A business plan can seem daunting to entrepreneurs when they are first starting out, and it is something that can often get overlooked. Starting a new business is time-consuming enough, and it can seem like there just aren’t enough hours in the day to squeeze in a business plan as well. But as any successful business owner will tell you, a business plan will be crucial to your company’s success, no matter what kind of business you plan on starting.
In fact, depending on what your product or service is, writing a business plan might not take as long as you think. There are many components to a business plan, and it can be customized to work with all different kinds of companies. But regardless, this document will act as a roadmap for your future actions and can also be important if you are looking to secure funding. Let’s take a look at some of the most common parts of a business plan.
Executive Summary
The executive summary is usually the first component of your business plan that will act as a guide for the rest of your document. Consider it an outline that highlights all of the important things that will be covered in the document. It should provide your team and anyone who reads it an overarching summary of what your business is, why you started it, and how you’re going to make it work.
Included in this will be your organization’s values and mission statement, as well as your products and services. Your executive summary should act as a quick elevator speech that will be able to explain everything in just a couple of minutes.
Business Description
This is where you’ll describe exactly what your business is all about and how you plan to succeed in the marketplace. It will be a detailed description of what your company does, what its goals are, what products and services you sell, who your target audience is, as well as who your competition is.
You should provide analyzation of how the current market stands and identify any gaps or trends that are occurring that would make this an enviable opportunity. You want to talk about why your business is unique and why it will be able to thrive in the current market.
Market Analysis and Strategy
Here you’ll want to elaborate on your business description and go into detail on who your target audience is and how you plan on reaching them. You’ll want to analyze things like:
- Customer demographics
- Location of audience
- The problem you are solving for clients
- Behaviors of your customers
- Needs of your customers
The end goal is to know your audience better than yourself so that you have a clear idea of how to reach them and serve them. To learn more about goal setting, you can check out this article source.
Sales and Marketing Plan
In this section, you are going to want to go into specifics on how you plan on reaching your target audience. You’ll want to have thorough planning on:
- Launch plan
- Promotional strategies
- Price points
- Strategies and tactics for sales
- Define your unique selling proposition (USP)
- Logistic of getting your products or services to market
You’ll also want to start thinking about a long-term growth strategy in this section, so you aren’t caught off guard when business starts to pick up.
Competitive Analysis
A competitive analysis will be a great guide to let you know if your business is feasible or not. This is where you compare your business to others in the marketplace and analyze how you fit in with your competitors.
You’ll often include a SWOT analysis in this section where you can identify strengths, weaknesses, opportunities, and threats. You’re going to want to get crystal clear in this section on how you plan to separate your company from the pack. You’ll also want to identify any obstacles that might get in the way of growth when you enter the field.
Organization Description
This is where you’ll outline an organizational chart and identify the different roles that take place within your company. You should provide a brief description of the responsibilities of the key players in your business and what they will need to do in order for your business to be successful.
Products and Services
In this section, you’ll go into detail on the money maker of your business – your products and or services. You’ll want to expand on what you’ve already mentioned and get more granular about how they are produced, how much they will cost, how long they take to manufacture, and any other pertinent details that you can think of.
Plan of Operation
Your operating plan should describe exactly how your business is going to run. Where will it be located? How many employees are there to start? Who will be doing what? As you’ve already mentioned some of these details previously in the plan, this is where you get succinct and provide a clear summary so that everyone’s on the same page.
Financial Documents
Here is where you present the evidence of why your business is going to be successful. You’ve done your homework, crunched the numbers, and have the data to back up your claim. This will be an especially important part of the plan if you are looking for funding from outside investors. Leave no stone unturned in this section and take into account any unforeseen expenses that may arise.
You May Have More or Fewer Components of a Business Plan
As mentioned, the components of a business plan can vary depending on the size and type of company you are starting. Your plan can be as simple or as complicated as you want it to be, but it should still provide a clear guide on where you want your business to go and how you’re going to get there.
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