Learn more about planning a business launch.
By its nature, a business plan requires you to project how events will turn out in the future. If the assumptions on which you base your planning are sound, the results of your operations may be very close to what you predicted. Over time, however, small deviations add up, and a plan that accurately predicted how your first few months would turn out will become increasingly inaccurate. So, how far out do you plan?
As a general rule, for an "average" business, a five-year plan is a reasonable starting point. The level of detail will drop as your plan covers periods further into the future. The cash flows that are tracked weekly or monthly during the first year of operation may be projected by quarter in the second year, and annually in the third through fifth years.
After you've considered the purpose of your plan and done some background preparation, it's time to consider the actual elements that you'll include in the written document.
A business plan customarily has certain elements or sections. The following list of plan elements are presented in the order in which they usually appear in the plan. But don't feel constrained to follow this exact format if another way makes more sense because of the nature of your business.
In any event, it pays to at least mention all the major issues listed below, even the ones that are relatively less significant to your particular business. Someone who's reading your plan will be more confident about your assessment of the situation if you identify such issues and resolve them, however quickly.
Common Components of a Business Plan
You want your plan to look professional and be a useful tool. There are a number of things to do to ensure that is the case: