Jennifer Lee, author of The Right-Brain Business Plan: A Creative, Visual Map for Success, believes that writing a business plan can and should be a fun and creative process.
She writes, “I used to think that creativity and business were worlds apart…Once I fully embraced entrepreneurship, I understood that creativity and business go hand-in-hand, beautifully,” and sets out to prove that small business owners can actually have fun mapping out their success.
An Essential Road Map
The U.S. Small Business Administration describes a business plan as an essential road map for business success and a living document that generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues. Even though every business plan is unique, most contain the subsections summarized below.
- Executive Summary
Often considered the most important part of the business plan, the executive summary is a 1-2 page snapshot of the entire business plan that briefly outlines the company profile, mission, financial information, and mission statement.
- Company Description
The company description details what the business does and how it meets specific marketplace needs. This section also defines the company’s competitive edge.
- Market Analysis
The market analysis of a business plan illustrates industry and market knowledge, research findings, and conclusions. Here the author gives information about his target market; his organization’s distinguishing characteristics; the size of the primary target audience; pricing and gross margin targets; competitive analysis; and regulatory restrictions.
- Organization and Management
In addition to offering details about the ownership of the company, the Organization and Management section of a business plan offers profiles of the management team and the board of directors.
- Service or Product Line
One of the main reasons behind writing a business plan is to showcase the unique products and services the company offers. Also included are details about product life cycles, intellectual property, and research and development activities.
- Marketing and Sales
The purpose of the Marketing and Sales section is to define the company’s marketing strategy, including market penetration, growth, channels of distribution, and communications.
- Funding Request
If an entrepreneur is writing a business in order to request funding, then a Funding Request section is necessary. This section should include present and future requirements as well as the intended use of all funds received.
- Financial Projections
The Financial Projections section of a business plan shows historical and prospective financial data. Creditors want to see what business owners expect the business to be able to earn within the next five years. Financial projections should be consistent with funding requests.
The components of the Appendix section are optional, but they should definitely include information that will allow creditors and investors to make lending decisions, such as resumes for key managers, product pictures, reference letters, licenses, permits, patents, legal documents, copies of leases, building permits, and other pertinent information.
Resources and Help for Writing a Business Plan
There are several resources available to entrepreneurs who are writing a business plan. The SBA offers a free business plan writing course and a complimentary online tool that allows users to create a business plan online and then export it as a PDF document.
Also, Palo Alto Software, a leader in business technology, produces the Business Plan Pro series. This user-friendly business plan software kit includes over 500 sample business plans and built-in calculations and automated charts and graphs.