A business plan is a roadmap, a program for the near future, which describes the stages of business development and everything that is needed. Investors pay special attention to this document. Therefore, its content largely determines whether a project will receive financing or remain without it.
When developing a business plan, there are several sections to consider: an executive summary, company information, market analysis, organization and management, service or product, marketing and sales, financing, financial projections, and an appendix. Let’s dwell on each section in more detail.
The Components of a Business Plan.
1. Summary
The executive summary is considered to be the most important part of the business plan. It briefly talks about the company and its goals, explaining why the business idea presented will be successful. If you are interested in attracting funding, the executive summary will act as a hook with which to grab the attention of a potential investor.
The summary highlights the benefits of the entire business plan. This section is written last when the main body of the document is already ready.
Contents of the summary
Depending on the stage of business development, the content of this section varies.
For an existing business:
- Mission, main objectives. It is necessary to explain what the business does. The volume of information: several sentences, a paragraph.
- Information about the company. Briefly tell about when the company was founded, indicate the names of the founders and their roles in the business, the number of staff, and the location of the business.
- Key points of growth. Include the company’s growth metrics, financials, and market share. Graphs and charts will be appropriate in this paragraph.
- Products/Services. Briefly describe the products or services the company offers.
- Information about your financial situation. If you are seeking financing, include any information about investors or banks. For instance, if you are intending to apply for an SBA business loan, or this has already been secured, then it makes sense to mention this as part of this section.
- Future plans. Explain how you want your business to be.
- All information in your resume should be succinct. The summary is the first part of the business plan that most people will see, so every word in it should be appropriate.
For a startup, new business:
- The resume section should focus on the experience and decision that made you start the business.
- You need to demonstrate your knowledge of the market. Include information about the needs of the market you are targeting and what solutions you offer to meet them. Describe your plans for the future.
Remember that your resume is the last thing you will write. And you’ll have to start with the “Company Information” section.
Company information
This section includes an outline of the different elements of the business. It helps potential investors quickly understand the objectives of the company and its unique offering in the market.
Contents of the section
- Describe the type of business, listing the market needs the company wants to meet.
- Explain the company’s products and services that meet those needs.
- Name the customers, organizations, or businesses that the company will serve.
- Describe the competitive advantages that will make the business successful (location, highly qualified staff, effective customer service, etc.).
2. Market Analysis
This section of the business plan demonstrates industry and market knowledge, as well as the results of the research conducted.
Contents of the section
- Industry analysis and perspectives. Describes the industry in which the company operates, including information about its volume, growth rate, trends, and features (life cycle stages, project scope, projected growth, etc.). Main consumer groups within the industry are also listed.
- Presence Market Information. The market of presence should be narrowed down to a foreseeable size. This item includes the following market information:
- Features. What are the acute needs of potential customers? Where do they live? What seasonal or consumer trends are affecting business?
- Market size. What are the annual sales volumes in your industry niche? What is the projected market growth?
- Market share. What market share and how many customers does the company expect to win in a particular region? Justify your calculations.
- Pricing and profit goals. Determine your pricing policy, profit level, and the types of discounts you plan to use.
- Competitive Analysis. Determine your market segment and your main product line or service to compete.
Evaluate the following features of the competitive environment:
- market share;
- strengths and weaknesses;
- importance of market presence to competitors;
- barriers to entering the market;
- the best time to enter the market;
- presence of indirect competitors;
- barriers to market development (changes in technology, high costs, lack of qualified personnel);
- legislative restrictions (requirements and possibility to comply with them).
3. Organization and management
This section includes information about the organizational structure of the company, the owners, and their qualifications.
Who does what in the business? Which education do they have? What experience do they have? What are they responsible for? Describe each division and its functions. There are many services, like paperhelp.org reliable writing service, that can help you with making the organization structure of your business plan.
This section of the business plan should include information about what kind of consultants the company employs, what kind of salary, and what kind of benefits package you offer to the staff.
- Organizational structure. In this part of the business plan, you need to show who and what does what in the company and who is responsible for each function.
- The legal structure. In this paragraph, you need to disclose the legal structure of the business along with information about the owners. Does the business have a sole owner, or are there co-owners? Does the company cooperate with anyone?
The following important information should also be included:
- names of owners;
- ownership interests;
- forms of ownership.
