Writing a business plan is an important step for an entrepreneur who wants to launch a company of any size. If you dream of opening a business in the U.S. or Canada, a solid business plan can help you secure funding and prepare for the future.
Many immigrants open businesses in their new countries. Dru Ann B. is a Remitly customer who owns a small business that supports her family in Canada and back home in Jamaica. She says that a strong business plan made a huge difference for her. She recommends getting assistance from someone who’s written one before, saying, “a little direction or guidance from someone else goes a long way.”
Ready to get started? Here’s what you need to know.
What is a business plan?
A business plan is a document that maps out your vision for your business. It establishes your business objectives and then describes how you will achieve them.
Why is a business plan important?
Even if you have all the capital you need to start your business, a business plan can increase your chances of success. That’s because it clarifies your goals and timeline, plus can help you plan for issues that may arise.
Business plans allow you to:
- Establish clear company goals;
- Build a brand vision and create a compelling company description to market your business;
- Identify potential weaknesses and challenges ahead of time;
- Become familiar with current market conditions and your competitors; and
- Predict your income, costs, and budget needs.
The process of writing a business plan can help you put your best foot forward. Dru Anne B. notes that through your market research, you might discover that you “need to adjust your model.” That’s a good thing, she explains, because it means refining your idea before you actually invest.
Do you need a business plan to start an immigrant-owned business?
Any entrepreneur who wants to start a business in the U.S. can benefit from a business plan.
As an immigrant entrepreneur, a business plan may help you:
- Apply for grants aimed at immigrant-owned businesses;
- Apply for business loans through U.S. banks; and
- Seek private investors for startup capital.
What are the most common business plan formats?
Business plans come in two formats: long (traditional) and short (lean).
- Traditional business plans are long-form documents that consist of paragraphs and may also include tables and charts. They usually take longer to produce and edit, but some lenders only accept these types of plans.
- Lean business plans present information primarily through bulleted lists, tables, and charts. They are typically easier and faster to write. Prospective investors or lenders may ask you for additional information if you submit a lean business plan.
How do you write a traditional business plan?
A traditional business plan usually has nine sections: executive summary, company description, market analysis, organization and management, service or product line, marketing and sales, funding request, financial projections, and the appendix.
An executive summary provides a quick overview of your company. It lets the reader know what to expect from the rest of the document.
The executive summary includes:
- A mission statement that outlines the purpose of your company;
- An introduction to your product or service;
- Basic facts about your leadership team and employees; and
- The location of your company and where you work.
If you’ll be using your business plan to find funding, include a quick summary of financial information and growth plans in this section too.
The company description provides details about your business offerings.
Some things to include are:
- Who your customers are (who will use or purchase your product or service)
- What problems your product or service solves or what needs it fulfills
- Why your business can uniquely meet that need or solve that problem
Imagine that someone has asked you “Why does your business exist?” and “Why should I choose your business?”
These questions will help you describe the value of your new venture.
The market analysis section requires research. Start by identifying your key competitors.
Once you’ve found them, learn the following about their businesses:
- What do they charge for their products or services?
- How do they market their business?
- What are their strengths and areas of opportunity in this field?
- What are the ways that you can provide a better customer experience?
After you finish conducting your research, describe your findings in 1-2 paragraphs in your business plan.
Organization and management
This section describes how you will structure your business and what specific people or general roles you’ll have at your company.
Include the following:
- Business structure: Are you a sole proprietor? Will you establish a C or S corporation? Is your business a partnership or a limited liability corporation (LLC)? In addition to identifying the type of structure, explain why it works for your company. If you haven’t chosen a business structure yet, a business attorney or certified public accountant (CPA) can give you advice on which structure to choose.
- Basic organization chart: Provide an outline of the people who will hold management positions at your company. If you have already hired your management team, detail the key qualifications and skills that they bring to your business. You may also want to attach their resumes.
Service or product line
This section brings your product or service to life and allows the reader to thoroughly understand what you will be providing to your customers.
Include the following:
- Benefits of your product or service: Why will people buy it or use it? What will they love about it?
- Life cycle of your product or service: How often will people buy or use your product or service?
- Intellectual property information: Are you filing for a copyright or patent?
- Research and development: If you have conducted research and development, provide detailed information about it. Remember to include any pictures of your product as well.
Marketing and sales
Unlike the other sections of a business plan, the marketing and sales section has no set rules for writing. This section explains how you will tell customers about your company and encourage them to buy from you or use your service.
You may consider mentioning whether you plan to advertise with:
- Print media like newspapers
- Television commercials and segments
- Radio commercials and segments
- Social media like Facebook, Twitter, Instagram, YouTube, Pinterest, and TikTok
- Direct mail
- Email marketing
- Cross-promotions with other businesses
If you plan to hire a firm to handle your marketing, then make sure to mention that in this section too. Add the firm’s name and discuss the services they will provide.
In this section, you’ll let investors, financial institutions, or grants know how much funding you need to get your company off the ground.
Follow these steps when writing this part of your plan:
- State how much money you need to launch and operate your business for the first five years.
- Detail how you arrived at this figure.
- Identify any existing capital that you already have and its source(s).
State whether you’re looking to borrow money or give an investor equity in your company:
- Outline the terms you’re looking for if you’re borrowing money.
- State what share of your company you are willing to give in exchange for an investment if you’re providing equity.
- Explain, in detail, how you will use the equity or borrowed funding. Will it pay salaries? Purchase equipment? Cover expenses until you begin to make profits?
- Add how you will pay off the debt or ensure a return on investment.
Providing realistic forecasts about how your company will perform is a compelling part of any business plan.
In this section, include:
- Income statements
- Balance sheets
- Cash flow statements
- Capital budgets
Begin with quarterly or monthly projections for the first year, and then make annual projections for the next four years. If you’re uncertain how to produce these documents, a CPA who specializes in startups can help you plan your forecasts.
This section is for any additional information and can include:
- Personal credit history
- Résumé for yourself and other key people in your business
- Letters of reference
- Other legal documents
The items in an appendix are labeled with a letter. For example, your personal credit history can have the header “Appendix A” and a letter of reference from a former employer can be “Appendix B.”
A few more tips
A business plan includes all the steps outlined above. Here are a few more tips to make your business plan stand out:
- Take a step-by-step approach.
- Highlight how many jobs your business will create.
- Hire a ghostwriter or proofreader.
- Ask a friend who isn’t familiar with your industry or product to read it over.
Your business plan won’t just help you launch your new company. It also serves as your roadmap for promoting and growing your small business after the launch. An up-to-date business plan can also make it easier to secure additional funding, purchase new equipment, or expand your offerings in the future.
This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant or otherwise guarantee that the content is accurate, complete or up to date.