Adapted from Microsoft Small Business Kit by Joanna L. Krotz, John Pierce, and Ben Ryan

Every business plan is a unique document because each plan details the specifics of one business. Yet your plan should share themes and an organizational format that are common to other business plans. This will help investors and other important readers to quickly understand your business idea and locate sections of interest.

This isn't a document you dash off. Most plans require two or three months of researching, analyzing, and writing (and reviewing and refining and rewriting). It can take up to 300 hours — or, in some cases, up to a year — to get the plan right.

Business plans generally run 20 to 30 pages, but they can range from 10 to 50 pages or more. The length depends on your preferences and the plan itself. But keep in mind that you're likely to be a more passionate reader than most. Put yourself in the shoes of your other readers. What do they need to know? What can be left for a later discussion or report after you've engaged their interest?

Plan organization

You must cover all the elements of the business and its strategies for growth and success. The following sections are generally included in a business plan:

Cover page

This includes your company name and contact information.

Executive summary

This is probably the most important section of your plan. In two pages or less, it should sum up:

• What your business will do.
• What your market opportunities will be.
• How you will make money.

Most readers start with the summary and then, if they're interested, go on to other sections. You'd be smart to write this section last, after you've thought through and written everything else. It will be a lot easier then.

Industry environment

Step back and think about what first sparked your enthusiasm to start this business. You must set it up so that someone who has no notion of your field or industry will understand why you're jumping in.

This section should also include:

• A description of any significant trends, industry innovations, or big players in the market.
• A summary of the current state of your industry and its future. This is a positioning overview that covers the market's driving forces as well as current and future opportunities. You're creating a map so that you can show where your idea fits in and why your company fills a gap or a need.
• Details of your business's target customers as well as your strengths in the marketplace.
• A company mission statement, if you have one.

Marketing

Your marketing strategy is the heart of your business. Without a marketing strategy, finances fall by the wayside. How can you make money if you don't know how to sell your product? Who are your customers? How will you find them? How much will it cost to acquire and service them?

Your marketing plan should include:

• A summary of your market position and goals.
• Your market objectives. Specific targets are more effective than vague announcements: "We will sell 150 widgets by the fourth quarter" is more convincing than "We will own the market in widgets."
• Your target markets.
• A strategy for each segment or market.
• Marketing expenses and resources, and how they will be allocated.
• The marketing channels you plan to use, such as e-mail marketing, radio ads, or highway billboards.
• Competitive scenarios. What are your moves if, say, a competitor lowers its price as soon as you launch?
• Communications strategy. Set up benchmarks to show when the marketing pays off. Connect the dots with the sales staff.
• The implementation or marketing calendar. Plans are great, but if you don't also designate responsibility, set deadlines, and hold people accountable, marketing efforts will fail.

The marketing section should detail the results of the customer or market research that you've done and explain what you foresee as difficulties in getting into the market (sometimes called "barriers to entry").

You want to answer some key questions for readers and investors, including:

• The size of your market.
• The percentage of the market (be realistic) that you intend to target.
• The cost to reach this target.

Do you have any special marketing advantages to offer, such as guarantees or distribution rights? Be sure that you cover those as well.

Operations

This is your tactical section. You need to provide details about:

• Office or facility requirements.
• Equipment needed or manufacturing capabilities.
• Human resources (staff and contracted or consultant).
• Systems for getting your idea up and running.
• Inventory control or quality assurance processes.
• The kinds of operation funds that this will take, including:
• Rents
• Leases
• Licenses
• Registration
• Production costs
• A floor plan of the space you've chosen, if your business is a manufacturing or production model.

Financial projections

This is your statement of what's coming in and what's going out. It should include:

• A detailed outline of your cash flow expectations, usually for a 12-month projection.
• A projected balance sheet.
• Projections for sales, expenses, and margins of profit.
• What it will take to get to breakeven and then to profitability, including the kind of cash drain you anticipate until then.

Tone will tell

It's easy to get bogged down in an avalanche of facts and figures when drafting a business plan. Don't. Walk a judicious line between narrative and statistics. You're telling the story of your business. You're making an argument for success (and perhaps backing).

Here are some tips to make your business plan more compelling:

Capture attention

Your executive summary must be both exciting and readable. Avoid all technical or industry terms and jargon. If you must invoke complicated terminology or concepts, define them briefly.

Put yourself in the mind of the reader

The plan is about the market and how you will make money, not about how smart you've been to come up with a fabulous new product. Be sure that you stick to the goal of the plan, which is to convince readers that your business is viable.

Be realistic

Don't avoid weaknesses, and don't gloss over strong competitors. Everyone who reads a plan is an interested, astute professional. If you leapfrog over problems or difficulties, you lose credibility.

Showcase your ending

Be sure that the last page is as dramatic as the first. Don't trail off into numbers or detailed explanations. Sum up with as much excitement as you began.

About the authors   Adapted from Microsoft Small Business Kit by Joanna L. Krotz, John Pierce, and Ben Ryan. Visit Microsoft Learning to learn more about this book and its authors.