A business plan of an organization or a business is a blueprint for success. It is a written document that clearly defines the goals of a business and outlines the methods for achieving them.
According to “The young entrepreneur’s guide to starting and running a business” book, there are some common elements a good business plan contains. They are:
- Executive Summary
- Business Description
- Market Analysis
- Goals and Objectives
- Service or Product Line
- Sales and Marketing
- Management/Operating Requirements
- Financial Management
Who Needs a Business Plan?
Planning is your guide to success in the business world. You must write a business plan if you are:
- Starting or buying a business
- Financing or refinancing your business
- Deciding if your idea is feasible
- Raising debt or equity capital
Think of a business plan as a roadmap with milestones for the business. It begins as a pre-assessment tool to determine profitability and market share, and then expands as an in-business assessment tool to determine success, obtain financing and determine repayment ability, among other factors.
- EXECUTIVE SUMMARY
Executive Summary is typically a one-page summary of the entire business plan written after the plan is developed. Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want, so clearly state what you’re asking for.
- BUSINESS DESCIPTION
A business description usually begins with a short description of the industry identifying the business name, address, business opportunity, form of the organization, type of product or service and company background.
Also, it discusses an ownership of the business and its legal structure. A business description also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.
- MARKET ANALYSIS
A market analysis forces the entrepreneurs to become familiar with all aspects of the market.
By illustrating an industry market knowledge as well as any research findings and conclusions about market trends, competitors and market size, you can define your target market and position your company in order to garner its share of sales.
By determining the strengths and weaknesses of the competitors within their market, you will be provided with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle
- Market Research: Describe the industry and the outlook of the future
- Target Market – Age, Gender, Income
- Market Need – Why do customers do business with you?
- Competitors – Who are your competitors and what are they good at?
- Competitive Advantage – What is the one thing you are better at than your competitor?
- Business Growth – What are your strategies for your business to grow?
- Challenges – What are the difficulties stopping you from achieving those strategies?
- GOALS AND OBJECTIVES
Here, you state your reasons for starting your business and the goals for the first two to three years.
- SERVICES AND PRODUCTS LINE
Your job is to identify what you want to sell, provide investors with a description of the product’s design and how it benefits your customer and the product lifecycle.
- SALES AND MARKETING
Discuss your marketing/advertising strategies and pricing policies, chart your development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.
- MANAGEMENT/OPERATING REQUIREMENTS
You also need to describe just how the business functions on a continuing basis; for example the equipment, facilities and people necessary to generate your products and services. As well as address how your products and services will be produced and distributed.
The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.
- FINANCIAL MANAGEMENT
Financial data is always at the back of the business plan but this is also one of the most critical parts of your business plan. It should address sources and uses of funds and present the financial future for the business.
There are three main financial statements needed to be included in your business plan. They are the Income Statement, Cash Flow Statement, and Balance Sheet. Even the smallest business gets complicated fast if you aren’t tracking your costs and sales. That’s why entrepreneurs use these three financial statements to steer their business.
Summarize your business goals and objectives and express your commitment to the success of your business. Remember to review it again and make changes to your business plan as it is flexible document that should change as your business grows.
It is true that starting a business on your own is not easy but grabbing the real secrets and knowing the right people can get you started and lead you on the right path to operate, manage, grow your venture and take your business farther.
Mariotti, S., Towle, T. and DeSalvo, D. (1996). The young entrepreneur’s guide to starting and running a business. New York: Times Business
“How To Write A Business Plan”. Entrepreneur, 2018, https://www.entrepreneur.com/article/247575. Accessed 17 July 2018.