Business Plan: Definition, Components, & Templates

Are you planning to start a business? 

If you answered ‘Yes,’ then the first thing you need to create is a business plan.

Here’s the classic definition of a business plan – 

“A business plan is a handy document that describes various core activities of the business, its objectives, timeframe, and a decisive plan to achieve the goals.”

Though a business plan has a plethora of purposes, some of the common ones include –  

• Start-ups and small businesses use it to look out for investors 
• Large companies use it to plan their expansion
• Most investors, banks, and venture capitalists look for a business plan as a primary prerequisite before offering any type of financial assistance. 
• A business plan helps entrepreneurs to stick to a plan and make calculated changes as the plan progresses. 
• It also keeps their goals on track and ensures that they do not get diverted. 

There are two types of business plans: traditional and lean. The traditional plan constitutes all the required aspects of a business in detail. This is what investors and leaders commonly look out for. The lean plan contains only the key elements of the business, and you can use this for quick internal use.

Now the important question is – how do you create a business plan, and what are its core components? And that’s where a business plan template comes in handy.

What is a Business Plan Template?

A business plan template is a pre-created dummy document that helps you craft a complete business plan in a strategically correct chronological order. The template might differ for different types of businesses.

This is mainly because every company will include a few key aspects that are applicable to their business. This could be points related to the company’s services and products, business model, method of operation, and so on. A business plan template is periodically reviewed and constantly updated to be aligned with the growth of the company.

How to Write a Business Plan: Key Components 

Now that we understand the importance of having a business plan, let’s dig into the various components of a business plan template and understand how to write a business plan.

Executive Summary

This section is all about creating the first impression on the readers. It explains your company’s ideology through a quick summary. You can start with basic information about your company such as: 

• Mission and vision statement
• Details regarding the services or products that you manage
• Location of the company
• Basic leadership team details
• Employees count and their basic information

If your aim is to get investors for funding, then you should also mention the financial information of your company and your growth plans.

Company Description

This section lets you showcase your strengths. Give a detailed description of your company, such as when it started and what goals you have achieved so far. Also, give a detailed explanation about the type of problems your business helps to solve and how successful your efforts have been so far. 

Then list out your target audience; be very specific about it. Include the organizations or the consumers who your business serves the best. You also need to describe the advantage you have over your competitors and how that can help your business to become successful. List out the experts in your team along with the location where you want to start your business.

Market Analysis

You need to understand everything about the industry you are getting into. This way, you will understand your target audience and what the industry has in store for you. Once you understand your industry really well, the next thing you need to do is understand your competitors.

For this, you need to do extensive competitive research. You need to find out the strengths of these businesses and what they are doing right in terms of product, service, social presence, marketing, etc. 

During the market research phase, you need to find different themes and trends in your market. Through this, you will get answers to various questions like: 

• What are the competitors doing? 
• What are they good at? 
• What is the best way to reach an audience for this industry? 
• How to do it better?

Customer Analysis

You need to dedicate this section to your target customer irrespective of whether you are a B2B or B2C business. This section helps you find the right target audience by building multiple user personas. You can finalize your target audience’s interest, behavior, and marketing plan to draw them. Customer analysis includes two main sections: 

Target Audience

In the target audience, you need to include various aspects about your customers, such as their age, work structure, designation, experience, field, and much more. 

Here are a few psychographic and demographic-based variables you can use to describe your audience:

• Age
• Gender
• Marital status
• Occupation
• Education
• Activities engaged in
• Income
• Location
• Family size
• Language
• Business size
• Beliefs

Customer Needs

Here you need to get into your customers’ shoes to understand their needs, what they actually care about, and what matters the most to them. Find out the reasons that are relevant to your business and explain them in detail. Here are a few reasons why customers might choose your product/service: 

• Speed
• Location
• Comfort
• Customer service
• Ease of use
• Quality
• Reliability
• Value
• Convenience
• Price

Organization and Management

This section will give a clear view of the company’s working structure, the hierarchy of the company, and who runs it. It will give a perfect view of how efficient the workforce is and what improvements can be made to avoid bottlenecks.

You can create a visual chart highlighting the hierarchy and the key members who are in charge of various teams and projects. Make sure to include the experience and specialty of your employees. You can even add the CV of key members of the team.

Also, explain the legal structure of the company. This is also the time when you decide if you intend to incorporate the business as a sole proprietorship or Limited Liability Company (LLC), and so on.

Product Line or Service

This is the place to list all the physical and digital products you sell or the services that you offer. You need to explain how your product or service benefits the customer and how it is different from similar products in the market.

You can also give a bird’s eye view of the product life cycle. List all the existing and planned Intellectual property rights like patents and copyrights. If your business also includes research and development for the product or service you offer, explain it in detail.

