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Bank Business Plan Template

Written by Dave Lavinsky

Bank Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their banks.

If you’re unfamiliar with creating a bank business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bank business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Bank Business Plan?

A business plan provides a snapshot of your bank as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Bank Business

If you’re looking to start a bank or grow your existing bank, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bank to improve your chances of success. Your bank business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Banks

With regards to funding, the main sources of funding for a bank are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for banks.  

Finish Your Business Plan Today!

How to write a business plan for a bank.

If you want to start a bank or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your bank business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bank you are running and the status. For example, are you a startup, do you have a bank that you would like to grow, or are you operating a chain of banks?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the bank industry.
• Discuss the type of bank you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of bank you are operating.

For example, you might specialize in one of the following types of banks:

• Commercial bank : this type of bank tends to concentrate on supporting businesses. Both large corporations and small businesses can turn to commercial banks if they need to open a checking or savings account, borrow money, obtain access to credit or transfer funds to companies in foreign markets.
• Credit union: this type of bank operates much like a traditional bank (issues loans, provides checking and savings accounts, etc.) but banks are for-profit whereas credit unions are not. Credit unions fall under the direction of their own members. They tend to serve people affiliated with a particular group, such as people living in the same area, low-income members of a community or armed service members. They also tend to charge lower fees and offer lower loan rates.
• Retail bank: retail banks can be traditional, brick-and-mortar brands that customers can access in-person, online, or through their mobile phones. They also offer general public financial products and services such as bank accounts, loans, credit cards, and insurance.
• Investment bank: this type of bank manages the trading of stocks, bonds, and other securities between companies and investors. They also advise individuals and corporations who need financial guidance, reorganize companies through mergers and acquisitions, manage investment portfolios or raise money for certain businesses and the federal government.

In addition to explaining the type of bank you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of clients with positive reviews, reaching X number of clients served, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the bank industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the bank industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your bank business plan:

• How big is the bank industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your bank? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your bank business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, small businesses, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of bank you operate. Clearly, corporations would respond to different marketing promotions than individuals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other banks.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes trust accounts, investment companies, or the stock market. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of bank are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide loans and retirement savings accounts?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of bank company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide savings accounts, auto loans, mortgage loans, or financial advice?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your bank. Document where your company is situated and mention how the site will impact your success. For example, is your bank located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your bank marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your bank, including reconciling accounts, customer service, accounting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign up your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your bank to a new city.  

Management Team

To demonstrate your bank’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing banks. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bank or successfully running a small financial advisory firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer sign up bonuses? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bank, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bank:

• Cost of furniture and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your bank location lease or a list of accounts and loans you plan to offer.  

Writing a business plan for your bank is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bank industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bank.

Don’t you wish there was a faster, easier way to finish your Bank business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business plan consultant can create your business plan for you.

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You have a business plan. What’s your retirement plan?

Planning options to consider in building a retirement nest egg as a business owner.

A family-owned business often represents more than half the value of the owner’s estate. Consequently, if much of your net worth is tied up in the business, you may not be as well-diversified as those who have a more traditional retirement portfolio. Remember that unlike a salaried employee, it’s up to you to fund your own retirement. Do you have a strategy? Are you relying on being able to sell your business for a sum that will enable you to enjoy a financially secure retirement? If you haven’t given further thought to that life stage, it may be time to consider some other options for building your retirement nest egg.

Prashant Patel, vice president, High Net Worth Planning Services within RBC Family Office Services, says many owners overestimate the value of their business. “You have to prepare for the worst,” he says. “It may take longer to sell or to transfer the business to management or family, and being over-weighted in reliance on the business for future retirement income is equivalent to someone betting their entire retirement on one stock,” Patel says.

Holding some of your retirement savings outside of the business can reduce your risk. If you withdraw profits, this may protect them from future business losses. By paying yourself a salary, in addition to or instead of taking dividends, you can create an opportunity to benefit from generating Registered Retirement Savings Plan (RRSP) contribution room or Individual Pension Plan (IPP) pensionable service.

IPPs are designed to reduce uncertainty about your future income by paying you a steady stream of income upon retirement.