One of the key success factors in any fast-moving company is the experience and knowledge of its owner/management. Thus, the business plan should report on the company’s key individuals and their education:
- name;
- position (short description with a list of the main responsibilities);
- responsibilities;
- education;
- unique experience and skills;
- prior employment;
- special skills;
- accomplishments, successes;
- recognition;
- community service;
- length of service with the company;
- compensation.
Information about the board of directors
A major benefit of a board of directors is that it shares expert knowledge. A list of well-known, successful business people is often essential to a company’s credibility.
What information should be included:
- names;
- position on the board of directors;
- degree of affiliation with the company;
- background;
- contributions to the company’s success.
4. Service or product
Describe your service or product, emphasizing the benefits to potential and existing customers. Particularly emphasize why your product is able to fully meet your customers’ needs.
Section content
- Product/Service Description. Include information about the specific benefits of the product or service from a customer perspective. Indicate how the product or service can meet the needs, as well as any advantages it has over competitors at the current stage of development (idea, prototype stage). You can also ask for help with service descriptions to Paper Help writing service.
- Product lifecycle information. This is information about the viability of the product. Any factors that may affect the cycle in the future are important.
- Intellectual property. Information about copyrights or patents is taken into account. This item can indicate what may be considered trade secrets.
5. Marketing and Sales.
This section defines the marketing strategy. Includes four important blocks:
Market penetration strategy.
- Development strategy (recruitment strategies: staff expansion, purchase of another business, franchise development; horizontal integration: expansion strategy, which involves the acquisition of another company of the same line of business; vertical integration: expansion strategy, in which one company takes control of one or more stages of production or distribution of a product).
- Sales strategy (internal sales force, distributors, retailers).
- PR strategy. How are you going to reach customers? A combination of all strategies works best: promotion, advertising, working with the media, and promotional materials (brochures, catalogs, flyers, etc.).
After developing a marketing strategy, you can begin to define a comprehensive sales strategy, which should include two main elements:
A sales department strategy
Do you plan to have a sales department? If so, what resources will you use – internal resources or contractors? How many sales managers do you plan to hire? What recruitment strategies will you use? How are you going to train your sales staff? What incentive system will be used?
Sales activities
As you develop your sales strategy, identify specific actions and outline your prospects. Prioritize your existing contacts, selecting first those who might be interested in buying. Then calculate the number of cold calls you need to make in a given period of time. Determine the average number of calls per transaction, the average transaction amount, and the average salesperson’s income.
6. Funding
If you are looking for financing for your business, put this section in your business plan to outline your requirements.
The content of the section is.
- Current funding requirements.
- Any funding requirements that may arise in the next five years.
- How do you intend to use the funding you raise?
When outlining your business tradeline requirements, state the amounts you need now and in the future.
7. Financial projections.
This section is just as important to investors. Therefore, it is important to pay attention to it when writing your business plan.
Contents of the section
Financials for previous years. If you have an existing business, include in your business plan the company’s performance data for the previous three to five years. These are profit and loss statements, balance sheets, and cash flow statements.
Financial indicators for the future. Investors are interested in the company’s plans for the coming years. The information for each year should include projected profit and loss statements. Make sure the projections match your funding requests.
Include a brief analysis of financial information in your business plan. It’s not unreasonable to visualize the numbers with graphs. For those venturing into digital printing, a detailed digital printing business plan is essential to outline the scope of services, market analysis, and strategic approach to capitalizing on the growing demand for digital printing solutions.
Accounting for all the company’s finances in one service: show where the money goes and calculate the plan-fact day to day.
8. Appendix
The appendix is prepared as needed. A business plan is a communication tool; it is prepared for a large number of people.
What information is usually included in the appendix:
- Credit history;
- Summary of key management personnel;
- Photos of the product;
- Letters of recommendation;
- Market research;
- Media mentions, expert publications;
- Licenses, permits or patents;
- Legal documents;
- Copies of lease agreements;
- Contracts;
- A list of business consultants.
Conclusion
Even if you never intend to pitch investors, a business plan may help you establish clear, intentional next steps for your company—and it can help you uncover gaps in your strategy before they become problems. Consider using business plan softwares to streamline the process and ensure you cover all essential aspects of your business.
You now have a thorough guide and the information you need to assist you start working on the next phase of your own business, whether you’ve prepared a business plan for a new online business idea, a retail storefront, increasing your established firm, or purchasing an existing business.