Written business plans have advantages over good intentions – putting your business idea on paper helps demonstrate a well thought out business proposition, to prospective investors.
What are the key elements of a business plan?
From market analysis to your company financials, here are the essential components of a business plan;
Executive Summary:
Your executive summary is a snapshot of your business plan as a whole. It contains the purpose of the plan and brief highlights of all essential elements of the plan.
2. Goals and Objectives:
Where will your business be in three to five years from now? What will it have achieved? What are the main growth targets for sales revenue and profit?
3. Market Analysis:
Before launching your business, it is essential for you to research your business industry, market, and competitors. Provide a description of the industry in which your business will operate in, current status, trends and future prospects. Include an assessment of the competition against your strengths and weaknesses.
4. Company Description:
Your company description provides information on what you do, what differentiates your business from others, and the markets your business serves.
5. Organization & Management:
Every business is structured differently. Provide details of the management structure for your business, the key people involved, their roles, responsibilities, and background skills. Also include any key advisers to your business.
6. Go-to-market (GTM):
How do you plan to market your business? What is your sales strategy? Your marketing strategy should describe the brand image that you are seeking to project for your business, and how your product will be distributed (A detailed explosion of this section becomes a Growth Plan)
7. Services and/or Products:
What do you sell? How does it benefit your customers? What is the product life cycle?
8. Funding Request:
If you are seeking funding for your business, you should include the specific request in your plan. Consider including high level summaries of projected rate of return on investment and any assumptions underlying the projections.
9. Financial Projections:
Provide financial projections to back up your request for funding. Include details such as business viability and timeline to profitability, break-even analysis, equity and borrowings, and repayment plans.
10. Appendices:
An appendix is where you include information such as profiles, detailed financials, market analysis and research results, letters of reference, etc.
A Business Plan is not a Growth Plan. In summary, a good business plan provides:
- description of the business idea
- a description of the market in which it plans to operate
- the aims of the business
- the financial projections
- a plan to achieve the objectives