An IPP is a defined benefit registered pension plan established by an incorporated company to provide enhanced retirement benefits and tax efficiencies for business owners, incorporated professionals and key employees. An IPP usually has one individual member—either the business owner or a key employee. It can also be extended to your spouse, if they are employed by the same company.

Although there is no minimum age or income level to set up an IPP, typically business owners or incorporated professionals earning T4 income and are age 40 or older tend to reap the most benefit from this retirement saving option.

Higher contributions

Your business or employer makes annual contributions to the IPP over time and receives a tax deduction. The corporation’s IPP contributions replace your contributions to an RRSP. Similar to an RRSP, contributions grow in the IPP on a tax-deferred basis. Since an IPP is designed to give you a defined amount of income at retirement, the older you are, the more money the company can contribute to the plan on your behalf.

Contributions will also vary depending on your past earnings and length of service with the company.

In addition to annual contributions, your business can potentially make a large contribution when the plan is initially set up to cover your previous years of service prior to the IPP being established, going back as far as 1991. Additional tax-deductible contributions may also be made to the IPP to make up for investment returns in the plan that are less than the 7.5 percent expected actuarial interest rate with inflation adjustments (in some provinces this is a requirement).

Creditor protection

RRSP assets are generally only protected from creditors in the case of personal bankruptcy. That means for the vast majority of business owners and incorporated professionals, RRSP assets remain at risk. Because it is a trusteed arrangement and a pension, an IPP may afford substantial protection from creditors. It is essential that you speak to a qualified legal advisor regarding any asset protection options available to you.

Locked-in funds

As the IPP is a registered pension plan, the funds in the plan are locked in both during your working years and during retirement under provincial legislation (with exceptions in certain provinces). This means there is less flexibility compared to an RRSP when it comes to withdrawals from the IPP.

You can receive income payments directly from an IPP, or transfer some of the IPP’s funds, within legislated limits, to a locked-in plan. Some provinces allow additional pension income flexibility by unlocking the funds in special circumstances.

Administrative costs

IPPs come with higher administrative costs compared to an RRSP. There are set-up costs, annual administration fees and mandatory actuarial valuations. These costs, however, are tax-deductible to your business, reducing the effective cost.

Note: The information provided is a selection of potential options to consider. As part of overall planning, it is important to speak with your qualified tax and legal advisors to determine whether these, or other, strategies may be suitable and to ensure your personal circumstances and goals are appropriately accounted for.

This document has been prepared for use by the RBC Wealth Management member companies, RBC Dominion Securities Inc.*, RBC Phillips, Hager & North Investment Counsel Inc., RBC Global Asset Management Inc., Royal Trust Corporation of Canada and The Royal Trust Company (collectively, the “Companies”) and their affiliate, Royal Mutual Funds Inc. (RMFI). *Member – Canada Investor Protection Fund. Each of the Companies, RMFI and Royal Bank of Canada are separate corporate entities which are affiliates. “RBC advisor” refers to Private Bankers who are employees of Royal Bank of Canada and licenced representatives of RMFI, Investment Counsellors who are employees of RBC Phillips, Hager & North Investment Counsel Inc. and the private client division of RBC Global Asset Management Inc., Senior Trust Advisors and Trust Officers who are employees of The Royal Trust Company or Royal Trust Corporation of Canada, or Investment Advisors who are employees of RBC Dominion Securities Inc. In Quebec, financial planning services are provided by RMFI which is licenced as a financial services firm in that province. In the rest of Canada, financial planning services are available through RMFI, Royal Trust Corporation of Canada, The Royal Trust Company, or RBC Dominion Securities Inc. Estate and trust services are provided by Royal Trust Corporation of Canada and The Royal Trust Company. If specific products or services are not offered by one of the Companies, clients may request a referral to another RBC partner. The strategies, advice and technical content in this publication are provided for the general guidance and benefit of our clients, based on information believed to be accurate and complete, but neither the Companies, RMFI, nor Royal Bank of Canada, nor any of its affiliates nor any other person can guarantee accuracy or completeness. This publication is not intended as nor does it constitute tax or legal advice. Readers should consult a qualified legal, tax or other professional advisor when planning to implement a strategy. This will ensure that their individual circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment factors are subject to change. This information is not investment advice and should only be used in conjunction with a discussion with your RBC advisor. None of the Companies, RMFI, Royal Bank of Canada nor any of its affiliates nor any other person accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. In certain branch locations, one or more of the Companies may carry on business from premises shared with other Royal Bank of Canada affiliates. Notwithstanding this fact, each of the Companies is a separate business and personal information and confidential information relating to client accounts can only be disclosed to other RBC affiliates if required to service your needs, by law or with your consent. Under the RBC Code of Conduct, RBC Privacy Principles and RBC Conflict of Interest Policy confidential information may not be shared between RBC affiliates without a valid reason.

