6.7: Business Plan

A business plan may change as your business grows or pivots in a new direction, so you will find that the business plan is not fixed but flexible and needs to be revised from time to time. Any new or existing business can and should make use of a business plan. “In its simplest form, a business plan is a guide that outlines goals for your business and how you plan to reach them. It contains an overview of your business strategy, milestones to track tasks and responsibilities, and the basic financial projections you need to forecast your sales, expenses, and cash flow.”^[1] “The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster, and according to our own 2021 Small Business research, working on a business plan increases confidence regarding business health, even in the midst of a crisis.”^[2]

 There is no one right way to write a business plan; your approach depends on your industry and who is reading your plan. Ensure you include all the important information any lender or investor will want to see before they go into business with you.

Below is a brief description of the sections of a traditional business plan.

1. Executive summary. The executive summary is a crucial component of a business plan, often completed last but read first. It provides a concise overview of the entire plan, typically limited to two pages. Its purpose is to capture the essence of the business and its goals, serving as a compelling elevator pitch to attract potential investors.^[3]
2. Company description. “A list of the goods and services the company will provide, the market it will serve, short- and long-term goals for growth and a brief history of the company’s formation and past performance.”^[4]
3. Market analysis. The market analysis section identifies the target market and demonstrates the company’s understanding of its customers and demand. It includes data on demographics, location, consumer behaviour, and market needs, supported by relevant statistics and sources that give an overview of the target market size.
4. Competitive analysis. A competitive analysis is a strategy that involves researching major competitors to gain insight into their products, sales, and marketing tactics. Implementing stronger business strategies, warding off competitors, and capturing market share are just a few benefits of conducting a competitive market analysis.^[5]
5. Management plan. The management plan outlines the company’s legal structure, key management personnel, and human resource needs. It specifies staffing requirements, employee compensation, and any external professionals, such as lawyers, consultants, or architects, that the company will need. If the company intends to use the business plan to source funding from investors, it should also list the executive team and advisory board members.^[6]
6. Operating plan. The operating plan outlines the company’s physical and logistical needs, including facilities, equipment, labour, supplies, and inventory. More complex operations, such as manufacturing, require detailed plans covering custom infrastructure, raw materials, and supply chains. Simpler businesses, like home-based consultancies, may need less detail.^[7]
7. Sales and marketing plan. “This section of the plan defines what you plan to do to promote and sell the company’s products or services. Consider including your pricing plans here and mentioning the organization’s unique selling proposition. You may also list important communication channels for the business. For example, if you’re about to launch a retail company, you may explain which social media channels you’d use to promote the products through paid and organic advertisements. Other elements to include here are your email, influencer and content marketing strategies.”^[8]
8. Financial plan and projections. The financial plan outlines the company’s budgeting and financial projections. It includes estimated costs for staffing, development, production, marketing, and other operations. Established businesses may provide financial statements and balance sheets, while startups should present forecasts, funding needs, and potential investors.^[9]
9. Appendix. The appendix includes supplementary materials that support the business plan, such as financial statements, market research reports, or other documents that validate the plan’s assumptions and projections. These additions enhance credibility and provide deeper insight for readers.^[10]

Here is an example of a business plan for a hypothetical new product targeted toward Canadian seniors.