When you’re starting a business part time, you may think you don’t need a business plan. However, a business plan is important for any startup—big or small. Much more than a tool for obtaining a business loan, the business plan is the road map you will use to keep your startup on the right track.
Business plans typically include these sections:
Executive Summary:
1. The Business
2. Financial Forecasts
3. Supporting Data
We’ll explain the Executive Summary last, because you’ll write it last.
1. The Business: This section explains your business model—what your business does and how it will make a profit.
- Describe your business, your product or service and why there is a need for it.
- Explain who your target market is and how you will market to them.
- Describe the sales channels you will use to sell your product or service.
- Detail who your competition is and what characteristics will enable your business to compete effectively.
- List your experience and background, and that of any co-founders or partners.
2. Financial Forecasts: Explain how much it will cost to start the business, where the money will come from and how you will spend it, and your financial projections for growth.
- List the equipment you’ll need to buy and any other investments you must make to get started.
- Explain where your startup money will come from, such as personal loans, savings or salary.
- Project your income and expenses for the first year in business and estimate how long it will take to break even.
- Include any outside investors or grants as an option of where your startup money may come from.
3. Supporting Data: Like an appendix for the business plan, this section provides backup evidence for the information you included elsewhere, such as the size of the market for your product or service.
