The Standard Business Plan Format
If you’re tasked with formatting a standard business plan, which is many times, is all that stands between you and investments, loans, and partnerships, then it is in your best interest to take time to curate a business plan that follows the worldwide accepted format. You only get one shot at making an impression on the people that can make or break the future trajectory of your entity, which is why you want to wow them with professionalism that oozes from a properly formatted and perfectly curated business plan.
Humans prefer predictability, structure, and organization. We don’t like the unknown, and we don’t like to be surprised. Therefore, surprising your potential investors with a “creative take” on business planning is not a strategic game plan moving forward.
First, we’re going to look at what a business plan is and why you need it, followed by a breakdown of our recommended business plan structure below.
What is a Standard Business Plan?
A standard business plan is an organized outline that covers 9 major aspects related to your company, from strategy and marketing, to an overview of the industry and your ideal buyer persona. It’s a neatly compiled summary of everything that relates to your business, and more importantly, how the business predicts it will generate sustainable revenue.
Your business plan, in essence, should present to the venture capitalist, banker, or investor exactly what they expect to see, which is why business plans are not the time to deviate from the predicted structure.
Following a standard business plan outline will keep you organized, on track, and presentable to everyone inquiring.
Take Your Time Compiling Information
As we will outline below, there is a specific format and numbering sequence that is expected in every business plan. However, we do not recommend that you follow this format in the actual creation of the business plan. Something like the executive summary and overview, which comes first, should actually be drafted last. Why? By the time you’re done compiling all of the data, stats, and information for the rest of the plan, you’ll have the most comprehensive viewpoint of the business for the drafting of the overview.
Remember: every business is different, which means we can’t necessarily say where you should begin in the drafting of its structure. What we do know is that it’s in your best interest to follow the predictable outline that we’re going to detail below.
The Perfect Business Plan Outline
Today, business plans are used as an internal roadmap for the overall management of the company, considering that pitch decks have become the integral part of fundraising in the business world. Although there are certainly different versions you can consider, here is the outline we recommend at this time:
- Executive Summary
- Company Overview
- The Opportunity
- Products & Services
- Marketing Plan
- Operational Plan
- Management & Organization
- Financial Plan
Let’s look at these 9 business plan outline sections.
- Executive Summary:
The majority of business personnel agree that the executive summary is the most important part of the entire business plan. The executive summary is the introduction into the company, and much like the introductory paragraph to a book, will either entice investors to keep reading, or encourage them put the pitch down. As we mentioned above, this section should be written at the end once you have compiled all of the necessary information to help you create a clever, catchy, supported, and brief executive summary that touches on the most important information pieces in the least amount of words.
In this tricky summary, we recommend that you concisely highlight the following topics:
- Business concept: A brief description of the business, the products, and the market it will be selling in. Also mention the competitive advantage.
- Financial details: Communicate sales, profits, and returns on investments. Also clearly outline the capital needed as part of this investment.
- Current state: Cover the present overview of the company, the key players, the standing, and so forth.
- Achievements: Lastly, take some time to discuss success, like patents and prototypes, that prove the company is already a winning investment.
We recommend keeping the executive summary to one page, or even less if possible. If you can communicate this information in just two to three paragraphs, you are more likely to keep investors hooked.
- Company Overview:
The general company overview customarily follows the executive summary when presenting a business plan. This overview is your chance to detail a description of the company and the business that it engages in. Generally, this portion of the business plan should cover:
- Company name, company entity, assets
- Company mission statement
- Company goals
- Company industry details
- Company strengths
Considering you will have entire sections that go over strategy, marketing, operations, and people in the latter part of the business plan, this is not the time to try and cram every little detail into a few pages.
For example, instead of detailing the industry and everything that goes on, cut right to the point and classify the business, ie. wholesale, business retail, manufacturing, etc. Provide some quick numbers indicating how big the industry is and why the industry is popular today. Use this opportunity to bring up different trends that are indicating the industry is only going to grow in size and popularity. This is a great place to throw in a few statistics to back up your point.
Next, cover the target market, and how you plan to distribute the product or service to the people in this target market. Briefly touch on the support systems, like advertising and customer service strategies, that are going to enhance your ability to reach into this target market.
Lastly, mention how the business sis going to make a profit, or if you are applying for funding, how that money is going to make the business more profitable.
