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Business Planning 101: How to Create a Solid Business Plan for Your Startup

Business planning is the process of creating and documenting a strategy designed to cultivate growth for your company. Most business planning techniques revolve around three primary objectives: maximizing profit, mitigating risks, and communicating a strategy to secure funding. Although there are different aspects of business planning, in most cases, business planning is centred on creating one specific document: the business plan.

No matter what industry you’re in or what products or services you’re selling, it would help if you had a business plan to guide you. Whether you’re launching an online digital marketing agency or opening a local coffee shop, your business plan is the foundation for your growth efforts. Ultimately, the time and effort you put into your business plan development can significantly impact the success or failure of your venture.

But why is a business plan so important? Couldn’t you use a website builder to launch a site within minutes or have a minimum viable product within a few days? While starting something is simple, solidifying it is not.

Startup founders don’t always see the value of a business plan, particularly when they don’t plan to raise money right away and are silk working out the cracks and kinks of their product. But regardless, think of a business plan as the bedrock for your company.

This detailed document is much more than a description of what your business does and how it does it. It can be used to secure loans and other forms of funding, solidify your milestones, help you better understand your market and competition, and outline your financial needs and feasibility. In short, it can prevent you from walking down a dead end.

Business Planning Tools

A myriad of tools and services exist to help entrepreneurs develop business plans of their own. Many companies offer their own version of a small business plan template to guide business owners through the process. However, numerous services are dedicated to helping business owners build out certain portions of their business plans. For example, business owners could outsource micro and macroeconomic research, financial planning and forecasting, and marketing agencies. Additionally, they can work alongside business plan writers to help them create a document that’s most likely to appeal to investors and lenders.

Business Plan Table of Contents

Understanding the benefits of a business plan is one thing, but writing it is entirely another. Start by checking out different industry-specific templates for inspiration. From there, follow the tried-and-true format using this table of contents.

Each section provides valuable insight into how you plan to build your business, both from a high-level overview and a detailed perspective. It’s important to note that business plans aren’t just for lenders and investors—it’s also for you. Many business owners have found that their business plans help foster accountability and guidance. With that in mind, here’s what you need to include in a winning business plan:

1. Executive Summary

2. Company Details

3. Market Analysis

4. Customer Analysis

5. Competitor Analysis

6. Marketing Plan

7. Operations & Logistics Plan

8. Management Team

9. Financial Plan

10.  Appendix

Executive Summary

Your executive summary is an overview of your startup. This section provides the reader with a quick synopsis of the overall business plan. The executive summary should be written last to properly convey and summarize the contents in the rest of the document.

For example, once you’ve written a thorough analysis of your target market, it’ll better equip you to include a short synopsis of it in your summary. This section highlights the key points you’ll cover in your business plan by defining your mission and strategy.

Your executive summary should:

  • Include a captivating introduction to your business
  • Describe the problem your business is trying to solve
  • Explain how your company offers a solution to a problem
  • Describe products and services you offer
  • Address how you plan on reaching your customers with your marketing efforts
  • Include your projected revenue
  • Introduce the team

Company Description

The Company Description section of your business plan covers three key components: who you are, what you do, and why you do it. Begin by creating an elevator pitch and then expound upon it.

For example, let’s say you’re trying to raise money for your package delivery startup, ParcelPass. Your elevator pitch might be: “Think of ParcelPass as an Uber for package deliveries. When you need something delivered locally, request a GPS-enabled vehicle through the app. ParcelPass arrives, picks it up, and hand-delivers it to its recipient.” 

Remember, the company description is designed to sell. Not only does it help readers understand your mission and unique value proposition, but it can also help you practice pitching your company to others, both verbally and written.

Your company description should:

  • Share your origin story
  • Offer basic company history, such as location and start date
  • Explain how you developed the business concept
  • Include relevant industry information
  • Describe your team in detail (including qualifications and background)
  • Include a mission statement and vision statement

Here’s an example of a “Company Overview” introduction from Cady’s Cookies, a fictional cookie company developed by Planbuildr:

Market Analysis

Your market analysis is one of (if not the) most important parts of your business plan because it tells the reader that you have a verifiable market. How your business performs in your industry depends on the market, and it’s crucial for you to present proof that the current (and foreseeable) market leans in your favour.

Your market/industry analysis shows how comparable businesses in your industry perform and highlights market demand. You can find plenty of free market research resources that offer relevant market data, or you can hire a market research firm to spearhead this section for you. In short, your market analysis will provide quantitative and qualitative assessments for your industry.

Your market analysis should:

  • Describe customer segments in your market
  • Highlight favourable buying patterns
  • Explain how you intend to build brand loyalty and acquire repeat customers
  • Provide an analysis of your competition
  • Identify historical trends that have shaped your industry
  • Include relevant statistics, including market size, market growth, and future growth estimates

Customer Analysis

Who are your customers? This is the question that the Customer Analysis section of your business plan aims to answer. This section dives deeper into your target market and addresses how you plan to solve their pain points.

