Starting a Business? Here’s What Should Be In Your Business Plan

Starting a business is a real challenge. Even with a great idea or a unique product, securing backers or funding can be difficult without a well-written business plan. A strong business plan acts as a roadmap, outlining your venture's goals, strategies, and expectations. Here’s what an effective business plan should include and how to create one that will impress investors and help your business succeed.

Executive Summary

The executive summary is central to your business plan. It serves as a brief overview of the entire document, so it needs to be engaging and concise. Investors will review the executive summary to decide whether to read the rest of the plan. It should include:

• A brief explanation of what the business does and the needs it meets.
• Market analysis, including opportunities and challenges in the potential market.
• An explanation of the ideal customer and how you plan to reach them through your marketing efforts.
• Competitor analysis.
• Income and expenses projections for the next three to five years, along with your financial forecasts.

Business Description

The business description provides more detail about your company's name, legal structure, vision, and goals. This section should include:

• The name and address of your business.
• A brief history of the business.
• The legal structure of your business (LLC, corporation, or partnership).
• The type of business you operate.
• The products or services you offer.
• The company's plans and objectives.
• A mission statement outlining your business's goals.

Market Analysis

Your market analysis should be grounded in thorough research and provide detailed information about your target audience. Investors will want to know the market size, growth potential, and how your products or services will address specific problems. This section should include:

• An overview of your business.
• The size of your target market.
• A profile of your ideal customer.
• Current trends and conditions in your industry.
• Challenges and opportunities in your target market.
• A breakdown of your competitors’ strengths and weaknesses.

Marketing Plan

The marketing plan outlines how you intend to attract and retain customers. It should cover:

• Your unique selling proposition.
• Your pricing strategy.
• Distribution channels.
• Marketing tactics, including advertising, public relations, and social media strategies.
• Sales plan and customer acquisition methods.
• Metrics to measure the effectiveness of your marketing efforts.

Competitor Analysis

In this section, list your key competitors, highlighting their strengths and weaknesses, as well as what sets your business apart. Include:

• A list of your competitors.
• An overview of their products and services.
• Their strengths and areas for improvement.
• Barriers to entry in your industry.

Management and Operations

Here, describe the individuals who run your business and how it operates. This section should include:

• Names of key management personnel.
• Their roles and responsibilities.
• An organizational chart.
• Job descriptions for essential positions.
• Details on manufacturing or production processes.
• Information on inventory, sales, billing, and management systems.

Cash Flow Projections

This section outlines your expected revenue and costs over the next three to five years. Include:

• Revenue estimates based on market research and assumptions.
• Cost of goods sold.
• Operational expenses.
• Marketing budget.
• Cash flow plans.
• Profit and loss projections for the next three to five years.

The Bottom Line

Writing a business plan can be challenging, but it is a crucial step in starting a business. Your plan should be well-researched and comprehensive, providing investors with a clear understanding of your business idea, strategy, and financial outlook. If executed effectively, it can significantly contribute to your growth and success. Invest the time and resources necessary to create a strong business plan. Once your business is operational, Merchant Capital can help you elevate it to the next level with fast and effective funding. Contact us to learn more.

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