The 10 Elements You Need for a Perfect Business Plan
January 28, 2020 | Joyce Ibrahim
Whether you’re planning to open the best coffee shop on the block, or you want to sell eco-friendly detergent, it’s important to explain why your business is absolutely necessary for the market, and how it can be different from its competitors.
And that’s exactly why you need a business plan. With a well written business plan, you can give investors and potential lenders the necessary insight into your company’s structure and its objectives.
Here are 10 elements every business plan needs.
1. Executive Summary
Your executive summary should appear first in your business plan. A good idea would be to write your executive summary last, after having went through all other components of your plan. It should cover what you expect your business to accomplish.
A good executive summary is compelling. It reveals the company’s mission statement, along with a short description of its products and services. It might also be a good idea to briefly explain why you’re starting your company and include details about your experience in the industry you’re entering.
2. Company Description
The next section to tackle in your business plan would be the company description. It’s best to include key information about your business, your goals and the customers you plan to serve.
Your company description should also discuss how your business can differentiate itself from competitors in your industry, and how your products and services help your target audience, and why they’re necessary.
3. Market Analysis
Ideally, your market analysis will prove that you know everything there is to know about the market you’re planning to enter. In that section, you’ll need to showcase data and statistics to talk about where the market has been, where it’s expected to go and how your company will fit into it. In addition, you’ll have to provide details about the consumers you’ll be marketing to, such as their income levels, ages, interests, occupations, and any insight that will allow your product and service to reach them better.
4. Competitive Analysis
A clear comparison of your business to your direct and indirect competitors is key for a good business plan. You’ll need to show that you know their strengths and weaknesses and you know how your business will compare. If there are any issues that could prevent you from jumping into the market, like high upfront costs, this is the section where you would need to mention them.
5. Description of Management and Organization
Following your market analysis, your business plan should showcase how your organization will be structured. Introduce the managing team, summarize their skills and primary responsibilities. If you want to, you can create a diagram that maps out your chain of command.
It’s also important to indicate the legal status of your business, whether it’s a partnership, a sole proprietorship or a business with a different ownership structure. If you have a board of directors, you’ll need to introduce the members.
6. Breakdown of Your Products and Services
If you didn’t incorporate enough facts about your products and services into your company description (since that section is meant to be an overview), it might be a good idea to include extra information about them in a separate section. Whoever’s reading this portion of your business plan should know exactly what you’re planning to create and sell, how long your products are supposed to last and how they’ll meet an existing need.
It’s a good idea to mention your suppliers, too. If you know how much it’ll cost to make your products and how much money you’re hoping to bring in, those are great details to add. You’ll need to list anything related to patents and copyright concerns as well.
7. Marketing Plan
In your business plan, it’s important to describe how you intend to get your products and services in front of potential clients. That’s what marketing is all about. As you pinpoint the steps you’re going to take to promote your products, you’ll need to mention the budget you’ll need to implement your strategies.
8. Sales Strategy
How will you sell the products you’re building? That’s the most important question you’ll answer when you discuss your sales strategy. It’s best to be as specific as possible. You can indicate how many sales representatives you plan on hiring and how you’ll go about finding them and bringing them on board. You can also include sales targets.
9. Request for Funding
If you need funding, you can devote an entire section to talking about the amount of money you need and how you plan to use the funds you’re raising. If you’ll need extra cash in a year or two to complete a certain project, that’s something that’s important to disclose.
10. Financial Projections
In the final section of your business plan, you’ll reveal the financial goals and expectations that you’ve set based on market research. You’ll report your anticipated revenue for the first 12 months and your annual projected earnings for the second, third, fourth and fifth years of business.
Need help perfecting your business plan? Get in touch with Brakket Consult!