Parts of a Business Plan
Parts of a Business Plan: Business plans can be complicated documents. See what types of information you should include in your business plan.
Parts of a Business Plan
Business plans typically follow a traditional format or structure. They
may also include charts and graphs along with a detailed set of
financial statements. While there is room for creativity, most lenders
expect to see at least the following components, roughly in this order:
Executive Summary: Since this
summary highlights the key points of your plan, it’s usually best to
write it last. Or, conversely, if you feel you need to “force” yourself
to boil your business down into a short statement, you may want to
write it first, but be open to revising the summary later. This section
is where you answer the general questions about your business concept,
team, needs filled, market advantages, financial viability, and overall
likelihood of success and profitability.
Business Description: This
section breaks your business down to the basic facts and everyday
details of your business. What type of company is it? Retail? If so,
what are you selling? And so on. Include the company’s formal name as
well as any DBA’s (fictitious business names), and subsidiaries, as
well as URLs (domain names) you have secured. What is the
company’s legal status? (Partnership, LLC, etc.) If this is a business
plan for an existing business, give an overview of its existence and
accomplishments to this point. You can also list prior funding and new
monies sought here.
Market Analysis: In order to
effectively sell products or serve customers, you need to know your
target audience. This section identifies your customers, or how a
diverse population of customers breaks down geographically or in other
ways. For example: college students, single moms, urban professionals,
dieters. Lenders, partners, and other interested parties will want
proof that these populations exist in sufficient numbers and that you
have what they want. This is also the place to describe market trends.
Marketing Plan: Your sales or
marketing plan doesn’t have to be incredibly detailed, but you should
have at least an outline and relatively clear vision of how you will
reach your target market and/or sell your product or services. Be sure
that somewhere in your business plan documents you include a realistic
budget for advertising, promotion, social media, etc. (Summarize your
plan for the Web/e-commerce.) Besides spelling out a plan to promote
your business, determine how you wish to be positioned in the
marketplace re: corporate values, reputation, slogan, etc.
Operations and Management Strategy:
(If you will have a sizable management team, you may want to break that
out into a separate section.) The operations plan lays out how your
business will function day-to-day, and especially how it will make you
compete in the marketplace. Address facilities, equipment, quality
control, inventory, distribution, customer service and so on. List all
founders. If this is for an existing business, be sure to explain any
major changes in management composition.
Competitive Analysis: Along
with knowing your target market, it’s important to know who else is
targeting your market. The competitive analysis takes into account
other businesses that are competing, or will compete, with yours, and
their current share of the market. Look not only for businesses with a
similar product or service, but also for those serving a similar
audience. This information will prove invaluable not only as you submit
your business plan, but well into the future. Demonstrate why customers
will choose you.
Development Plan: Set out
milestones you expect your business to reach within a set number of
years, in multi-year increments. Be sure to include concrete dollar
figures, sales numbers, employee counts, market share, building plans,
and so on. Also address where you might ultimately take the company:
Will you go public? Sell? Merge? Franchise? Do you have an exit
strategy?
Financial Statements: Any savvy
investor desires a Return On Investment (ROI) and will want to see a
professional set of financials. Plus, they’re something you will need
for your own tax and reference purposes anyway. In some cases, this is
also where you will include a statement of how much money you are
seeking, from which sources. Typically, the financial statements
include: Assets, Liabilities, Net Worth, Annual Income, and Profit and
Loss Forecast. BusinessPlanTemplate.net has many of these forms
available for instant download.
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