A business plan is an outline of where your contracting company is today, where it is going and how it will get there. This outline is an adjustable document in which you can make projections about future problems and opportunities. By learning how to write a business plan the right way, your company will be able to stand on firmer financial ground.
How to Write a Business Plan in 6 Steps
Most business owners know there are many good reasons to have a viable business plan. But, many don’t know how to write a business plan properly. Learning how today will help you have a brighter tomorrow.
1) Executive Summary
The executive summary is a snapshot of your business, which is meant to be read quickly and easily. It gives an overview of who you are, what you do and where you are going.
An executive summary of a business plan should have these six key elements:
- A mission statement
- General company information
- Growth highlights
- Your products and/or services
- Financial information
- A summary of future plans
2) Company Description
Every business plan must include a detailed company description. It identifies the nature of your business; the real world problems you are trying to satisfy; and how your products or services plan to meet those needs.
In addition, you should include the consumers, organizations or businesses your company currently serves or plans to serve. In addition, you may list out the advantages your company has over its competitors, such as location or expertise.
3) Market Analysis
A market analysis is particularly important to new or expanding businesses. In this section of the business plan, you will include research on your industry, market and competitors.
Highlight these main points:
- Industry description
- Industry outlook
- Description of your target market
- Estimates of your market share
- Pricing and gross margin targets
As you create a market analysis, examine your company’s strengths, weaknesses, opportunities and threats. For example, will you face stiff competition from an established construction company in your area?
4) Organizational Structure
A typical business plan outlines who performs which role in a company. It lets potential investors know how big your business is and who the key players are. If it is helpful, you could create a simple organization chart.
This section of your business plan should answer questions like these:
- Who is in charge?
- What are the responsibilities of key employees?
- Is the business incorporated?
- Is it a partnership, limited partnership, or sole proprietorship?
You will also need to have a solid marketing strategy to prove your business can achieve its goals.
Use these questions to help you outline your strategy:
- Who is your target customer?
- How will you reach potential customers?
- Who are your competitors?
- How will you differentiate your business?
- What is your marketing budget?
6) Financial Projections
After you have created a winning marketing strategy, you are ready to develop financial projections.
Historical Financial Data
Many creditors require the last three to five years of financial data, including income statements, balance sheets and cash flow statements for every year of operation.
Prospective Financial Data
Creditors also look to see what your company expects to do in the next five years. Your business plan should include a forecast of income, cash flow and capital expenditures.