How to Write a Business Outline Plan Step By Step
The Business Plan Outline
There has been more talk about businesses not needing a business plan when starting out, especially if they're not asking for money. According to Carl Schramm, author of "Burn the Business Plan," many large corporations didn't have business plans when they started:
"If you look at all our older major corporations—U.S. Steel, General Electric, IBM, American Airlines—and then you look at our newer companies like Amazon, Apple, Facebook, Microsoft, none of these companies ever had a business plan before they got started."
The U.S. Small Business Administration takes a middle-of-the-road approach recognizing that not all businesses need a comprehensive business plan. Instead, it suggests a lean, simple business plan for startups that highlights the basics, or for businesses to focus on parts of a business plan that make the most sense for their business. Lean or long, your business plan should cover the basics outlined below.
Business Plan Outline
Each part of the business plan outline below offers a brief overview of what the section covers.
1. The Executive Summary
While appearing first in the business plan, the executive summary is a section that is usually written last as it is a summary of the entire business plan. It provides an overview of your business including your mission statement and details about what you offer. It's critical that your executive summary is outstanding, especially if you're seeking funding.
2. The Business Description
Provide information about the business you're starting, including what sort of problem your product or services solve, and who the most likely buyer is. Provide an overview of the industry that your business will be a part of, including trends, major players in the industry, and estimated industry sales. This business overview section should also provide a summary of your business's place within the industry, along with your or your team's expertise as well as your competitive advantage.
3. Market Analysis
The market analysis is a crucial section of the business plan, as it helps you identify your best customers or clients. In the market analysis, research the primary target market for your product or service, including geographic location, demographics, your target market's needs and how these needs are currently being met. Your purpose here is to have a thorough knowledge of the people you are planning to sell your goods and/or services to so that you can make informed predictions about how much they might buy.
4. Competitive Analysis
In the competitive analysis section, you'll learn how successful your direct and indirect competitors are in the marketplace, with an assessment of their competitive advantage and how you'll set yourself apart from them. It also includes an analysis of how you will overcome any entry barriers to your chosen market. You also need to distinguish your business from the competition, which is especially important in persuading potential funding sources that you'll be able to compete in the marketplace.
5. Sales and Marketing Plan
The sales and marketing section offers a detailed explanation of your sales strategy, pricing plan, proposed advertising and promotion activities, and product or service's benefits. This is where outline your business's unique selling proposition, describe how you're going to get your goods and/or services to market, and how you're going to persuade people to buy them.
When developing your unique selling proposition, your goal is to answer the question: Why should people buy from me over my competition?
6. Ownership and Management Plan
This section gives an outline of your business's legal structure and management resources, including your internal management team, external management resources, and human resources needs. Include experience or special skills each person in your management team brings to the business. If the goal of your business plan is to get funding, it's wise to make sure that your management plan includes an advisory board as a management resource.
7. Operating Plan
The operating plan gives information on how your business will be run. It provides a description of your business's physical location, facilities and equipment, kinds of employees needed, inventory requirements, suppliers, and any other applicable operating details, such as a description of the manufacturing process.
8. Financial Plan
Starting a business is generally about making a profit, and so having a solid sense of your current finances, funding needs, as well as projected income is important. In the financial section, provide a description of your funding requirements, your detailed financial statements, and a financial statement analysis. This part of the business plan is where you present the three main financial documents of any business; the balance sheet, the income statement, and the cash flow statement, or in the case of a new business, a cash flow projection.
9. Appendices and Exhibits
In addition to the sections outlined above, at the end of your business plan, include any additional information that will help establish the credibility of your business idea, such as marketing studies, photographs of your product, permits, intellectual property rights such as a patent, credit histories, resumes, marketing materials, and/or contracts or other legal agreements pertinent to your business.
How to Organize Your Business Plan
There is no set order to your business plan, but, the Executive Summary, as an overview, should come first. Beyond that, the order depends on your goals. If this plan is to help you gather information and create your business roadmap, organize it the way that helps you achieve your goals. It can help to have all similar content together, such as all the material relating to markets (the Industry Overview, the Marketing Analysis, the Competitive Analysis, and the Marketing Plan).
If your goal is to seek funding, organize the plan with a focus on leading with the best first. If you have a stellar group of people serving on your new business's advisory board, put that section directly after the Executive Summary. Highlighting your new business's strengths will encourage your reader to continue reading your plan.
Add a Title Page and Table of Contents
After completing all the sections, don't forget to insert a title page at the beginning of the plan followed by a table of contents listing each section with page numbers.
Table of Contents
|1. Executive Summary................................||Page #|
|2. Business/Industry Overview.................||Page #|
|3. Market Analysis........................................||Page #|
|4. The Competition......................................||Page #|
|5. Sales & Marketing Plan...........................||Page #|
|6. Ownership and Management Plan.......||Page #|
|7. Operating Plan..........................................||Page #|
|8. Financial Plan............................................||Page #|
|9. Appendices and Exhibits........................||Page #|
The Appearance of Your Business Plan Matters Too
If the plan is just for you to keep you on track, create the plan in a way that helps you achieve your goals. But if you're looking for funding or investors, the business plan is a formal document, so it should look like one. Every aspect of your business plan should impress your potential funding source.
Pay attention to margins and formatting; make sure it's spell checked and grammatically sound. If you're not good at this, pay someone who is to do it.
If you need printed copies, get them professionally printed and bound. As always, looking successful is half the battle.
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