How to Make a Business Plan

Image of company of successful partners discussing business plan at meeting

Once you've decided to start your own business, the first thing to do is make a business plan.

A business plan is a blueprint for starting and growing a successful business. Following are elements of a good business plan.

Introduction

The mission statement is a short statement of what the business is, who it serves, why you are in business and how you will conduct that business.

The executive summary includes the business name, location and description of product or service. State projected sales, keys to success and a brief description of how your product relates to market demographics and competition.

The business section

Describe the business. Be specific. Instead of saying "I want to start a remodeling company," say "I want to start a remodeling company that focuses on kitchens and bathrooms."

Include specific goals of where you want to be in one year, three years and five years.

Explain how you intend to get there. For example, "In one year I want to hire another crew and expand to the west side of the city."

State the number of personnel. This may be one person initially, with plans to add three more in the first year. Be realistic in your projections.

Include resumes for yourself and any partners. List your experience and how it will be applicable to your business.

Competition, marketing and expansion

Analyze the competition. State why there is a need for your business, citing demographic information on potential customers.

Explain how you will market your business to potential customers. How and where will you advertise? Why? In what type of promotional activities or public relations events will you participate?

State any plans for expanding the business, along with a time frame.

Financial

Include where your start-up money will come from. What is the projected revenue in one year, three years and five years? What assumptions did you make in determining revenue?

Provide a detailed list of anticipated expenses for one, three and five years. In addition to obvious costs such as personnel, include costs for permits, licenses and training.

Exit strategy

How you plan to exit will affect your business decisions. If you plan to sell the business, you may incur added cost for training personnel. If you plan to sell to investors, you may incur higher costs for management personnel. These factors need to be taken into account when writing your business plan.

State why there is a need for your business