A business plan is a written, formal statement of your business goals, a detailed plan for reaching these goals, why they are attainable, and any background information on your organization and team. Usually a business plan is split up into a couple of basic parts:
– An executive summary is usually at the beginning and summarizes the key points of the business plan.
– Discusses the industry and the specific problem that your product or service will answer. Any evidence of market validation, whether through research or small experiments, is discussed here.
– Describes your ideal customers (target market), how many of them are there (market size), how many can be served by your company (total addressable market), how you are going to find them (sales and marketing), how you will service them (distribution) and how much you will be able to charge (pricing), and your plan for communicating your value proposition to customers (brand strategy).
– Reveals the financial results you expect based on your plan. This section will include some combination of your projected revenues and expenses, balance sheet, cash flow statement, a 3-7-year business valuation, unit economics (UE), customer life time value (LTV), customer acquisition cost (CAC), working capital needs and startup capital.
– Illustrates the competitive landscape of your business and the potential competitive threats or opportunities that exist. This section not only considers rivalry amongst direct competitors but also supplier power, new entrants, threat of potential substitutes and buyer power.
Discusses the key stakeholders involved in moving your company forward and why they are crucial to the company’s future success. It includes the management team, Board of Directors and/or Advisors and/or key employees. This section also discusses any key members missing from the team and how you plan to attract them.