If you have a business idea but don't where to start, this article is for you. If you have a startup that's progressing slowly or maybe needing venture capital, this article is also for you.
The business plan is one of the greatest learning experiences an entrepreneur can encounter. Contrary to popular belief, the business plan is not for investors, or partners, or banks. The business plan is for you. It's a special time for the entrepreneur to fully understand who they are, the viability of their idea, and the strategies they will use to turn their dream into a profitable reality. It reminds me of this famous quote:
He who fails to plan, plans to fail.
Over the last 12 years, I've written 11 comprehensive business plans. I have executed the strategies with success, and I've even raised over $2.5 million with them. But comprehensive does not necessarily mean long. My typical business plan is 10-15 pages.
Below I am going to provide you with the structure that's served me well this past decade. They are broken down into three sections.
Section One: Company Overview
- Customer Pain - What is the problem and how are you solving it.
- Who Are You - Mission, vision, core values, and description of business.
- Executive Team - Founders, key executives, investors, and board members (if applicable).
- Org Chart - Current staff structure. Include freelancers, part-timers, and near future positions which are currently not filled.
Section Two: Product & Operational Strategies
- Product Overview - Physical details, sourcing, supply chain, hard costs, manufacturing, packaging, shipping, and technology.
- Customer Overview - Demographics, psychographics, data, market trends and benchmarks.
- Marketing Overview - Metrics to be monitored, social, influencer, online marketing, traditional advertising, and PR strategy.
- SWOT Analysis - Strengths, weaknesses, opportunities, and threats.
Section Three: Financial Projections & Capital Needs
- 3, 6, and 12 Month Financial Projections - Include revenue, expenses, margin, and net profit.
- Competitive Environment - List at least three potential competitors, their strengths and weaknesses.
- Capital Needs (if you're looking for investors) - How much money do you need?
- Use of Funds Schedule - Exactly how you will be spending investor's money (if applicable).
- Exit Strategy - When would you like to sell and to who (if applicable)?
- Contact Information - How can investors get in touch?
All in all, your plan should never exceed 15 pages. I also encourage entrepreneurs to include photos, quotes, and even physical product with every business plan presentation.