Business Planning 101

Want to jump straight to the workbook?

You are tired of waiting on the sidelines, watching others turn their dreams into reality.  You are ready to take the plunge and become an entrepreneur.  But where do you begin?  How do you go about starting your own business?  And that, my friends, is the big question.

Like most things, you need to start with a realistic plan to help you create the foundation of your new enterprise.  This foundation becomes your road map and guide to building your business one step at a time.  This applies to any entrepreneurial endeavor from any industry.  Starting your own business is not something you can do on the fly.  Leave the “I can just wing it” attitude at the door because that already sets you up for failure.  Like we always say at Cowe Communications, preparation is vital.  It takes thought, effort, and time; those pieces cannot be skimmed over.  

A well-written, thoroughly researched business plan identifies what your business is, who your target audience is, the needs you’re fulfilling, and your growth potential.  It’s also a way to attract future investors.  Ready to take a deep dive into planning your business?  Then let’s begin!

An effective business plan consists of the following elements: executive outline and summary, company history, market analysis, strategic objectives, sales and marketing plan, company management summary, and investor proposal.

Executive Outline and Summary

This is an overview of the most important parts of your business plan:  company description, products and services, mission statement, value proposition, market analysis, and a summary of the 3-year financial projection.  Keep in mind that this is an overview.  Keep it short, sweet, and engaging.  Choose your words wisely.  This is a chance to show your reader you have thought through every detail and scenario.  State your goal clearly—that is, what this entire business plan is about.  Remember:  Though the business plan is written in the third person, be authentically you.

Company History

This section gives the reader a detailed, intimate look into your company’s profile.  It includes the date the business was founded, the history of the company, the legal structure and ownership, the mission statement, the vision statement, the management team (including job description, duties, and responsibilities), and any location of facilities that exist.

When writing this section, pay attention to details.  Give as much information as possible without being too over-descriptive. Also, remember there’s a difference between mission and vision statements.  Sometimes, this gets confused as the same, but it is not.  A mission statement expresses the company’s purpose, what you provide, and to whom you provide your goods and services. Make it short, powerful, and unique.  A vision statement talks about your business’s impact in the next five or ten years once your mission statement is accomplished.  Make this inspiring and passionate!

Overview of Services and Products

This is your opportunity to describe your company’s offerings in-depth (and in great detail).  Show the need for your services or product and illustrate how you will fill that need.  Be specific and concentrate on your value proposition and how these products or services will ultimately benefit your customers.  Provide relevant data and evidence that reinforces and supports your offerings.  Include testimonials if and when possible.

Market Analysis

Identify your audience.  Show precisely who you will be serving with your products and services.  Describe who they are, what they do, when they are most likely to buy, where they will buy, and how it benefits them (value proposition.) Show the potential market’s size, their buying habits, and what they would be willing to pay for your goods and services.  

A competitive analysis is also a critical component. Be sure to describe your main competitors, their strengths and weaknesses, and how you uniquely differ from them in the marketplace.  Show emerging trends and establish yourself as ahead of the curve or firmly placed in the right place and time.

Add graphics to break up the blocks of text.  These visual aids can make the analysis more exciting and impactful.  Make sure the data you collect supports your mission, vision, and value proposition as well as aligns with your goals and objectives.  Gather data from sources such as Google Trends, Bureau of Labor Statistics, U.S. Census Bureau, Trade associations, Industry publications, and city, state, and federal databases.

Strategic Objectives

In this section, describe your business goals and how you plan to achieve them in the next three to five years.  Detail initiatives and measures that will set you up for success.  Strategic objectives should include financial goals, customer goals, internal operational goals, learning and growth goals, and future goals.  Show how you are going to achieve your goals through strategic actions.  

Use this formula to define your objectives:  action + description = result.  Make your objectives SMART: Specific, Measurable, Actionable, Realistic, and Timebound.

Sales and Marketing Plan

These are strategies for raising awareness and engagement about your services. Based on your market analysis from the previous section, focus on the 5Ps: Product, Place, Price, Promotion, and People. Show how you will target, attract, and delight your customers with your products and services.

Company Management Summary

Detail the company stakeholders and people responsible for the management of the business.  Include the bios and information for the founder, the team members, the board members, and the advisors.  Show how everyone is connected to the strategic objectives and their part in achieving your goals.

Growth is important to a business plan. This holds for the people described in this summary.  Detailed opportunities for growth as well as the potential for new hires.

Investor Proposal

This section is necessary if you are raising capital with an investor. Investors are usually not experts in your work, but they expect you to be. Do not overly complicate this section, trying to impress anyone with technical jargon or complicated scenarios. You are simply showing investors what they are investing in, why their investment will help the business (and its customers) succeed, and when they will get a return on their investment.

Five-Year Financial Statements and Charts

Financial projections show cash flows, income, liabilities, and balance sheets. If loans are to be repaid, those numbers will be found, along with payroll, rent, insurance, marketing costs, and more. You will focus on three key financial statements: Income Statement (Profit & Loss Statement), Balance Sheet (Assets and Liabilities), and Statement of Cash Flow (Inflows and Outflows of Cash).  Other financial statement components include sales forecast, operating expense, payroll Expense (if applicable), amortization and depreciation, cost of goods sold (COGS), and break-even analysis.

In summary, the business plan is at the heart of your business’s success. This guide is meant to help you start a deep dive into the venture of your dreams and make it a reality. Check out our companion worksheet here.

For any questions, our team at Cowe Communications can help steer you in the right direction.  Visit our website for more information.