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Business Plan Basics

There are a million things to do when you’re starting a business. And this is one of the most important: Developing a sound plan for your business. It will help you clarify your goals and objectives. It will serve as a step-by-step roadmap to the future. 
No question about it. A sound business plan is important whether you’re already running a business or planning to start one. But let’s face it. If you’ve never developed a business plan before, it can seem like a major challenge. That’s why we prepared this quick reference guide. It will help you develop a sound plan for your business. 

First things first: Understand the big picture

There are a lot of ways a sound business plan will help your business. First of all, it will clarify your thinking, sharpen the focus of your business strategy, and make sure that your decisions are aligned with your goals. In that sense, it’s a valuable roadmap that will help you get where you want to go.

But there’s another very important use of your plan. It will help you convince potential partners, investors, lenders, and key vendors that you have thought through all of the major issues. And you have an effective game plan in place that will help you succeed.

Those are some of the major reasons why a carefully developed business plan is an essential requirement in the business world today. 

The anatomy of an effective plan

Now let’s take a quick look at the basic structure and content of an effective business plan. Then you’ll be ready to start developing your plan right away.  

These pages come first. And they’re very important. After all, they’re the first pages any reader (including a prospective investor or lender) will see.

But don’t worry. The Cover Page just includes basic information with your company name and contact information. So you can create one in five minutes by following a standard template.

The Table of Contents provides a detailed list of all the topics covered in your plan. So it gives readers a quick overview of the content. It also helps people quickly find specific information as long as you remember to number your pages.

  • Here’s a quick tip. Write your entire plan before you tackle the Table of Contents. That will help you save time on unnecessary revisions.

In a world where people have short attention spans, a short, easy-to-read Executive Summary is essential. So describe your business. Explain your motivation for starting it. Talk about the keys to your success. Then summarize the other major points in your plan.

  • One piece of advice. Try to keep your summary to just a few paragraphs. 

Of course, that may take some writing and revising time. And you may need help to hone it to perfection. But when you’re done, you will be able to clearly communicate the vision and strategy behind your business.

Here’s your opportunity to give a quick overview of your business. You’ll want to talk about the history behind your business and describe your basic management and operational structure.

You’ll also want to include the names and contact information for all owners. And don’t forget to mention your key employees, too. That’s all there is to it.
The success of your business depends on the products and services you provide to your customers. So you’ll want to include detailed descriptions of your offerings, including your pricing. It’s a key part of your business plan.

It’s also important to explain why your products and services are unique. And why customers will buy them. Don’t forget to mention your sales goals, too.
Satisfied, loyal customers are the key to the business success. In fact, the famous business writer Peter Drucker once said that the purpose of a business is to “create a customer.” 

That’s why you need to devote a very important section in your business plan to a discussion of your customers. Who are they? Why will they want to use your products or services? Why will they want to do business with you instead of your competitors? 

If you think through all of these issues in advance, you should be able to write about your target audience with ease. And there’s a side benefit well. Your work on this section will help you sharpen the focus of your ongoing marketing efforts.
Now that you have painted a clear picture of your customers, it’s time to talk about the business environment. Who are your major competitors? Is there a clear leader in the marketplace? Or is it a fragmented market with many small competitors? 

You’ll also want to discuss the competitive advantages you bring to the table that will help you grow your business and gain market share. You may event want to talk about how you’ve grown your business with your existing customers. It’s a great way to prove the effectiveness of your current business strategy.

Don’t let the title of this section scare you. It’s simply a way to bring in some facts and figures from the local and national economy that support the business case for your business.

If you’re a home builder, for example, population growth in your area would be a good fact to add. If you offer services to senior citizens, a statistic on the increasing number of local retirees could show that you have a real opportunity to grow your business in the future.

With a little thought and research, you’ll have no trouble finding relevant economic data to include in your plan. In fact, here are a few great sources of information to consider:

Location is an important decision for every business. And it can have a big impact on your ability to succeed. 

So take the time to describe the location of your business and explain its advantages. For example, you may be located close to your most important customers. Or you may be based in an economical area that helps you lower your operating costs. 

Of course, in the Internet Age, not every business is dependent on a “bricks and mortar” location. If that’s the case for your business, make sure you explain why your location is not a significant factor in your business success.

You’ve talked about your customers, your target audience, the competitive environment and your location. Now it’s time to discuss another very important subject: your marketing plan.

Your marketing plan covers the strategy and tactics you will use to get the word out about your business to your customers and prospects. So make sure you include the following information in this section of your business plan:

  • Your communication goals 
  • The key messages you intend to send to your customers and prospects
  • The specific communication channels you will use to reach your target audience. These channels can include everything from traditional collaterals like brochures and signage to print and online advertising, social media, your website, Search Engine Optimization, broadcast TV and radio, and more.
  • The estimated annual cost of your marketing efforts
  • The additional revenue you expect to generate once you put your marketing plan into action

No question about it. Marketing plays a pivotal role in business success. But first you have to develop a sound marketing plan. And put it into action.  Learn more at

Before you can sell products and services, you have to develop them and deliver them to your customers. That’s why this ‘operational’ story deserves a significant section in your business plan.

So talk about how you develop or acquire new products and services. Describe the length of time it takes to get a new offering to the market. Identify the essential equipment used in the development and delivery process. And discuss the way you resolve any operational problems. 

It’s all part of the effort to prove that you have thought carefully about the most important operational issues involved in running your business.
It often takes a group of highly skilled leaders and managers to operate a successful business. That’s why it’s important to provide information on your ‘key players’ in your plan.

Identify their roles. Describe their skills and experience. And don’t forget to include their resumes, too. 
All of the people you hire play a major role in your success. So you’ll want to talk about your workforce in your plan.

Do you intend to hire more people in the immediate future? How many do you expect to add to your team? What skills are most important to your business? What plans are you making to ensure that you will have the talents and skills you need?

These are some of the questions to address in this section of your business plan.
When you’re ready to prove that your business has a strong financial foundation, concrete numbers and metrics are hard to beat. That’s why it’s important to include the following in your plan:
  • Income Statement
  • Balance Sheet
  • Cash Flow Projections
  • Operating Data
  • Personal Financial Statement
  • Debt to Worth Ratio
  • Gross Profit Margin
Depending on your business, you may want to include other financial data as well. And remember. If you need help pulling this information together, get a Certified Public Accountant involved. 

If you take the time to include all of this important information, you’ll be able to tell an effective story about your business to any target audience you have in mind, including investors, partners, prospective team members, and more.

But your plan also serves another purpose. It can help you get a business loan.

Of course, you’ll need to identify the specific amount you want to borrow and discuss how the money will help you achieve your goals.

You should also explain how the financial information in your plan gives a strong indication that you will be able to repay your loan while managing all of your other business obligations.<

No question about it. A sound business plan plays a major role in a prospective lender’s decision-making process. Consider it another important reason why you need a great business plan.

Ready to apply for a loan to help your business grow? Apply now!

Get the help you need to start your business plan today.

Ready to start working on your plan? You’ll find links to a wealth of helpful resources in the business resources and tools section of this site. 

For helpful and free business plan templates, you can download the SCORE of Greater Rochester Business Plan Template or check out a Step-by-Step Business Plan Tool on