Writing a Business Plan (Part 1)
Updated: Jan 22, 2021
The very first test when starting a company or organization is making your Business Plan. Every last detail about how your organization is going to start out, your goals, how you are going to grow, what the industry is like, and how you will afford it is all spelled out in this document. But, you are not just writing the Business Plan for yourself. This is a key document when talking with banks, lending institutions, investors, and other companies to show them your stability, structure, and how they can best support your success.
By creating this document, you are checking-off everything you need to know/ do to run a successful business and giving other partners confidence to get into business with you.
But again, this is your first test as a business owner. And it is a lot! To make it just a little bit easier though, this article is going to take a focused look at just the first three sections.
So, let's unpack a business plan and see what's in the box!
A Business Plan that is detailed covers everything you need to have laid out to start your business, and gives investors confidence have these 8 sections:
Executive Summary
Overview
Industry Analysis
Economics
Products/ Services
Marketing Strategy
Operations Plan
Management Summary
Each of these sections serves the purpose of outlining specific information, strategies, goals, and startup needs. In this article, we are looking at just the first three sections. What goes into each part then?
1. Executive Summary
This is a one or two page overview of your business. It says a little bit about everything your business plan will cover. It lays out what to expect from reading further and gives an initial picture of what you want to accomplish with the business.
Sometimes this is all a potential investor will read. So, it is very important to have clear and precise language that tells your story. I recommend that you write this section last so you can pull from everything else that you have written.
This should include:
1. Background and experience
a. What brought you here?
b. What are you passionate about?
c. What problem are you trying to solve?
2. Approach
a. What is your core offer?
b. What is your unique selling proposition?
3. Industry and market landscape?
a. How many businesses like yours in your market?
b. What is your market size?
i. Growth
ii. Trends
4. Conclusion summary
a. Address objections you will have and how you will overcome them.
b. Tie your narrative up in a nice bow.
2. Overview
This is the first section with real meat and depth to your company's story and description. It will be a chance to provide a clear narrative of who fully your company is, your goals as an organization, and a 5-mile up view of your structure.
What to include:
1. Business Structure - Pick one of the following (for more info check out the SBA article)
a. Sole Proprietor
b. Partnership
c. Limited Liability Company (LLC)
d. Corporation
i. C-Corp
ii. S-Corp
iii. B-Corp
iv. Close Corporation
v. Nonprofit Corporation
e.Cooperative
2. General Company Description
Follow the Why-How-What progression to give an overview of your company and what it does. Why do you do what you do? How do you do it/ what approach do you take? What exactly are your products and services.
Aim for around three sentences. It is a snapshot and focused statement of who your business is.
3. Mission Statement
What is the goal your company sets out to do?
4. Vision Statement
In a perfect world, your company wants to see what? And how will your company help that happen?
5. Core Values
List 5 guiding principles that your company stands for. This is the heart of your company. Your passion. And also the very first thing that a customer will connect with and even make you eligible for a company to buy from. At Raven & Lotus, our core values are Organic - Dynamic - Intuitive. Here are some other examples too.
6. Brand Identity
i. What are your unique services and approaches?
ii. What is quirky about you or your business. What gives it personality?
7. 3-Year Vision
a. Revenue goal
b. Net-profit
c. 5 examples of what your company will look like in 3 years
d. Your 3 Year Objective
e. 3 Year Revenue Projections
3. Industry Analysis
This space lets you provide an interview of the industry you are working in. For example, if you are a restaurant, you talk about what restaurants do, who eats there, and your competition. But here is the checklist!
1.Description
What is the definition and overview of your industry?
2. Industry Products and Services
What are typical products and services?
3. Industry Activities
What are typical activities (ex. Consulting)
4. Ideal Client
If there is any type of customer you could work with in the world, who would it be? What is your dream client?
a. Target Market
Who exactly is your ideal customer and why? Core values, pain points, goals, objections, etc.
b. Market Analysis
How much have your target markets been growing over the last 5 years and what is their 10-year growth trend? (This is typically portrayed as a data table)
c. Characteristics
How do the target markets behave? What are their buying patterns? What issues do they have? What kind of solutions do they look for?
d. Location
Where are they?
e. Demographic
Who are they?
5. Client Persona
a. Their 5 Core Values and Goals
b. Their Challenges and Pain Points
c. Their Role in the Purchasing Process and their Objections to a Sale
d. Where do they get their information?
6. Competitor Analysis
Start off really taking a deep look at who five of your top competitors will be. You do not need to write this in the plan. But, you need to know who they are. And then, pick two to compare yourself to in this plan.
In a chart, compare your company to the two competitors you have chosen. You want to look at what you do for each of these sections, your strength in that category, your weakness, what your two competitors do. This will give you a wholistic side by side picture of where you stand in your market and industry. It also lets you learn from other competitors while avoiding some of the things that might be holding them back.
Product
Expertise
Company Reputation
Location
Appearance
Sales Methods
Credit Policies
Advertising
Image Price
Once you have all of that, write a paragraph to summarize what you have found in the description of your completion. What they do well and their weaknesses. Your advantages in the market. What you bring to the table.
And that is Part 1 of your business plan! Most of your brainstorming and vision work is done! Part 1 in your Business Plan covers really who you are and what you do. At this point, you should have a clear image in your head of who your business is.
Part 2 will get more into the logistics. Looking at the numbers that support your company like profit margins, employees, market economics, and product development.
So, what's next?
Here at Raven & Lotus, we value everyone's accessibility to success. It is important to us that you have every tool possible to thrive and take wing with your business. It's your passion! And we want to see it take flight. We get so excited whenever we see members of our community do well and reach that next goal!
But we also know that sometimes there are things that get in the way of moving as fast as you want them to. When that happens, we just want to ask ~
Do you want help with that?
If the answer is yes, get in touch with us - We can do a free strategy session to explore what you can do!
And for business plans, we have a whole Free Business Plan Template that is literally plug in play. It is all formated with all the details for all 8 sections. (We also threw in the Financial Plan Template as well!) Just answer the questions we put in each section and fill out the charts. It's a very easy to use tool!
So, no matter what is next for you, we got your back and are here to help you tell your story.
Until next time! -Brett W. Sinclair