Marketing and Sales

This is the most complicated yet important section in the business plan. No matter how good your product or service is, you need the best marketing and sales idea to reach out to customers. You also need to create awareness about your brand and the product/service.

Remember – marketing never constitutes one single strategy. You should build a whole system of strategies that will evolve and change as the company grows.

In simple words, you need to give details on what steps you would take to attract customers and how to retain them. You should also have an explanation of how a sale would happen or what a typical customer journey will look like.

Funding Request

If you are requesting funding, then this section is very important for you. This is where you will outline the funding requirement. You need to give a detailed explanation about how much funds you require and how you plan to use these funds over time. 

Financial Projection

You need to convince the reader that your business is stable right now and it will be financially successful. You need to show your financial projections to support the funding request. If your business is already up and running, then include financial statements like: 

• Income statements
• Cash flow statements
• Balance sheets of the last three to five years
• Any other collaterals that you could use against the loan

Appendix

In the appendix, you can include all the supporting documents you mentioned in the previous sections or materials that were specifically requested. A few common things that you should include in the appendix are:

• Credit histories
• Product pictures
• Licenses
• Patents
• Resumes
• Letters of reference
• Contracts
• Other permits

Startup Business Plan Templates

Having a business plan template handy will help you to quickly come up with a business plan when you actually need it. And yes, you cannot survive without a business plan, especially if you are a start-up. You need a proper business plan to concentrate only on the right aspects of your business and make efficient use of both resources and budget.

While framing a business plan, you get to understand a lot of new aspects of your business and industry. In fact, it prepares you to handle difficult situations and shows you a way to solve different problems. 

Finding the right business plan template for your start-up can be a tiring job. The internet is flooded with hundreds of templates, and not all of them are accurate. This is where the next section can help, as we have highlighted some key resources from where you can find the best business plan templates for your business. 

When you identify the right template, it will make your processes more seamless. You will be more time-efficient, and your business will be more manageable. Business plan templates will help guide you in every step to create your own business plan. 

The templates highlighted in the next section will have: 

• Easy-to-use instructions for completing every step of the business plan.
• Questions that will allow you to wear your thinking hat and come up with details about each aspect of your business. 
• A fillable worksheet that you can use to fill in balance sheets, income, and much more.

So here are some of the top business plan templates currently available – 

Lawdepot has a standard template that will help you create a business plan on the go. Using their easy-to-use online tool, you can select your industry type and start filling in other key components like structure, service, operations, marketing, SWOT, etc. In the end, you will get a downloadable/printable version of your final business plan.

Microsoft office, apart from its normal services, also offers a wide range of business plan templates in various formats like word and excel. You can search for the ones you need, like a checklist, sheet, or document. Download the file, make changes and merge them into one document with ease.

Here are some other template sources –

• Template for startup business by Score
• Consulting firm business plan template by U.S. Small Business Administration
• Business plan template for a toy company by U.S. Small Business Administration
• Lean business plan template for a toy company by U.S. Small Business Administration
• Electronics business plan template by Prince’s Trust
• Financial tables for the business plan by Prince’s Trust
• One page business plan by $100 startup
• Funding and Strategy Business plan template by Growthink

How Can Lio Help

To make your dreams come true of having a business of your own and managing it nicely, Lio App can help you big time. The app lets you keep all sorts of data together in a more organized manner. You can keep records, and create tables and lists while working solo or with a team. 

The many features of Lio would help you with your retail business as you would be able to maintain all data on a track that you can use at any time. If you want to upload a document, then you can do that. Know the money transactions, cash inflow, profit and loss you are making, Udhaar, list of products, services, and even the teammates and clients that you have all in one place. 

Your retail business ideas will certainly become a successful business if you go on this journey of managing your business with Lio.

Step 1: Select the Language you want to work on. Lio on Android

Step 2: Create your account using your Phone Number or Email Id.

Verify the OTP and you are good to go.

Step 3: Select a template in which you want to add your data.

Add your Data with our Free Cloud Storage.

Step 4: All Done? Share and Collaborate with your contacts.

Conclusion

At present, things are looking bright for budding entrepreneurs. Startups and small businesses are getting huge traction and support from the government. On the other end of the spectrum, nearly half of new businesses die after a short period.

The primary reason for this is improper planning. This is where a business plan helps. It helps start-ups and large companies alike to grow rapidly and cope with failure and roadblocks.

The business plan templates highlighted in this post are just the tip of the iceberg. They have been handpicked specifically for startup businesses. It will help you devise a perfect business plan that will make sure your efforts are not going in vain. Everything you do will be effective and measured. 

Frequently Asked Questions (FAQs)