Ask the experts, and they'll tell you that any company serious about its trade will not operate without a business plan. The document defines your core activities and objectives. It can help steer your business in the right direction.

Writing a great business plan can also attract the right investors or help you secure loans to grow your company. But how do you go about creating an effective business plan?

You can quickly get an online business plan customized to your unique needs. However, it's best to understand how it is done before creating a business plan.

Well, read on to find out.

Critical Elements of A Good Business Plan

Businesses vary greatly. How much information you'll want to include in a business plan is entirely up to you. The most important thing is that it establishes how you're going to achieve your goals.

And, of course, follow the plan religiously.

Nevertheless, there are details you should not miss outlining in your plan, regardless of the business you're venturing into.

In line with that, here are the key elements of a good business plan.

Executive Summary

The idea is to give readers an overview of your business, highlighting the most important and attention-grabbing parts.

Your audience is probably busy investors and executives. As such, there's a high chance that this is the only part they'll read.

Therefore, write the executive summary with that in mind. Make sure it succinctly conveys all relevant details based on the purpose of your business.

An executive summary should include a company's objectives, mission statement, management team, employees, operations, and location.

If your target audience is investors, it is good to include financial information for the process and investments with high-level growth plans.

On average, the executive summary section takes one to four pages. The ideal length should not be more than 10% of your entire business plan.

Competitive Landscape

You need to conduct a market analysis to identify your direct top competitors. Pinpoint your competition's strengths and weaknesses while relating to how your business will fill the market's existing gap.

In your market analysis, be sure to shed some light on the projected consumer demand and market share.

Don't skip this even if you think you're introducing an entirely new type of product or service that customers have never seen or used before.

 Organization and Management

Summarize the information about your company's legal structure, as well as the team that will help achieve your goals and objectives.

Clarify if you will run your business as a limited liability company (LLC), C or S corporation, partnership, or sole proprietor. You can present the hierarchy of the management team in a chart form.

If it is a single-member LLC, the owner is considered the manager. Such a company does not require a CEO or board of directors.

Suppose it's a case of a multi-member LLC. In that case, the members can appoint a president, CEO, CFO, director of marketing, and other members to run the business.

Consider including the educational background, awards & recognitions, skills, and level of experience of each management team member. Add other credentials as necessary.

You can also include support professionals, such as accountants, IT specialists, freelancers, and contractors.

Product and Services

What is your business offering customers? You will need to describe the features, functions, and benefits of your products or services. Tell the audience the unique aspects of what you're offering.

It is also worth including pricing, product lifespan, production & manufacturing process, research and development information, patents, and trademarks.

Target Customers

Describe your target customers because generations shop for products and services differently. A market analysis should also help you understand the lifestyles of your ideal customer group.

It becomes a lot easier to create a more accurate marketing strategy when you know what the prospects like, need, and expect.

It's advisable to focus on a narrow demographic and adjust as the business grows. Otherwise, designing an effective marketing plan could prove too costly.

Marketing Strategy

Outline the approach you will put in place to promote your products and service. Explain how you will acquire new customers while keeping your customer base.

The advertising and marketing plans should be flexible, as they may need to be tweaked at some point to fit the changing business needs.

There's no one sure-fire way marketing strategy. So, your approach should consist of several techniques and platforms you'll use to convert your target clients.

You can talk about advertising channels, marketing budget, pricing strategy & flexibility, distribution channels, and inventory management.

Funding Required

Finances are the backbone of every organization. Ensure you clearly outline the amount and type of funding you need to run the business for a specific period.

Specify the terms you would want to be applied to your debt or equity financing. Also, it is imperative to explain in detail how you will use the funds.

As for already established businesses requesting funding, you should include the income statements, balance sheets, and other financial information.

Future Financial Projections

This is an area where investors also focus the most. You will want to make your business plan more appealing to the audience by discussing investment opportunities and future projections.

Here, the goal is to convince the potential investor that you're on the right track to success.

Your business plan can also include the cash flow, balance sheets, income statements, and capital expenditure budget. Forecasts based on this will paint a financial picture of your business in the coming years, let's say 5 or 10.

Traditional Or Lean Startup Business Plan?

As we said earlier, the most important thing is to have a business plan that guides you to achieve the set goals. However, many entrepreneurs tend to gravitate towards the traditional business plan formats.

Perhaps it is because each section is are more detailed.

With lean startup business plans, they are easy and quick to prepare. The methods can be as short as one page. If an investor is interested in the business, they will most likely request more details.

We hope you found this guide on how to write a business plan was helpful. If you've tried creating a plan for some time without success, contact us for a free consultation.