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10 Elements That You Should Always Have In Your Business Plan

 

A business plan identifies the goals of a business and outlines the plans a business owner has to execute those goals. A well thought out one, indeed, is critical to any new venture’s success. A business plan tells you where you want to go and how you’re planning to get there.

Your company’s roadmap for the next four to five years should include the following elements:

1. Operating Plan

An operating plan is an outline of all the resources you need to launch your business. It will include guidelines and management philosophies. 

Facilities and capital are some of the specific elements that an operating plan has to address. All costs and expenses should also be tackled here for you to determine plans for funding the business. When it comes to expenses, it’s best to divide them into categories. It’s a way of sorting and grouping your expenses, so you have a clear picture of everything. There are available resources over the Internet where you can find business expense categories explained in a thorough manner if you want to learn more about it.

Include all necessary matters, like salaries, computers, equipment, and office space, to judge and plan the operations of your business accurately. Don’t forget that you also need to describe how you would be adjusting your plan as your business grows.

2. Request For Funding

This section is crucial if you need funding. Talk here about how you’ll use the startup capital that you’re trying to raise and how much money you need. It’s also important to disclose any extra cash you’ll be needing in a year or two for you to complete a particular project.

3. Financial Projections

New companies and startups need to provide their financial outlook in the next five years. Your financial projections should include balance sheets, capital expenditure budgets, and forecasted income statements. The same pieces of information from the last few years should also be provided if yours is already an established business. 

The section for financial projections is supplementary for your request for funding. It will help you convince a prospective lender that your business will succeed financially. If you’re offering any collateral, make sure to list them here, too.

4. Offering

This section is essential even if you’re part of a highly-niche industry. It should describe what your business sells or offers. What consumer needs are your products or services providing?  Be sure to explain everything here (your offerings and how these could benefit customers).

Your products’ or services’ lifecycle should also be tackled in this section. Explain patient filings, intellectual property, or copyrights. 

5. Market Analysis

This is where you’ll be identifying and providing details about the target market of your business. Information about your target market that you have to describe are purchasing trends, needs, demographics, growth rates (both historical and forecasted), and even size. This section is where you’ll dive deep into your industry and determine what specific share of the market you can capture.

6. Competitive Analysis

You’ll need to show here that you know your competition’s strengths and weaknesses. Remember that a good business plan presents a clear comparison of indirect and direct competitors and your business. If there are issues that you think could prevent you from delving into the market, such as high upfront costs, for instance, it’s best to mention them here. The competitive analysis section will show that you know how exactly your business will stack up against companies that offer the same products or services as you do. All information you can get here can be useful for your market analysis section.

7. Sales And Marketing Strategy

Sales forecast, an overview of promotion and distribution infrastructure, a detailed pricing and position strategy, a description of customer profile, and the projected market share in your overall market should all be tackled here. If you have plans to use sales and marketing software, it should also be mentioned here. The section for sales and marketing strategy requires a deep understanding of not only the position that your business has within its niche and market space, but also your competition analysis.

8. Business Description

When writing the section for business description, you have to answer the following questions:

  • What’s the driving force behind your business?
  • Where is your company located?
  • What available market opportunities your business can take advantage of?
  • What legal structure does your company follow?
  • What’s your business model?

Provide a background on the origin of your company here. You’ll also have to provide an in-depth description of what your business does. You want to talk about the projected growth of your company, too. This section should tell the story of your company for your backers to know the ins and outs of the business.

9. Planning For People

In writing this section of your business plan, you have to show that you’re considering options other than hiring full-time employees. As you probably already know, a business that’s taking on a new market, service, or product will more likely experience a short-term requirement for a lot of help. It’s also true for startup businesses. The direction and performance you expect from your business will largely dictate how you fill such a short-term need for help.

This section can assist in organizing the responsibilities and roles of all the different people involved in your company. A checklist of the tasks that an individual or a group of individuals has to perform may be useful, even just for your own benefit.

10. Executive Summary

Although it’s always the first element present in a business plan, an executive summary gets written last. Think of it as a synopsis of your company. Your growth plans for the business, highlights of your growth (if there’s any) so far, basics about who founded your company and when it happened, as well as the mission statement of your business, should all be included in this one-page section of your business plan.

Conclusion

A business plan helps you anticipate any problems in the future and set realistic goals or expectations. Yes, it takes hard work and a lot of time to develop one, but it certainly will pay for itself going forward. It’s always better to invest in a business plan at the outset for you to discover if your startup has a chance to succeed than starting without any planning involved and end up losing everything. Even if your business plan ultimately proves that your idea can’t succeed, you’ll still learn so much from it and start strong again.