Length will depend upon the proposition, but we recommend describing the industry in one paragraph, the product in one paragraph, and the business in three paragraphs.
- The Opportunity
Now is your time to be a salesman and detail the opportunity, or the potential, for the business and the industry in which it operates. This is where some serious research can uncover winning ideas, stats, and numbers that you can share to really impress your audience.
Describe the gap that exists in the market right now, and explain how this gap came to be. Next, describe how the gap can be filled or fixed, leading into why your company is the solution to this problem.
Look at the industry as a whole, and cover the forces that are affecting the entire industry, like barriers to entry, supply, demand, and competition. Are there high capital costs? High production costs? How will you overcome the obstacles? Provide answers to every single question.
Next, there’s the customer. Who are the customers? Do they have a say in prices? Do they have a lot of competitors to consider when purchasing? Are their suppliers and are they limited? Are their substitute products or services comparable to yours? Are your competitors formidable? How will you stack up against the competition?
Lastly, cover the market as a whole, looking at the size of the market, the pace at which the market is growing, what percent of the market that your company will own, and any other major trends in the industry that support your value proposition.
Overall, in this section you want to cover the opportunity, the industry, and the market, which can be done in about two to three pages. Definitely use this as a chance to showcase your research and unique attributes that make you and your company the answer to all of the above questions.
- Products & Services
Now it’s time to look at the actual product or service your company is creating and distributing into its market. How are you solving the problems above with your product or service? It’s time to look at the definition of the core product or service and really outline, clearly, what it is that you are creating.
Is your product or service at a development stage? Does it need funding to reach a further stage? What is the current price of the product? Do you anticipate the price is going to change overtime? How does this price relate to the greater market?
Provide screenshots or diagrams of the product or service as it is right now. You want to provide as much proof as possible that investment funds will help you complete the picture. Also cover past testing results and information or statistics that prove the likely success of the product or service.
Lastly, showing investors your dreams and ambitions is never a bad idea, which is why you want to discuss the future products and services you are going to create once you get the proper funding. This communicates that you are already thinking ahead and confident that your company is ready to dominate its niche.
You can safely cover this section in one to two pages, depending upon how many images you include. This is an easy way to throw in some imagery and break up all of the heavy text from the first few sections.
- Marketing Plan
After the executive summary, this marketing section is probably the second most important portion of your business plan. This section holds the key information that all financiers and investors are going to want to know, covering the cold hard numbers that really bring everything together.
When drafting your marketing plan, we recommend that you cover the following:
- Marketing decisions regarding the product or service
- A detailed description of the target market and how you plan to reach them through marketing
- How the product is presently perceived by customers
- The pricing strategy
- The overall sales and distribution channels you are going to leverage and why
- The overall promotion strategy and a breakdown of advertising, public relations, and social media marketing
Here is where you will outline the product pricing and costs. You can also go in-depth as to how you can lower these costs, which means more of a profit will be generated by the end of the equation.
To arrive at distribution channel selections, spend time researching the competition and see how they are reaching into your target market. Channels depend upon the size of the market and the industry.
Overall, the promotion strategy should detail an advertising budget, an organization of the media schedule in the coming quarter, and creative ideas/slogans for marketers to use in the future. Do your homework here.
As a critically important section, it’s understandable to take up two to three pages here.
- Operational Plan
Although this section may be less interesting, it’s still a necessary information trove for those looking to take over the business operation – or simply fund it. Here is where you go over the daily schedule of the business, the location, equipment, people, and processes required to make it run. Look at the capital expenses required to help the business run on a daily basis, as well as the necessary skills and materials needed to make the product or service.
Additionally, consider touching on a description of the operating cycle, materials that are outsourced, and the cash payment cycle. This is a great place to include financial tables to back up your information, as well as outside factors like economic growth or stagnation, local markets, and regulations that can help, as well as, hurt the operation.
In this section, you are going to communicate the people behind the company making it run every day. You should, at the very least, cover a list of the founders and their relevant experience, a description of who is managing the operation on a day to day basis, an organization chart that breaks down the employees if you have more than 8-10 with the operation, and then a breakdown of the logistics.
In the logistics section, you will provide an overview of who is responsible for what, under which department, and management coordinating the department. Aside from the managers, you will also want to mention the type of support staff that is needed to ensure the business runs smoothly every day.
