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9 important steps to create your business plan

A business plan is a document that describes your business’s financial goals, and how you will achieve them. You can share a strong, detailed plan with potential investors, lenders, or other partners to provide a roadmap for your business’s next three-five years.

1. Write an executive summary

This page is your business plan’s first page. This page is your elevator pitch. The mission statement, brief description of products and services, and a summary of your financial growth goals should be included.

Although the executive summary will be the first thing investors read, it is often easier to write it last. This allows you to highlight the information you have identified and write other sections that provide more detail.

2. Description of your company

Next, your company description should include information such as:

  • The registered name of your business.
  • Your business address.
  • Names of key employees. Highlight the unique talents and technical expertise of members of your team.

The company description should include information about your business structure, such as a sole proprietorship or partnership. It should also mention the percentage ownership of each owner and how involved they are in the company.

It should also include information about your company’s history and current business. This section prepares you to share your goals with the reader in the next section.

3. Describe your business goals

An objective statement is the third section of business planning. This section outlines exactly what you want to achieve in the short- and long-term.

This section can be used to explain why you need the funds and how they will benefit your business. It is important to clearly explain the investment or loan opportunity and the benefits it will bring to your business.

If your business launches a second product line and you need to explain why the loan is necessary, and what you expect sales to rise over the next three years.

Read: Why 90% of startups fail and how to become profitable

4. Description of your products and services

This section will provide details about the products and services that you offer or plan on offering.

The following should be included:

  • A description of the operation of your product or service.
  • Your pricing model for your product/service.
  • These are the typical customers that you serve.
  • Your supply chain strategy and order fulfillment strategy.
  • Your sales strategy.
  • Your distribution strategy.

Also, you can discuss pending and current trademarks or patents that are related to your product or service.

5. Conduct market research

Investors and lenders will be interested in what makes your product different from the rest. Your market analysis section should include a description of your competitors. You can discuss what they do well and what you could do better. Explain to them if you are serving a niche market that isn’t being served.

Read: Here are some ways you can help local businesses

6. Your marketing and sales strategy should be outlined

This section will address how to convince customers to purchase your products and services or how to build customer loyalty that will result in repeat business.

7. Do a financial analysis of your business

You may not have enough information about your financials if you are a startup. If you have an existing business, however, you will need to include income statements or profit-and-loss statements, a balance sheet that lists assets and liabilities, and a cash flow statement showing how cash is coming into and going out.

Other metrics that you might include are:

  • Net profit margin is the percentage of revenue that you keep as your net income.
  • Current ratio: This is the measure of your liquidity and ability to repay debts.
  • The ratio of accounts receivable turnover: This is a measure of how often you collect on receivables each year.

This area is great for displaying charts and graphs to make it easier for people to understand your financial health.

8. Financial projections

If you are looking for financing or investors, this is an important part of your business plan. This section outlines how your company will make enough profit to repay the loan, or how investors will be able to return a reasonable amount.

This section will allow you to provide information about your business’s sales, expenses, and profit estimates for at least three years. Future numbers are available if you have a new loan.

Accuracy is crucial. Before making projections, carefully review your financial statements. While your goals might be ambitious, they should be realistic.

9. An appendix can be added with additional information

You should list any additional information that is not included elsewhere. This includes resumes of key employees and licenses, equipment leases and permits, receipts, and bank statements. Contracts and personal credit histories. You may consider adding a table to the end of the appendix if it is too long.

Tips and resources for your business plan

These are some tips that will help you make your business plan stand out.

Don’t be too optimistic: A local bank loan officer will likely know your market well if you apply for a loan for a business. Unreasonable sales estimates could hurt your chances of getting a loan approved.

Proofread: Grammatical, punctuation, and spelling errors can make it difficult for potential investors and lenders to see your business. You might hire a professional writer, proofreader, or copy editor if editing and writing are not your forte.


U.S. Small Business Administration’s Small Business Development Centers can be used as a resource. They offer free business consulting and assistance with the development of your business plan.

For more information about creating your business plan, you can read a recent interview by Ken Watterworth.

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