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A business plan outlines your goals and your plans to achieve them. It also – and we’ll come back to this – helps you stay on strategy, outlining the best way to reach your chosen goals.

The type of business plan you need will vary. If your company is a start-up, your plan helps explain the business – to yourself, your team, and to outside investors. If you’re expanding your growing business and need funding, a formal plan is must-have to explain your vision to lenders.

As a start-up you’ll need to take the time to project sales, costs and expenses to know how much money you’ll need and when you’ll need it. If you’re trying to convince friends or family to invest in your new venture, these components show them your idea has potential, that you’ve taken the time to work out the finances, and that your team has the experience to get the job done.

In the case of an existing business with no plans for expansion, a business plan helps you manage the company and course-correct when markets change, obstacles arise or new opportunities appear. In these cases, your business plan can be a less formal and more dynamic document.

If you’re writing an informal document for internal purposes only, your business plan will be a short summary on a few pages. On the opposite end of the spectrum, if you’re hoping to meet with potential investors and raise money for your company’s growth, a longer, polished, more formal plan is the only way to go.

Regardless of the type of plan your business needs, here are 9 essential sections you need to consider. The amount of work you put into each section will depend on the intended use of your plan.

1: Executive Summary

Your business plan should begin with a brief executive summary providing a high-level overview of your business plan. If the purpose of your plan is to raise money, be sure to clearly outline the amount of money you’re requesting … and when you need it … in the summary.

Although your business plan begins with an executive summary, it should be the final section you write. If you’re trying to raise money, your executive summary is a pitch. It should use the information in your plan to present a brief, compelling argument as to why investors should choose to invest in you.

2: Company Description

Include the name of your business, its location, legal status (incorporated, partnership or sole proprietor), the type of operation (retail, wholesale, manufacturing, professional service), and a short description of what you sell.

You should also include a short history of your business. Is it a start-up? Or has it existed for several years? What is your mission statement or company focus?

3: Market Analysis

Do a complete analysis of the market for your service or product. Don’t skip this step. This exercise forces you to think about the best way to position your brand so you can realize the full potential of your product or service.

How big is your target market? Does it have a seasonal component? Who is your primary customer? What major trends are driving their behaviour or affecting the size of your audience? Who is your competition? How will you differentiate your brand from the major players?

4: Service or Product

Write a complete description of your service or product outlining its features … and most importantly its benefits for the end-user. This information will help you draft a unique selling proposition, or USP, that clearly differentiates your brand from the competition.

5: Marketing Plan

The marketing plan—how you will actually promote and sell your product – is the lifeblood of your existence. Without sales, you have no business.

How will you promote your product? Where will it be available for sale? Does your business require a sales force? Will you sell your product through retail outlets? What is the selling price?

Consider competitors. How are they promoting their products? Keep in mind the need to ensure their tactics are actually viable before you adapt their promotion plan.

6: Financials including Projections

Include current financial statements (an income statement, cash-flow projections and a balance sheet) in your business plan to show the current state of your business, as well as a 3-5 year history.

Once you’ve analyzed the market and set your business objectives, develop financial projections. Be sure to explain the assumptions you made to arrive at your figures.

7: Funding Requirements

If you’re trying to raise money to start or expand a business, include the amount of financing required, how you plan to spend this money, and when it’s needed.

8: Management Team

Provide a description of your management team, their roles and responsibilities and their qualifications. If you haven’t filled all your management positions yet, include a timeline on when your team will be complete. If labor shortages exist in your industry, how will you overcome this challenge?

9: The Review Schedule

You’ve got one simple yet critical step left: the review schedule. It’s as simple as marking the third Monday of every month as the day you’ll review your plan and ensure your business is on track.

Remember, it’s called a plan for a reason. Your business plan requires regular review and is never done. It’s a critical aspect of running a successful business. Dedicate the time to creating a plan if you don’t have one, and then make sure you stick to that review schedule. Very soon, you’ll see how it pays off.

There you have it, the nine essential elements. One way to get started on your plan, if you haven’t already, is to create a schedule with a deadline for each element, along with who, besides you, will be working on each piece.

Breaking the job into smaller pieces makes the project easier – one piece at a time, you’ll get it done. You’ll find that the exercise of both building it and using it is a tremendously positive one for your business.

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