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How can I borrow money to start my business?

Starting a business is exciting. But without the right financial support, you could struggle to get started. A lack of trading and credit history can make people worried about borrowing money to start a small business. But there are plenty of funding options, from bank loans and private investments to government grants.

If you’re considering borrowing money to start a business, there are some things to consider to give you, and your business the best chance of success. 

For business finance: Security or guarantees may be required. Product fees apply. Lending is subject to status, and for business use and over 18s only. Any property or asset used as security may be repossessed or lost if you don’t keep up repayments.

Getting started

Personal savings and support from family and friends can be options when starting a business, however many start-ups still need external funding.

Here are some things consider to make your business as attractive as possible:

Drawing up a business plan

A business plan is a concise summary of your company’s purpose and long-term vision. This document tells investors and lenders why they should take a risk on you, using detailed strategies and evidence-backed claims. It could also include financial projections, product details and competitor analysis.

Your plan allows you to flag any sustainability ambitions too. This may open the door to more grant or funding opportunities.

Preparing for repayments

Repayments are vital to consider when researching how to get a loan to start a business. Think carefully about what you could realistically afford to pay back each month. Missed repayments can damage your credit rating and potentially your business.

Budgeting for different costs

Accuracy is key to effective business borrowing. Realistic estimates  should help you pin down your exact needs and avoid overstretching your budget. For example, how many employees do you hope to take on? And how do your financial forecasts stack up against potential overheads?

Understanding your business credit score

A business credit score   is a number from zero to 100 that credit agencies and lenders use to track your reliability with money. Improving this score could boost your creditworthiness and ability to borrow cash.

Understanding cash flow

Cash flow is another important factor to consider when it comes to start-up funding. It may influence decisions like how much you can borrow to start a business.

In the business world, cash flow shows the balance of money heading into and out of a company at a specific point in time. It offers a quick snapshot of your financial position for lenders and investors.

A positive cash flow means your income is greater than your outgoings. It shows that your business can comfortably cover its expenses and potentially invest in new areas .

Alternatively, a negative cash flow suggests more money is leaving your business than coming in. This makes it harder to cover bills and running costs, often making it less likely you’ll get investment. 

Cash flow is a useful indicator when working out the affordability of loan payments. A negative balance suggests you might struggle to keep up with large repayments.

Funding options for your start-up

Each start-up is unique, with specific customers and target markets to keep in mind. The good news? There are a wide variety of funding options to match these demands. Some are even tailored towards getting new potential businesses off the ground. 

With everything from loans and grants to overdrafts and private investments, it can feel like a crowded market. 

What to consider when choosing a funding option:

• Be clear on the amount you need. Loans and grants tend to provide smaller one-off payments. For larger sums, you might wish to approach private investors instead.
• Think about the long-term costs. Interest and charges aren’t the only potential costs when you borrow money to start a business. Private investors may ask you to give up some control or request an equity stake, for example.
• Remember your business goals. The right funding option might not always be the cheapest. You’ll also need to decide whether it matches the speed and scale of your ambitions.
• Consider your risk appetite. Loans and business credit cards carry the risk of missed repayments. With private investors, you could face pressure to hit certain targets or disagree over strategy decisions.

Where can you borrow money to start a business?

Banks, specialist lenders and crowdfunding platforms are just the tip of the iceberg when it comes to start-up funding providers. A range of online networks may also connect you with private investors. Meanwhile, government agencies like UK Research and Innovation could point you in the direction of grant funding.

