Business Plan Structure: The 6 Must-Have Sections
To answer every question an investor is looking for your business plan structure must have 6 essential sections. There is not one perfect business plan template that suits every business, but every proper business plan structure will have these sections.
Business owners and entrepreneurs often get extremely frustrated trying to use business plan template and software programs. It’s a simple fact that no business plan template works as a catch-all for every business.
Many times each of the 6 sections is broken down to include multiple sub-sections. The sections and sub-sections can be organized differently from business plan to business plan depending on what content should be highlighted to ensure the best ‘pitch’ for a particular business.
Here’s a rundown of the 6 sections that I include in every business plan regardless of the desired outcome of the business plan (investor funding, bank loan, IPO):
– 6 Sections Every Business Plan Structure Must Have –
Section 1. EXECUTIVE SUMMARY
Your executive summary should be a brief overview of the next 5 sections described below. Keep it short (1-3 pages max.), but include all the key highlights about your business. Since it’s really the ‘highlight reel’ of your business plan, you really should write your Executive Summary last. Yes, it’s the first section, but seriously write it last.
Section 2. COMPANY OVERVIEW
Your Company Overview should be a quick snapshot of 1) what you do; 2) what stage you’re at now; 3) where you plan to go; and 4) how you plan to get there. Most of these will be explained in more detail in the coming sections.
Here are the subsections that I generally use within the ‘Company Overview’ section:
- CURRENT STATUS
- THE COMPANY VISION
- MANAGEMENT (optional here, depending on if you want to highlight your management team early on)
- THE COMPANY OPPORTUNITY
Section 3. PRODUCTS AND SERVICES
This section is a no-brainer. You should be detailed in your descriptions of your products and services.
Section 4. INDUSTRY OVERVIEW
The main objective of the Industry Overview section is to convey to a potential investor that you really know your market. However, when researching and writing this section it’s an opportunity to really work on your financial projections by review your customer demographics and competition.
Here are the subsections that I generally use within the ‘Industry Overview’ section:
- TARGET CUSTOMERS
- COMPETITIVE ENVIRONMENT
- COMPETITIVE ADVANTAGES
Section 5. PLAN OF OPERATIONS
Now it’s time for you to show a potential investor that you have a game plan to actually make a profit and grow your business. You need to list out the phases of your development, launch, sales strategy, and growth strategy. And, include milestones with deadlines and costs for each phase or milestone.
Here are the subsections that I generally use within the ‘Plan of Operations’ section:
- OPERATIONAL MILESTONES
- SALES AND MARKETING STRATEGY
- GROWTH STRATEGY
- MANAGEMENT (if not included in the Company Overview section)
Section 6. FINANCIAL SECTION
Many times an investor or bank will skim the first 5 sections of your business plan and turn to the financials right away. All detailed financial sections should include these sub-sections:
- FINANCIAL OVERVIEW
- STARTUP EXPENSES AND CAPITALIZATION
- PROFIT AND LOSS STATEMENTS
- BREAK-EVEN ANALYSIS
- KEY ASSUMPTIONS
Section 7. APPENDIX (Optional)
I say that there are 6 essential sections every business plan structure must have, but I usually include an Appendix as Section 7.
An Appendix isn’t always necessary, but if your business plan turns out to be over 30 pages, you should consider taking out some of the more detailed descriptions and add them as appendices.