Nobody starts a successful business by chance – they have a strategy. This is why a business plan is essential, whether you’re establishing a new company or looking to expand. Not only does a business plan guide you, it indicates to key stakeholders, partners, lenders or investors how you intend to go forward. However, the good news is that writing a business plan for a new business isn’t as intimidating as it sounds – with certain specific criteria, you can draw up a viable roadmap for your company. Here, we guide you through devising a strategy with our eight-step new business plan template.
Writing a business plan – some general pointers
In essence, a good new business plan will lay out where your business is at today and where you intend to take it. This information should include your resources, capabilities, and goals, and clearly explain where you want to be in the future and how you’ll get there. While the concept is easy enough to understand, actually putting the plan together can be a little more complex – especially when it comes to keeping it concise yet convincing. To write a robust new business plan, you’ll need to carefully examine your marketing capabilities and strategy to convince potential partners.
However, as a rule of thumb, it’s good to keep it between 30–50 pages – anything longer and it’s unlikely it’ll get read, any shorter and it’s probably not comprehensive enough. Furthermore, although you only need to write one business plan, it is useful to tailor it to your audience. For example, a lender may be more interested in financial projections, whereas an investor might want more information about how you intend to develop your product.
Our 8 step new business plan template
A comprehensive new business plan template can be broken down into eight core sections. If you’re putting together a business plan for the first time, it helps to divide your plan into these parts to keep the process focused. From here, the result will be a complete overview of your current status and where you’re headed.
1. Executive summary
The term ‘executive summary’ may sound daunting, but it’s actually quite straightforward. The executive summary is basically a synopsis of your business plan and shouldn’t be more than one or two pages in length. However, this isn’t to downplay the importance of this section – it’s probably the most important part. This section will explain what your business will be, what it will do, and where you want to go in the future. For lenders and investors, this summary of your business plan is make or break. Your executive summary should include:
• A mission statement of no more than one paragraph.
• General company information, including the name of founders and their roles, employees, and any addresses.
• Description of your product and/or services
• Key milestones, including any financial highlights expressed in tables, graphs or a chart. If you’re starting up from scratch, including information about the success of previous projects.
• Financial information, including funding goals if you’re looking for business funding.
• A summary of where you’re planning to take the company in the future.
Remember – keep it to the point. Sometimes, it might be easier to write your executive summary last, after you have a better handle on the information.
2. Company overview
The rest of your business plan should expand on the points covered in the executive summary. So, next up in our new business plan template is the company overview. This chapter will develop your mission statement and general company information, discussing the structure of the company and the different roles. The section should begin with a description of the business’s purpose followed by information about the marketplace it serves. This will explain how your business fills a gap in the market and creates a value proposition. Finally, you need to lay out the legal structure of the business, including whether it’s a C-corp, S-corp, or LLC. A pro tip is to think of this section as your elevator pitch – keep it concise, compelling, and catchy.
3. Market analysis
The third section is where you can start to drill down into some real detail. The market analysis will examine the industry and your competitors, breaking down how your business will succeed. Therefore, this section is essential to convincing investors and lenders that you, the owner, have what it takes to generate a return on their investment. Therefore, this is likely to be your longest section, covering the following points:
• An industry breakdown, including size, growth, trends, and expert projections.
• A target market overview, including customer characteristics and needs.
• Target market size and growth potential, supported by statistical evidence. To learn more about how to this figure out, take a look at the SBA’s guide.
• Next, you need to estimate your market share potential, which illustrates the gains you expect to make within your target market.
• Pricing projections informed by market research and supported by distribution and a brief overview of marketing strategies.
• Obstacles to market entry, like legislation, technology, or high investment outlays.
• An analysis of your competitor’s strengths, weaknesses, and market share.
4. Organizational structure
The fourth stage of developing a business plan for a new business is describing the company structure. This part will explain who does what, their background, and what their experience brings to the team. The chapter should begin with an overview or chart that expresses the organizational overview. This section should also go into a little more detail about the ownership structure, including who owns what and in what proportion. Next, describe the background of the founders and the team; this will show investors that you have surrounded yourself with individuals that can ensure success. This should be fairly detailed, so check out the SBA’s guide to this subsection.
5. Product or service offering
There’s been a lot of build up, but finally, you can dive into talking about your product or service. This part should contain a general description of your offer, highlighting its unique selling point and framing how it fills a gap in the market. Explain where your offer currently stands; for instance, is it still a concept or are you ready to start selling? What research and development activities do you need to undertake? How are third parties implicated in fulfillment and sourcing? Furthermore, you’ll also need to include information about intellectual property, especially if your business is in science or tech.
6. Sales strategy
Once you’ve covered the details of your offer, you need to describe how you are going to push it. In general, this will cover how you intend to position and promote your product or service. Positioning is all about branding; how will consumers interact with your product and how you will differentiate it from your competitors? In contrast, promotion will describe how you’ll reach your customers, advertise your product, and deal with public relations. From here, you’ll need to discuss your sales strategy. Once a consumer has made contact, how will your sales force handle the interaction? How will they work towards closing the deal? To express this, you’ll need to describe what your sales funnel looks like. Although you might not have an airtight plan just yet, it is important to demonstrate that you have a strategy.
7. Revenue projections
Last, and by certainly no means least, are your financial plan and revenue projections – which is arguably the most crucial aspect of our new business plan template. This chapter will outline your current financial position and describe where you’d like to be in the future. Financial projections are either supported by previous data, or in the case of a financial plan sample for new business, determined by market analysis. When calculating your forecast, you should include:
• Projected income statements
• Cash flow forecast
• Capital expenditure budgets
• Balance statements
These should cover the first year in detail, plus a long-term outlook for the next three to five years.
Finally, you should include details of your funding needs. Whether you intend to go through venture capitalists, loan companies, or an investor, you need to list the amount you’ll need and how these funds will impact your operations. This will give a clear picture to the investor or lender how their contribution will generate a return on investment.
Most business plans include appendices. These are attached to the business plan and contain supporting information that is omitted from the main text. For example, these could be data, charts, footnotes, resumes, and other relevant ancillary information. Make sure this section is clear and organized, so include a table of contents that breaks down its relationship to each section.
Remember, when writing a business plan, organization is key. Approach each section clearly, concisely, and efficiently – your use of words should be as streamlined as your approach to business. Furthermore, you should always keep your audience in mind; ensure that you don’t over-use industry-specific jargon that people may not be familiar with it. And that’s it – armed with our new business plan template, all that’s left to do is dive in.