It’s important to carry out due diligence, whichever route you go down. Choosing a reputable lender should give you peace of mind about the long-term security of your funding. Reviews and testimonials offer valuable insight into the experiences of other businesses. They can reveal just how much a lender understands and effectively collaborates with start-ups.

What will lenders look at when funding a start-up?

Ready to begin a funding application? Here are some of the factors your lender might consider:

• Credit scores . A bank may check both your business and personal credit ratings to see how trustworthy you are.
• Financial performance. You might be asked for a breakdown of your income and cash flow, along with projected profits and turnover.
• Existing debts. Any outstanding or previous borrowing could be taken into account.
• Business plan. A watertight, evidence-based summary may help to win lenders over.

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Choosing the right business funding could drive your company to the next level while building on its early foundations. But with so many options now available, it’s important to take your time and track down a solution that matches your needs. Repayment terms, borrowing costs and eligibility requirements are just a few essentials to bear in mind.

Do you need to borrow money?

You don’t necessarily have to borrow money to start and grow a small business.

A range of grants and government schemes are available too, covering different regions, sectors and technologies . You’ll often find that these don’t have to be repaid, potentially reducing or even removing your borrowing needs.

It’s also useful to ask the following questions before starting any borrowing application:

• How much will it cost? What interest rate and fees could you be charged?
• What are the repayment terms? How many months will it take to pay the agreement off? And how does that fit with your financial forecasts?
• What does it mean for your savings? Building a savings pot  can give entrepreneurs a safety net during leaner periods. Would a loan or other borrowing arrangements hit your ability to save?

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How to Build the Best Business Plan Ever: Step-by-Step Guide

By Diane Amato

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Published March 21, 2023 • 8 Min Read

Creating a business plan is a crucial task for any business, and one which requires you to be thoughtful about the direction of your business, consider the goals most important to you, and how you will go about achieving them.

A solid business plan will give you the confidence that you will find success, and may even reveal some gaps and risks. In fact, studies show entrepreneurs who start with a written business plan are more successful than those who don’t.

Whether you’re creating a roadmap to follow as a new business owner, need a pitch to attract investors or a document to engage stakeholders, a business plan is a living document you’ll want to update regularly as your business, goals and circumstances evolve.

While some business owners consider writing a business plan an overwhelming step, it doesn’t have to be. Creating the best business plan ever is a matter of breaking it down into individual steps — and then taking them one at a time.

7 steps to building a business plan.

1. introduction.

The substance of your introductory section (beyond your cover page and table of contents) is the Executive Summary . The Executive Summary should identify what your business does, covering:

Your industry and target market(s)

Your company’s goals

How you stand out from your competition

Whether your business is a sole proprietorship, partnership or incorporated business

The stage of your business — whether it is a start-up or already in operation

Your team’s experience and credentials

Your projected financial performance

While your Executive Summary has to work hard, it should be clear and to the point, grabbing the reader’s attention and compelling them to read more — a good rule of thumb is to keep this section to one page. While the Executive Summary is structurally the first section of your plan, many owners will write it last, since it’s a summary of everything else you’ve written about.

Important things to consider as a new business owner

Because you’re a new business owner, your bank and potential investors don’t have historical data to review. Your plan therefore must clearly convey your strategy, competencies and the reasons your venture will be successful.

Detailed, well-thought-out financial projections are an important component of your business plan. You’ll want to show how your business could service debt, how you’ll drive revenue and detail both fixed and variable costs.

As you write your plan, focus on your competitive advantage — what separates you from other businesses, your key success factors, your team and areas of opportunity and focus over the next six to 18 months.

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2. The Business Environment

This Business Environment section sets out the history and summary of your business in detail, identifying what you’re selling and how you’re solving a problem or need in the market. If your business is already established, you’ll want to cover its path to this point — where you started and how you got here. If you’re starting a new business, be sure to include any pre-market research or testing you’ve conducted that speaks to the viability of your idea.

You will also want to highlight the industry trends and growth prospects, as well as how your business fits into the current environment. Identifying your competition and how you stand apart from them will also help you determine your position within the industry.

