Continuing out business plan thread we’ll now dig a little deeper and give you a quick overview of a business plan. We will quickly look at each of the elements and sections which compose a good business plan.
What's in this article:
Cover Pages of a Business Plan
The cover pages of your business plan should include the all-important title page and table of contents. Your title page should be clearly marked with your business/company name as well as the finer details such as your business address, email, fax, phone numbers and contact names. Also list any government registered business names and registration numbers.
Business Plan Executive Summary
The executive summary of your business plan must quickly inform your reader about your business. This short summary will bring interested stakeholders up to speed and in venture capital or investment terms, this description will determine if your business plan will be read and further scrutinized. This summary should also describe the plan’s intentions: whether it is a guide for management for the future of the business or if it is to seek investment finance. If the plan is being used to seek finance then it would be useful for the summary to include details of the amount of money being sought and the related terms.
The executive summary should give the reader a brief overview of the whole business plan. Giving short details from each of the important sections such as details of key goods and services, the target market, how the business is owned and other highlights of the business (main points from SWOT analysis, forecast revenue and barriers to entry).
In your description of your business you should describe your business giving a brief history of the business (including development work and historical revenues and profits), trading names that you will use, the main activities of your business and the business phase you are currently (such as a new start-up, franschise, buy-out or expansion). Also in the description you will include the size and location of your business premises, any special equipment used and also discuss specific business competitive advantages.
Business Industry Description
The business industry description should include researched information about the specific industry your business is in. In this section you shall discuss and document industry outlook, trends of the industry (and also of customers and of the economy), products, size of the market and projected growth of the industry as a whole.
Products and/or Services Provided by Business
In this section you will write about the products and services provided by your business. What problems does your business solutions, services and/or products solve for the customer? What is your unique selling proposition for the products and services you provide? How will they help and benefit your clients? Document the phase your product and/or service is at and also note down any licensing, patents, franchise, copyrights and trademarks that your business may own.
Business Target Market
Your business’ target market will need to be specifically defined in this section. This is an important section and careful research is needed. It is important since it is a proof if your financial forecasts for the business is viable and can be supported by your target market.
You will need to identify your target market’s needs – what does your business do to satisfy your customers’ needs (or wants). Who are your target market? Here you will put a ‘face’ to your market and define your target market using demographics like age, gender, locality of residence, income, education, buying patterns, disposable income and other purchasing habits of your market. You may also need to estimate sales, perhaps you may put out an initial ‘test’ (using eBay or classifieds to launch your business on a small scale for testing) on amount of purchases of your product or service.
Business competitor analysis
In your competitor analysis you will be looking at analysing your competitors’ businesses. Identify a number of your direct and indirect competitors and undertake a SWOT analysis, document their pricing and marketing strategy and their market share. Finally observe your business’ point of difference – how can you differentiate from your competitor’s offerings?
Your business’ marketing plan will document your marketing strategy. In this section you will discuss how your product and/or service is sold to the public or to other businesses (wholesale, retail, internet, direct, sales staff). You will also document your product/service pricing strategy – your price point. Also part of the marketing plan, you will write about product/service benefits to your customer and you overall promotion strategy (advertising, tv, print, sponsorships, competitions, PR).
In this section you will document you business goals and objectives. This will include a simple and concise statement of your general objectives and then specifically to document your revenue and profit targets, target for profit margins and market share. This will keep the business on track and will be the foundation with which your business is run. Every activity of the business will be aimed at accomplishing these goals. Having goals will also avoid disagreements between management and investors.
Key Staff – Management and Directors
In this section, you will document the brief background of your key staff such as management and directors. Write down the history of your key staff and discuss how their experience is of critical importance to the business. Describe their roles and responsibilities within the business and disclose the salaries and other business agreements you have with your key staff – such as shares in your business.
Business legal structure
Note down the legal structure your business will take: is it going to be just you the sole proprietor? or will you incorporate into a company? setup a trust, partnership or public company? Document shares and options on issue in your business as well as any shareholder’s agreements. List your accountant and solicitor details. Document an organisational chart.
Business risk assessment
Now you need to identify the risks to your business in a risk assessment. You will need to document major risk factors for your business such as new competitors or economic risks such as rising interest rates or changing customer needs.
Business financial statements and forecasts
In this business plan section, attach your financial statements and forecasts for your business. You may want to have your accountant create and review your statements and forecasts as well as your business budgets. Include your balance sheet as well as your profit and loss statements. Provide a summary of business projected profit and loss and a cash flow forecast summary. If your business is seeking finance, this section is critical in your success in securing finance. Include a repayment plan and also details on the security or collateral you are willing to provide for the business loan.