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Step #2: Prepare a Business Plan

Prepare a business plan to help clarify your business idea, goals, strengths, weaknesses, and more!

Business Plan

A business plan serves as a strategy for your business, an in-depth marketing tool to educate others about your venture’s potential for success, and it is essential when applying for financing. A business plan can vary in terms of length and scope, but all successful business plans contain common elements. A plan should take into consideration the business and its environment.

Why is a business plan important?

  • Clearly and concisely explains your business idea, explains short and long-term business goals, and discusses what resources are available, and what is needed, to start and operate your business.
  • Required to apply to funding programs such as Starter Company, Futurpreneur, and Canadian Small Business Financing Program.

What are the benefits of having a business plan?

  • Helps you understand if your business idea is viable - based on the research
  • Identifies strengths, weaknesses, opportunities, and threats that apply to your business and industry
  • Introduces your business to bankers and investors to assist in securing financing/funding
  • Helps you, the business owner, stay on track when starting up, expanding, or selling your business

Business plan writing tips:

  • Your business plan should clearly explain your short and long-term goals, as well as how you will manage the resources you have to start and operate your business, as well what resources are needed now and in the future.
  • Explain your business idea as if the person reading it does not have any knowledge of your business or industry. Use market research to help strengthen the need or want for your product/service.
  • There is no specific length required for a business plan. The general guideline is 8-10 pages.
  • Write the Executive Summary last - it is a summary of all the sections in your business plan.

Simplify the business plan writing process

The interactive business plan builder by Business Link provides you with guidance and support when it comes to putting together a compelling business plan. This free interactive tool is for anyone - from aspiring entrepreneurs with a new business idea, to existing business owners looking to pivot their current business model or secure new funding.

Example Business Plan Structure
Title Page & Table of Contents:
  • A professional title page should include the business name, address, phone number, the name of the person who prepared the plan, and the date.
  • List the sections of the business plan (as outlined below) to allow readers to locate the information quickly and easily.
Executive Summary
  • A one-page summary that highlights the essential details of your business plan.
  • Includes a brief description of the ownership and management, products and services offered, financial objectives including projected annual sales and net income, marketing strategy and competitive advantage, major initiatives, accomplishments, goals, and the amount of money you expect to borrow and why.
  • If it is a new business, state why you are starting the business and how much you are investing into the business.
Company Outline
  • Description of the company, structure of the ownership, products or services offered, background of principals and management, mission and vision statements, and objects/goals.
  • Define your customer demographics, including age, gender, buying habits, lifestyles, and products and services they need or want.
Marketing Plan
  • Explain the business positioning in the market in terms of costs and pricing.
  • Develop a marketing strategy and budget. Explain your methods of reaching your target customers.
Industry and Market Analysis
  • Research the industry (the products and the trends) and describe and explain the markets in which you intend to operate in terms of area, size, customers, and competition.
  • Identify your niche and opportunities in the market and how you will take advantage of the opportunities and deal with the challenges.
Competition
  • Prepare a competitive analysis of the primary competition. Estimate their sales, strengths, and weaknesses.
  • Determine the scope of the market and how much of the market you can realistically capture.
  • Describe your competitive advantage.
Operating Plan
  • Provide an overview of production processes, required assets, risk analysis, and contingency plan.
Finances – Cash Flow Projections
  • Provide an overview of financial requirements to start up or expand your business, cash flow projections (usually for a two-year period), and a projected income statement. Break-even analysis and personal financial information may also be included. If already operating a business, you should include a balance sheet and an income statement for past years.
  • If you intended to borrow, outline how much you need and what will the money be used for. Identify assets to be pledged to secure the debt, including your personal contributions.
Appendices
  • These are documents that support the claims you make in your business plan. These may include market research, surveys, letters from potential customers and suppliers, resumes, personal financial statements, appraisals, asset valuation, product literature, catalogues, examples of advertising, pictures of the location, a floor plan, equipment quotes, major contracts, etc.

Free online business plan builder tools:

Useful Links & Guides:

Additional Services & Resources:

  • FedDev Small Business Services: 1-888-576-4444
  • TD Canada Small Business Services: 1-800-450-7318
  • Futurpreneur: 1-800-464-2923