Since so many small businesses start in a spare bedroom or a garage, they may not have ever developed a formal business plan. But once your business begins to grow, a formal, expanded business plan is essential – especially when you apply for financing. Here are its basic components:
- Executive Summary. The first section, typically written last, gives an overview of all other sections in the business plan.
- Company Description. Outlines vital facts about your company, such as your location and size, what you do, and what you wish to achieve.
- Products or Services. Describes products and/or services you're selling, emphasizing their value to customers.
- Market Analysis. Overviews your marketplace and industry, including statistics to support your claims.
- Marketing Strategy. Explains where your business fits into the market and how you’ll price, market and sell your product or service.
- Management Summary. Describes how your business is structured, your team members and external resources, and how the business is managed.
- Financial Analysis. Shows your business’s revenues, how it’s financed, the funding you’ll need to grow, and an estimate of your operating expenses.
- Appendix. Graphs, charts, statistics, research, and other relevant data that supports statements in the other sections of your business plan.