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B-Diary: What is a Business Plan?

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I am writing a business plan for a boutique I hope to open in the near future. I started B-Diary as a blog column to share the research I come across as I write my business plan. So, it makes sense to write about why business plans are so important and what exactly goes into a business plan. 

I have an idea about starting a business and writing the business plan gives my idea structure. It keeps me focused and guides me by asking me questions like what are your company values? who are your customers? who are your competitors? A business plan also helps me identify risks and create ways to avoid these risks. 

There are many entrepreneurs who have jumped into their businesses without creating a physical business plan. But I believe that in order for these entrepreneurs to be successful, they had to assess strengths, weaknesses, opportunities and threats. They had to set goals, create a plan, execute the plan and evaluate their progress against the goals they set. In essence, that is exactly what a business plan is. 

A business plan is composed of the following sections:

Executive Summary: This is the summary of the entire business. Briefly state what services or products your business provides. Here you would include the company mission statement and vision. You also would include your company's goals for the future.  

Business Content: Describe your business and its market place. What are the economic trends in this market? Does your product satisfy a need in this market? Do you see an area of growth potential? 

Business Profile: In this section you can explain your business structure. How will your company be organized? Will you have employees? or specialized departments? Here you can list policies and procedures your company will follow. 

Market Analysis: Here you would describe your customer. Who is your customer? Where do they live? Include demographics such as age, gender and income. Who are your competitors? 

Marketing Plan: This is where you would write your marketing strategy. Remember to illustrate how your company will create, communicate and deliver your product. How much does your product cost produce? Why is it priced this way? How is it packaged? How will it be presented? Where will it be advertised? You would include a marketing schedule. 

Financials: If you are starting a business, here is where you would include your financial projections for the next 3-5 years. How much money do you expect to make? You need to include projected income statements, balance sheets and capital expenditures. 

Funding Request: Here you would state your current finances and funding requirements. Present a schedule of when you will need funding and how you plan to use that funding. You can talk about when you plan to produce your product? when will you begin your marketing campaign? Basically, why and when do you need money. 

Remember every business is different. Some articles and books even have different names for each section. You should create a business plan which best suits your particular business. You can write your business plan in any order, but you should leave the executive summary for last. In the end, you can go back and edit all the pieces together. Each section should flow into the other like a well written essay.  

Here are a few links that I constantly refer back to:

https://www.sba.gov/writing-business-plan

http://www.entrepreneur.com/encyclopedia/business-plan