What is a business plan?
A business plan is a written document that describes all the relevant internal and external elements and strategies for starting a new business idea or an already existing business. In many ways a business plan is like a roadmap. It guides you and your key stakeholders as you grow your business. It also shows investors, lenders, or potential partners where your business is, currently and where it is headed.
Below we will describe in detail the essential sections of a business plan: what should be included and what shouldn't be. With these in mind, let’s jump right in.
Firstly we have the Introduction:
This should have the:
- Name and address of your business.
- Name(s) and address(s) of your business’s principals.
- Nature of your business.
- Statement of the financing required for your business.
- Statement of the confidentiality of report.
Right next is the Executive Summary:
The executive summary is kind of similar to the abstract of a term paper.
It’s a summary of your entire business plan in 2 pages.
You should note that the executive summary might just be the most important part of your business plan, because most investors may only ask for your executive summary when decid
ing whether or not to work with your business.
Your executive summary should state what your business does, where your business stands currently, your business milestones in three to five years, and why your business will be successful.
Thirdly is your Industry Analysis:
Your industry analysis should have:
Your business future outlook and trend.
Analysis of your competitors.
Your business market segmentation, and
Your industry forecast.
The Description of your Venture comes next:
This should describe:
Your business’s product(s) or Service(s).
The size of your business.
Office equipment and personnel required or currently in use.
The background of Owners and the Board of Directors.
Products and Services:
After you’ve described your business’s venture, it’s time to dive into the product or service that your business provides. In this section you’d describe:
The manufacturing process of your product or service.
The physical plan of your product or service.
Machinery and equipment required or in use.
Names of the suppliers of raw materials required for your product or service.
Marketing plan:
Now that you’ve stated all the crucial details of your product or service, the next step in writing a business plan is to explain how you’ll market and sell your product or service. This should include:
Pricing.
Distribution of product or service.
Business promos.
Product forecast.
Controls.
Organizational plan:
This section states who does what in your business, their background, and what their past experiences bring to the team.
Here’s what you’ll need:
Form of ownership of business.
Identification of business partners or principal shareholders.
Authority of shareholders in the business.
Background of the business’s management team.
Role and responsibilities of team members.
Risk Assessment:
Here you’d evaluate the weakness of your business, enumerate New Technologies and Contingency plans.
Financial Plans:
Although this section comes at the end of your business plan, it could be the most important part of the whole document.
The financial plan of your business plan gives a look into the current state of your finances, and maps out where you’d like to be financially in the future. The following should be included in this section:
Pro forma income segment.
Cash flow projections.
Pro forma Balance sheet.
Break-even analysis.
Sources of funds.
Lastly is the Appendix:
This basically includes your Market research data, Letters, Lease of contracts and The price list from your suppliers.
Whew! That was quite a lengthy read. Have fun writing your Business plan!!!
