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2/24/2020 Business Plan Template: A Step-by-Step Guide For Entrepreneurs

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282,679 views | Dec 10, 2018, 08:46am

Business Plan Template: A Step-by-

Step Guide For Entrepreneurs

Entrepreneurs Author of The Art of Startup Fundraising & Serial Entrepreneur

Alejandro Cremades Former Contributor

What should be in your business plan?

Creating a business plan is a key part of starting any business venture. Even if you’ll

never use it in this format for attracting investors and raising capital, it can be vital for

helping all entrepreneurs to ask and think through essential questions.

Nowadays business plans are used as an internal roadmap for the execution of the

company since pitch decks have taken over when it comes to fundraising required

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2/24/2020 Business Plan Template: A Step-by-Step Guide For Entrepreneurs

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materials. For a winning deck, take a look at the pitch deck template created by Silicon

Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel

investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Moreover, I also provided a commentary on a pitch deck from an Uber competitor that

has raised over $400 million (see it here).

Don’t skip this part of the process. Though, do not let it become a distraction and slow

you down from creating an actual business either.

Today In: Leadership

For key insights on the why, when and how to create a business plan, and emerging

alternatives for startups versus small businesses, see my Forbes article on How To

Create A Business Plan.

There are many variations of business plans today. Especially, with the rapid growth of

lean startups. A few minutes on Google will provide plenty of free business plan

template options. The following is adapted from the SCORE Association’s recommende

outline of categories, which covers most of the bases for exactly what to include in your

business plan.

Executive Summary

This is the most critical part of your business planning. If you never flesh out a full

business plan, make sure you create a fantastic executive summary. This brings togethe

all of the key elements of your plan and will often be the make or break document whic

decides whether commercial lenders or investors will have any interest in seeing the re

of your documentation or pursuing a relationship with you. For additional guidance, yo

may want to review the Executive Summary Template that I recently covered on Forbes

as well.

Company Description

This section provides a further overview of your company now.

Include:

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The company purpose, mission and vision

Company formation information

Who the founders are

Location and geographical markets served or where you have a presence

Current status and stage of business

Any notable achievements so far

Products & Services

List what products and services your company has been formed to create. How are you

solving the main problem and are serving the community with your business?

Include:

Definition of the core product or service

Development stage

Screenshots or diagrams

Current pricing

Past test results

Anticipated future products and services you hope to develop and roll out

Marketing Plan

This is another section which is an absolute must-have, even if you never develop a full

fledged business plan in its entirety. This holds key information that all financiers and

potential investors are going to want to know. Even if you hope to just get away with

using a pitch deck to raise the capital you need.

This is also a vital guide for yourself as a founder, and for your growing team as to what

needs to be done and how.

2/24/2020 Business Plan Template: A Step-by-Step Guide For Entrepreneurs

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Every minute invested in this section can pay great dividends over the longer term.

Include:

Competition and market research

SWOT analysis (Strengths, Weaknesses, Opportunities & Threats)

Target market research (total market size and total addressable market (TAM))

Brand and product positioning

Elevator pitches and tag-lines

Target customer personas and profiles

Results of any testing conducted so far

Marketing channels to be used

Marketing budget

Estimates of cost per action (CPAs)

For further guidance on this section, you may want to review the piece on Forbes with

the title How To Create A Marketing Plan.

Operational Plan

This is your opportunity to organize and demonstrate your understanding of this

industry and business.

Include:

Facilities and space needed

Technology needs

Equipment needs

Supply chain management

2/24/2020 Business Plan Template: A Step-by-Step Guide For Entrepreneurs

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Logistics and distribution plans

Order and fulfillment processes

Quality control checks

Legal and accounting needs

Management & Organization

This section of your business plan will help you to identify your own needs, and

demonstrate to investors and other licensing bodies and agencies that you are the team

to get this job done.

It basically shows your management and industry experience and who will do what.

Include:

Founders and executive team

Any owners and shareholders

Board of directors

Consultants and special advisors

Key team members and department heads

Financial Plan

Provide an honest snapshot of where you are and where you reasonably hope to go,

providing you secure the funding you need.

Include:

Current balance sheet

Past 2 years’ financials if applicable

Financial projections for 12 months, and annually through year 5

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Break even analysis

Cash flow projections

Income and expenses

In this section you may also be including startup cost and capitalization requirements,

or funding and loan requests.

Startup costs should be thorough, have some additional cushion built in, and focus on

development of physical product or intellectual property and growth. Not what you wan

to pay yourself as a salary.

If fundraising, be sure to include a repayment schedule for any loans, use of funds,

runway to follow up fundraising rounds, and the milestones you expect to achieve by

then.

Appendices

Include all other information, references and required documentation here.

This will typically include:

Articles of incorporation and status

Resumes of founders and key team members

Copies of insurances

Licenses

Trademarks and patent registrations

Contracts

Appraisals

Deeper research data or links to references

Stay Flexible

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Follow me on LinkedIn. Check out my website.

I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by

‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley &... Read More

Just like your first attempt at coding a website, practicing your pitch, or riding a bike, it

not going to be perfect. Do your best. Get outside input from an expert. Just don’t wait

until you think your business plan is perfectly polished and cannot possible go any

further in depth. Otherwise, chances are you will have missed your window of

opportunity by a long way.

It is also crucial to understand that nothing in this document is set in stone. Pretty muc

everything will absolutely change over time. Roles will change, marketing will change,

financial projections will change, and your product and service menu can change.

Having raised money for startups, exited them, and after interviewing many of the mos

successful founders and angel investors on the DealMakers Podcast, I’ve got to

experience both the struggles and wins in startup life. Things change rapidly overnight

and for this reason you need to adapt quickly to the market and change whatever is

required.

This is a great guide and exercise. It’s a gateway to getting to the next step. Get it done,

start taking action and stay flexible.

Summary

Creating a business plan remains a valuable part of launching any new business ventur

Formats and business plan templates may have evolved, and new documents like pitch

decks are becoming even more important.

Though without going through this process many entrepreneurs will find they have hug

gaps in their ideas and may fall short when it comes to fielding questions from serious

investors. Using this template you will cover most of the bases and will be able to take

the next steps with confidence.

Alejandro Cremades

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