Considerations for seasoned business owners

Your business plan should identify what differentiates your business from others, what’s working (and what’s not) and outline costs, efficiencies, competitors and objectives.

As an important vehicle to help you secure funding, your business plan should include cash flow projections and the objectives for the management team – including expansion opportunities, asset accumulation and projected financing needs.

As you’re writing or revising your plan, identify the teams who support you, your talent pipeline, your succession plan and your plan to remain competitive in an increasingly competitive environment.

3. The Marketing Plan — Where you want to go and how you will get there

Your Marketing Plan explains how you’re going to get your customers to buy your products or services. Part of this exercise involves defining your target market — the group of customers you want to sell to. Your Marketing Plan should also include:

Your products, service and unique selling proposition (USP).  What are the features of your product or service and what makes it unique? How is it different from what your competitors offer?

Your pricing strategy.  Determining the price to charge can seem tricky – you want it to be competitive but still make a reasonable profit. Calculating your costs, estimating the benefits to customers and comparing your offering to others can help you come up with the price

Your sales and delivery strategy.  How will your product or service get to your customers? And how much will it cost? How will you manage your inventory and transaction processing?

Your advertising and promotion strategy.  Here you’ll want to describe how you’re going to deliver your unique selling proposition to your prospective customers. Start by thinking about the message you want to deliver and the advertising and promotional tactics you’ll use (e.g., company website, social media, emails, radio, etc.) to reach your audience most effectively and efficiently. Be sure to prioritize your activities and budget for them accordingly.

4. Operations

The Operations section of your business plan describes what’s physically necessary for your business.

This section contains two main categories:

Your stage of development: This should highlight what you’ve done to date to get your business operational, then an explanation of what still needs to be done.

The production process: This lays out the details of your business’s day-to-day operations, including your hours of operation, and manufacturing details such as facility, equipment and material requirements, inventory, costs and more.

5. Financing and Cash Flow Planning

The Financing and Cash Flow Planning section is your opportunity to determine how strong the financials are for your business. Be realistic about your expenses and projected income so you can properly assess your business’ financial health as early as possible.

If you’re running an existing business, your goal for the Financing and Cash Flow Planning section is to address three main financial areas:

Your cash flow statement: how much money your business has at a particular point in time

Your income statement: your profit and loss for a period of time

Your balance sheet: a financial snapshot of your business

In order to do that you’ll need to calculate your income and your expenses — both your one-time and ongoing operating costs.

If you haven’t started your business yet, you will only be able to populate your expenses, which are important to calculate ahead of time as they will reveal how much start-up financing you may need to get your business up and running.

6. The Team

Great ideas need great teams behind them, so this section should describe your current team as well as anyone you might need to hire for your company. Be sure to address your own background, skills and strengths. Include detailed management team profiles, credentials of your Board of Advisors (if you have one), and the professional partners you have relationships with, such as lawyers, accountants, bankers and any consultants.

An overview of your Human Resources processes, which will address labour, compensation, training and other operational aspects of managing your people, can round out this section.

7. Risks and Conclusions

Every business comes with some risk — so it’s better to be prepared for risks now rather than be surprised by them later. In this section, include all the possible risks your business could face. This may include the economy, your competition, potential supply chain disruptions, losing key team members or security issues. You’ll then want to detail how you plan to address these risks if they occur.

In the Conclusions section, restate your goals and objectives. If the purpose of your business plan is to get financing, you will want to clearly state the amount required and what it will be used for. As with your Executive Summary, your conclusion should be succinct, clear and leave a positive impression on the reader.

Keep in mind, your business plan is a living, breathing document that should be regularly revisited — regardless of whether you are a new owner or run an established business.

You’ll want to review your plan to understand how your goals, priorities, competitive environment and operating model are coming together to deliver on your ambitions. And, as the more business planning and sales forecasting become part of your routine, the more prepared you will be to make strategic decisions to drive the business outcomes you’re striving for. The result is greater confidence and agility to take on new challenges and opportunities as they appear.

Diane Amato is a Toronto-based freelance writer who loves to talk about finances, travel and technology.

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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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