Lastly, touch on potential hires for business expansions. You can keep this section brief, covering half a page to one page of text.
- Financial Plan
Before anyone is going to put money down behind your business, they want to know the overall financial plan. Does it make sense for them to put their money into something you’ve created? This is the portion of the business plan outline where you want to be honest – seasoned investors know when companies are skewing the numbers.
At the very least, we recommend that you include:
- Balance sheets
- Track record from the past 2 years
- Break even analysis
- Cash flow projects
- Income and expenses
- Projections through the first thru fifth years
It’s always good to go above and beyond, which is why you can also include startup cost and capital requirements, as well as loan requests. The startup costs should be thoroughly broken down, covering things like the development of a physical product or intellectual property.
If you are planning to fundraise, include a repayment schedule for any loans that are required, the use of the funds, and the milestones you expect to achieve along the way.
Use neatly drafted graphs and images to project much of this information, making it easy for investors to digest. Keep this one to two pages.
This is where you can include all other information that didn’t necessarily make it into the business plan. Appendices is a great place to attach contracts, appraisals, continued research data or findings, licenses, team member information and resumes, articles of incorporation and status, and any trademarks or patent registrations that will help you stand out from the competition.
Since this is the end of the plan, don’t worry about brevity as much here. Chances are, investors will simply sift through it until they are find exactly what they are looking for at a date in the future.
Therefore, your appendices can be as long or as short as you want.
How to Write a Business Plan
Now that you have the nuts and bolts down as it relates to the numbering, formatting, and configuration of your business plan, we have a few tips for the actual written content you are going to be presenting to investors.
- Keep It Simple:
Many times, the potential investors are not going to have the same expertise on the topic as you are. If you work in a field like medicine and pharmaceuticals, try and keep the medical talk to a minimum. You want to make the business plan easy for people to understand, while still underscoring the most important elements.
- Leverage Media:
Humans are visual creatures. They don’t want to stare at pages and pages of tiny text with no spaces. Use pictures, infographics, diagrams, and more to really add a three-dimensional aspect to your business plan. Bring your services and products to life.
- Brevity is Key:
No one wants to sit through a 3-hour long business plan presentation. We simply weren’t built with that kind of attention span. Where possible, keep each section brief. That doesn’t mean you need to leave information out; rather, find more creative ways to say what you need to say in a fraction of the words.
- Don’t Be Shy with Supporting Documents:
As part of the appendices, never skimp out on supporting documents. Even if the investors don’t ask to see that specific document, come prepared with this portion of the business plan.
- Always Consult Editors:
Your eyes can’t possibly catch every discrepancy or typo. Therefore, it’s always recommended to bring on a second pair of eyes. We recommend having two different people edit the plan, as well as two different people read through the plan to check for consistency and clarity.
How to Format a Business Plan
Overall, the content of your business plan is more important than the visual presentation of the business plan. Spend more time worrying about the actual information that you are communicating to your investors. However, it doesn’t hurt to add a clean and professional formatting touch when it’s all said and done.
For general formatting, we recommend using single spacing with an extra space between paragraphs. If you plan to print and distribute the plan, use a simple serif font like Baskerville that makes it easy for everyone to read along. If the plan is going to be read from a screen, consider a sans serif font like Verdana. That kind of font structure converts better for visuals. Plus, research backs up these selections.
As for font size, try to keep it to 12 point. 10 point can be strenuous on eyes. If you feel like you need 8 or 10 point to make the plan appear “smaller” in size, then we recommend taking time to edit the plan and finding ways to say things with fewer words. The same rule holds true for margins: one-inches on all sides to make the plan readable while also safeguarding for staples and so forth.
Like your research papers in high school and college, cover pages are a great way to make the entire booklet appear professional and friendly upon distribution. On the cover page, feel free to include your logo, tagline, and a value proposition alongside the imagery, plus your contact information.
Lastly, skim through the plan and check to see if any paragraphs are broken up between pages, or if imagery formatting looks incorrect, creating big empty white spaces on random pages.
The Perfect Business Plan
Now that we have gone through writing, creating, and formatting the perfect business plan, it’s time for you to get to work! Start researching, compiling information neatly, and taking your time to create graphs and images that can communicate your points in less words and with more exciting color and graphics.
Use our blueprint standard business plan outline here to make it easier.