These “pain points” can be versatile and multi-faceted. For example, if you own a long-distance moving company, a potential customer pain point might be finding a business that knows how to handle the fragile or expensive property. Another pain point might be finding vetted drivers with outstanding long-haul driving records.

As you write your customer analysis, consider buyer personas or ideal customers. Use this persona as a model for your written description. Describe their demographics, personality traits, buying patterns, income and education level, and hobbies.

Your customer analysis should:

  • Offer a holistic overview of your ideal customer
  • Describe your customers’ pain points
  • Explain how you can solve your customers’ issues
  • Assess customer buying patterns
  • Acknowledge your proximity to your customers and how you plan to reach them

Competitor Analysis

Your competitive analysis should answer the question, “Why is my business better than other businesses that offer similar services and products?” This is where you’ll communicate how you plan to outperform your competition.

Competitor research is crucial because it explains what makes you different, helps you understand why they’re succeeding, and identifies gaps that you can leverage to build a better business.

Your competitor analysis should:

  • Explain how your business differentiates itself from the competition
  • Describe strengths your company offers that your competitors don’t
  • Highlight key advantages in management or operations
  • Illustrate issues your current competitors are having and explain how you plan to address them

Marketing Plan

Your marketing plan should explain how you intend to reach your target market. It should be determined by the specific needs of your target market, as described in your customer analysis. Overall, your marketing plan reveals how you intend to reach potential customers, build brand awareness, and educate your market.

Your marketing plan should include four key sections:

1. Products. What products or services do you offer, and what makes them better than similar offerings? Are there any particular features or benefits?

2. Promotions. How do you plan to promote your organization? How will you spread the word and attract customers? Your promotion plan should include a detailed description of how you intend to position yourself in front of buyers. This could consist of advertising, product giveaways, influencer marketing, content, or content marketing.

3. Price. What’s the cost of your products? Justify higher prices when necessary and leverage lower prices if possible.

4. Place/Distribution. This section describes where you sell your products and how you sell them. Are you selling your product online, in a retail shop, or both? What are the benefits? If you plan to sell wholesale and direct, describe these channels as well.

Operations & Logistics Plan

Your Operations and Logistics section describes the workflows and processes you’ll implement to make your business plan come to life. Your operational objective covers several factors, including how each of your departments supports different operational goals. This section will also outline strong contingency plans in the event of unexpected circumstances. In this area, make it clear to the reader that you have a strong understanding of your supply chain.

Your operations and logistics analysis should:

  • Describe who your suppliers are
  • What your production process will look like
  • Define key metrics and milestones
  • List the necessary equipment and technology to keep your business running
  • Describes your shipping and fulfilment needs
  • Explain quality control measures

Management Team

The people behind your business can make or break its success. This section of your business plan describes the team in detail and explains why their qualifications and experience make them well-suited for success.

Investors aren’t just putting their dollars into products and services but the people building the brand. The calibre of your team plays a significant role in helping readers understand your business’s willingness and readiness. Lastly, this is where you’ll explain how each team member’s skill set contributes to the company’s bottom line.

Your management team section should:

  • Provide biographies for key team members
  • Highlight educational achievements, experience, and accomplishments
  • Describe how your business ownership is structured
  • List any external management resources, such as an advisory board

Financial Plan

No matter how much hard work you’ve put into growing an idea into a business, its financial welfare will be the ultimate determination of success. Your financial plan is designed to help financial investors understand what to expect now and in the foreseeable future. In short, it explains how you’ll generate income. It would be best to work with an accountant, bookkeeper, or third-party financial planner to shape this section of the business plan.

The financial plan is typically broken down into three parts:

1. Income statement. Income statements show revenue sources and expenses over a given period.

2. Balance sheet. A balance sheet reveals the equity you have in your business, considering the assets you own and the liabilities you owe.

3. Cash flow statement. The cash flow statement is what’s left when expenses are paid, and revenue is collected.

Appendix

The Appendix closes out your business plan and provides supporting materials or documentation for previous sections, such as balance sheets and income statements. Essentially, this is where you put all the essential details that you didn’t include in prior areas. The appendix exists to keep the business plan concise early on so as not to bulk up the portions of the business plan where content matters most.

Your appendix should include:

  • Detailed financial forecasts
  • Business credit history if available
  • Applicable patents or trademarks
  • Management team resumes
  • Market research

Conclusion

Writing a winning business plan is no walk in the park, but it’s important to put proper time and effort into building it out. Many great businesses fail to get funding because they miss the mark in terms of their business plan and fail to convey the viability of their company.

As you create your business plan, reference templates and actual, archived business plans. Use these as inspiration and guidance, but don’t forget to customize your plan as much as possible. You don’t want your business plan to be a copycat of everyone else’s template at the end of the day. Be original and thorough, and your plan will speak for itself.


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