Strong, successful businesses write effective business plans that guide them through expansions and lean times. These documents also serve as roadmaps that improve your ability to gain funding and investors. Therefore, as a business owner or entrepreneur, you should create an effective plan before opening your doors or soon after. However, choose the format that works best for your company.

Lean Plans

A lean plan allows you to start your business quickly because it is shorter and simpler than traditional options. Instead of a long, written document, these options have charts and visual aids that address a limited number of key factors.

Your lean plan should include your strategic partners, including subcontractors, vendors or manufacturers you have set up for your company. You should also discuss any resources you have acquired. Outline your intellectual property, machinery and other capital and key staff members.

Identify your target market. Narrow it down as far as possible by going further than simple demographic profiles. Then, show how you will interact with your existing and potential customers. Discuss the channels you will use to contact and interact with your customers.

Like other plans, yours needs to discuss the things your company will do, from production to service provision. Reveal your competitive advantages and value proposition.

Your next section should deal with your costs and revenues, including how you will make money and how much it will cost you to make that money. List all your revenue streams and costs.

Traditional Plans

A traditional business plan has much more information than a lean plan. Companies typically use them to gain funding. Although most companies use a similar format, you can change the sections of the plan to suit your needs.

Start with an executive summary of the rest of your plan. Then provide a company description, including your legal structure and management. Include your mission, vision, values and mission statement. Address how your company solves a specific problem for your target audience.

Instead of simply providing a description of your target market, you need a full market analysis that explores your prospective customers, competition and market trends. Include how you will outperform your competitors. Include the products and services you plan to offer, where you are in the lifecycle and your selling strategy.

Your final sections should include your current and projected financials and any requests for funding you have.

Customize your business plan for your specific company and purpose. Choose the format that best serves your company’s needs.