Three of the most important things in every business plan?

A full-length business plan could contain the following sections:

  • Executive summary
  • Company legal description
  • Products and services
  • Marketing plan
  • Operations plan
  • Organization and management
  • Bios of key management
  • Personnel plan
  • Intellectual property and other key assets
  • Financial plan
  • Appendix

Which sections do you think are the most important for an existing small business plan in most situations?

1.      Executive Summary

This is one of the shortest sections of a business plan, but the one you should spend the most time working on. Whether your business plan is 5 or 30 pages, an executive summary must recap all of the material in your plan in only two pages. The reason this section gets so much attention is that it might be the only section the reader looks at when making a decision to go forward or stop.

To paraphrase an old proverb, “you can tell the quality of a business plan from its executive summary.”

The executive summary is the ultimate elevator pitch where you introduce the idea, provide background, talk about approach and results, and convey confidence that you will be successful. When you get the reader excited about your business idea, they will be inclined to explore it further. The executive summary is much more than a summary; it is your call to action.

In one paragraph, the executive summary should include a description of your business and the customer problem being uniquely solved so the reader understands what you are trying to achieve. The marketing paragraphs should include information about the size of the market, sales forecast, demographics of your potential customers and competition, and your competitive advantages. In the operations/staffing/management paragraphs, demonstrate management’s leadership and industry experience, along with a few key details about the location, staffing, and operations.

The financial section of the executive summary should include the projected income and cash generated during the first three years, and if you are seeking funding, a clear statement of how much is needed to fund the project.  And of this sum, show how much you will be investing versus the amount being sought from the funder.

Remember that while the executive summary appears first in the business plan, it should be written last since it is the summary. A business plan is developed from the bottom up, so you need to work out all the details before you can write the summary.

2. Key Management Bios

With a limited track record and usually few assets, the success of a small business is typically a bet on the owner. So this section must convince readers that the bet is a good one.

Include a one-page bio on each of the key people involved, which should be written in a style that demonstrates: “been there, done that, and have that.” You want to demonstrate that you have the technical chops for the business as well as the leadership skills. Where there might be experience/skills gaps, mention how you plan to add others to the team to provide this expertise.

3. Financial Plan

One of the final elements in your business plan is the financial statements. While the financial plan is a very important section, it’s appropriate for it to come last, because if the executive summary is a discussion of all that is to follow, the financial section is a recap of all that precedes it.

The products and services, marketing, operations and personnel sections demonstrate that the business idea is feasible, but it’s the financial section that demonstrates it is viable.

For many, tackling this section last is fine because it’s the one plan element that most entrepreneurs dread. They frequently feel like they have hit a wall when it comes to writing this section, and they blame it for holding up their business plan. Typically this is because they don’t understand it, are afraid of it, or have made it unnecessarily difficult because they haven’t carefully completed the rest of the business plan. Don’t let this happen to you. Seek guidance from a SCORE mentor or other free services as mentioned 

 Financial statements are charts with lots of numbers and few words describing what they are all about. Therefore, it is advisable to have an introductory page in your financial plan explaining in plain English the key assumptions and how each one was determined. If you can convince the reader about the reasonableness of the assumptions, then the sale has already been made when they read the financial statements.

Key Lessons

  • The executive summary, key management bios, and financial plan business plan sections are critical and should be included in all business plans.
  • Additional sections can be added to these three when targeting specific purposes and audiences.
  • It’s imperative to get readers excited about your business idea from the outset in the executive summary, or they may not read any further.