Basic Business Plan Structure

Business plans vary in content according to their intended purposes, but the basic format remains the same. It consists of three elements: First, discuss the business model and describe your products and services. Then place the business in its industry and discuss your intended marketplace, including your target customers and how you’ll reach them, beating your competition.

Last, relate these plans to the real world, discussing your contingency plans and finishing off with spreadsheets detailing your anticipated sales, costs of doing business and resulting profits. Vary the basic format only to more clearly present the idea. Clarity is the most important quality of a business plan.

The Executive Summary

Written last, the executive summary is an outline of key points in your business plan, explains SmartyCents.com. More marketing-oriented than the basic plan, it’s the tool you use to entice people to ask to see your full plan document. Length can vary from one page for a dense abstract to the venture summary style of approximately 10 pages.

Venture summaries are used in marketing your idea to venture investors and others who will respond better to charts, pictures and an evocative approach to describing your business. Keep the presentation free of hyperbole, or your plan will appear more fanciful than realistic.

The Business Model

A description of the business model makes an effective start for your business plan. It can consists of several business plan areas. Begin with an introduction to the industry and your mission statement. Title your first section “Company Description” and include all the pertinent facts, such as your incorporation or other legal business status, licenses, trademarks and patents.

“Business Model” comes next. In this section, describe your products and services, how you intend to make money and why the business is relevant. A description of your management team can be added to this section, if you have an impressive team. If not, the “Management” section is often placed just before the “Financial Projections” section.

Your Marketing Model

“Marketing Model” contains a section titled “Target Market” in which you describe the demographics, psychographics and buying habits of your target market and why your product and service will appeal to it. Next, “Marketing Plan” is a detailed description of your marketing strategy and tactical methods of attracting business.

Finish with your “Competition” section, in which you list your competitors, with a realistic appraisal of their strengths, how your company compares and your strategic and tactical plans for developing and maintaining market share in your competitive niche.

Build-Out Model

In the “Build-Out” section, outline the steps to launching your company, if you’re pitching a startup. It’s appropriate to include benchmarks and a timeline. Investors also appreciate a discussion of how your costs of development and operations fit into the timeline and when revenues enter the equation.

For a business plan dealing with expansion, this section should detail the road map to your final goal. In an operational business plan, human resources, contract development, corporate change and administrative reorganization can be mapped.

Any Contingency Plans

It’s always a good idea to include a section on what you’ll do if your plans don’t seem to be working out as expected – particularly if you’re planning a startup. This is the place to insert a SWOT analysis – a discussion of the strengths, weaknesses, opportunities and threats facing your business goals. It’s also another appropriate spot to discuss costs and how you plan to cover them or cut them if revenues or investments don’t materialize as hoped.

Financial Projections

The final section contains financial projections, explains Entrepreneur magazine. Standard are sales projections, a personnel plan, a profit and loss statement, a cash flow statement and a balance sheet. If your company is already in operation, include current financials along with the pro forma financials.