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In it’s simplest form a business plan is the formal statement of a business’s goals and how those goal will be achieved. A business plan relies heavily on financial data to support its viability. While business plans use varying formats, there are elements that every plan needs to include.
Typically, a business plan covers three to five years – it is a “work in progress.” The federal government’s Small Business Administration (SBA) is an excellent resource for people starting or running a small business and suggests that a professional business plan should contain the following sections as elements of the plan. (1) An executive summary that provides an overview of the plan; (2) A market analysis of the business; (3) a description of the company; (4) the company’s organization and management; (5) the company’s marketing and sales management; (6) the company’s service and/or product line; (7) the funding request, if appropriate; (8) the company’s financial data; and (9) an appendix.
The SBA also suggests that, if possible, the business plan should keep its focus on a unique area of a business that makes the business and the plan stand out and creates a niche. They also recommend that small business entrepeneurs find a mentor to guide them through the process of starting a business, learn the laws and regulatons that affect the business and completely understand the financial elements of the plan because cash flow and implementation are at the heart of a well prepared plan.
There are also private sector websites that offer assistance in preparing business plans and provide templates – often at a cost – to assist in completing a plan.