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If you’re starting a business, or if you're looking to expand your current one, you're going to need a solid, written business plan.

A good business plan provides structure and guidance for every aspect of your venture, and can help save you time and avoid financial mistakes. It can also be instrumental in helping you lock in funding for your venture while providing milestones and goals to measure your progress.

While writing a business plan can be time consuming, it doesn't have to be overly complicated. There are many resources and templates online that allow you to develop a good business plan.

You’ll have to provide the financial numbers, goals, marketing strategies and other elements, but once you've gathered that information, writing your business plan is likely going to be easier than you think.

This is one of the most critical tasks you can do to ensure your small business has a solid map to where you want to go.

How to write a business plan

The customary business plan has 10 key components that should always be included:

  • Cover letter: As with any proposal, your business plan should include your firm's name and address as well as contact information for owners and executives.

  • Table of contents: Break out the sections of the plan. Include page numbers.

  • Executive summary: This is a key part of the plan that summarizes your plan's main points. It should briefly highlight each section listed in your table of contents. Also, include your mission statement, which explains your business’ goals and values, in a short, formal summary. Write the executive summary after you've completed the rest of the plan.

  • Company description: Your business plan isn't just about where you want to go; it should explain where you've been. Include the history of your company - when you formed it, the number of employees, etc. - and identify your customers. You can also include your competitive edge and unique selling proposition (USP) here.

  • Product and/or service description: Briefly outline what product or service your business provides. How does a product work? What does a service look like from beginning to end for consumers? What makes it different? Keep the language simple here; avoid highly technical descriptions and industry buzzwords to give the clearest picture possible to the widest variety of readers. Explain how your products differ from the competition - or if there currently is any competition.

  • Market analysis: Understanding the market and industry you're entering helps you identify your competition, risks, customers and advantages. An overview of your industry's history, as well as current and projected trends, helps create a clearer picture of what your business should accomplish.

  • Management team: Having the right team members in the right positions is vital, and this section explains who fills each role. The length of the section will vary greatly depending upon the size of your business. It should provide a clear picture of how (and by whom) the company is being led.

  • Operations: This part of the plan is closely related to the management team section. It looks at how the daily operations will be completed and includes each person’s tasks. You may want to include an organizational chart. This is also an ideal place to include goals and projections, quality-control and risk-management measures, and information on suppliers.

  • Financial analysis: While this is one of the most important components of any business plan, it's particularly important for businesses or startups looking for funding. If your business is already operating, provide as much financial data as possible for up to the past five years, including balance sheets and cash flow statements. Then, create a financial forecast that includes income projections and expenditures. It's important to show how and when your business will become profitable.

  • Implementation plan: Now that you've outlined the essential components of your plan, explain how you’ll combine them to launch or grow your business. Provide a timeline, but be realistic with your expectations. List key target dates and objectives.

Benefits of a good business plan

Knowing how to write a good business plan will pay off in many different ways. Even if you aren’t seeking funding, it serves as an internal guide to what you want to accomplish and how you're going to do it.

The more detailed the plan, the better understanding you'll have of what needs to be done, what can be eliminated and where you need to improve or gather more resources. As employees or other partners come aboard, it helps ensure that all workers share the same vision and that you're all following the same path.

Editing your business plan template

If you find yourself struggling with developing your plan or have difficulty with certain aspects, such as financial projections, look for free resources to help simplify the process. Your bank may offer an interactive template, or you can use the Business Plan Tool provided online by the Small Business Administration to help break it down.

When you've completed your business plan, review it several times, looking for any typographical or grammatical errors or for areas that aren't explained as thoroughly as they could be. Invite friends and family members to review it and offer constructive feedback. Remember, this plan represents your business to investors, employees and managers; ensure it reflects you and your planned organization.

Creating a good business plan can increase the likelihood not only of a successful launch but also of longer-range success. To help further secure your small business, learn more about Nationwide's small business insurance policies.

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Product, coverage, discounts, insurance terms, definitions, and other descriptions are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in your individual insurance contracts, policies, and/or declaration pages from Nationwide-affiliated underwriting companies, which are controlling. Such products, coverages, terms, and discounts may vary by state and exclusions may apply.