief overview of your team and a short
explanation of why you and your team are the right people. Investors put an
enormous amount of weight on the team—even more than on the idea—because
even a great idea needs great execution in order to become a reality.
Financial summary
Highlight the key aspects of your financial plan, ideally with a chart that shows
your planned sales, expenses, and profitability.

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BUSINESS PLAN

6 ELEMENTS TO INCLUDE IN A BUSINESS PLAN

THE EXECUTIVE SUMMARY of your business plan introduces your

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