Starting a business may not be easy. Many important activities go into it. One of these is preparing a detailed business plan. But, what are the elements of a good business plan? After all, it can be very much like your road map to success.
What is a business plan?
A business plan is generally a document describing the detailed definition of the objectives of a business and how to achieve them. Basically, it describes the roadmap for different aspects of the business including financial, marketing, and operational areas.
Elements of a good business plan
Meanwhile, your typical business plan should include the following sections.
Executive Summary
First, you have to concisely describe the activities of your business and its intended market needs. Remember, you want to keep your readers reading. So, make it brief but with enough relevant details.
Usually, the executive summary should include the following:
- The business name and location
- Products and services your business offers
- The mission and vision statements
- An overview of the specific objectives of the business plan.
Business Description
Second, give a high-level overview. Describe business goals, objectives, achievements so far, and problem statements. In addition, include who the ideal customers should be and other success factors.
Surely, you have to include the Unique Selling Points (USP) and value propositions of the business. Furthermore, add your business profile. Specifically, a business profile should contain information such as location, legal structure, product, and services overview. Other relevant information for the profile includes targeted customers, suppliers, plans for profitability, financial, and marketing information.
Market Analysis
Third, you have to add a summary of deep market research. In other words, add an analysis of your industry, target customers, marketing data, and competitors. Remember to include your competitive edge (SWOT Analysis).
Organization and Management
In addition, your reader would want to know your business structure and processes. So, describe the legal structure – sole proprietorship, partnership, corporation, or LLC. Certainly, you need to include an organizational chart with an overview of departments and their heads.
Here, it is not out of place to add profiles of your executive team members, advisors, and consultants.
Services or Products
Again, your reader may be interested in the detailed information about your business offerings. So, describe your products and services and their benefits to your customers. Here, you can use terms like costs, lifecycle data, net revenue, profit margin, research and development, and product differentiation.
Marketing Strategy
Meanwhile, one of the critical elements of a good business plan is the marketing strategy. Highlight your process of reaching the target market, acquiring leads, and converting them. Similarly, describe how you will handle product promotion, budgeting, monitoring, and optimization.
Funding Request
Sometimes, your objective for the business plan includes a request for funding. Consequently, you may specify in detail the amount of money you need. Remember to include the purpose, plans for the money, and timelines for loan repayments.
Financial Plan
Surely, investors will be interested in knowing how your business will generate revenue and its financial projections. More so, it gives an indication of business viability. As such, make sure to add supporting documents to financial forecasts such as cash flow statements, projected income statements, balance sheets, and capital expenditure budgets.
Appendix
Finally, it makes sense to include an appendix. Here, you add supporting documents for other sections. For instance, you could include legal documents, customer lists, permits, and so on.
Rounding it up
Granted, all businesses are not the same. Thus, business plans may look different. Still, there are key elements of a good business plan you cannot ignore. It can provide a clear understanding of your business structure and goals to investors, lenders, and partners.
