Elements of a Successful Business Plan
A successful business plan can help secure investment capital for your business and provide a blueprint for your venture. It should include the following elements: an executive summary, market analysis, company description, organization/structure, service/product, marketing/sales, financials, funding plan and an appendix.
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Executive Summary
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The executive summary is key in a successful business plan, because if you're looking to appeal to a large investor, the investor probably doesn't have much time to examine your proposal in detail. The executive summary, which is typically two pages, is a way for you to make your pitch quickly and get an investor interested enough to want to read the rest of your plan.
The executive summary should include a mission statement, a description of the business you plan to set up (company structure, location, founders, employees, time line of establishment and growth), a description of your products or services and financial considerations.
Market Analysis
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It is crucial that you thoroughly research your target market before writing your business plan. Most plans that fail do so because they lack enough market research. Ideally, you want to choose a small, very specific market and back up your pitch with evidence that there is a substantial need for your service or product.
For example, Nike originally targeted elite long-distance runners--a very small market that was in need of shoes that would perform well. Once Nike proved it could make good running shoes, it was able to build a solid reputation, which enabled them to grow. Make sure you not only know who you're targeting, but that you also know how many, so you can base potential sales figures on that number. -
Company Description
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A successful business plan should include a section that describes the nature of your business in detail. It should answer the following questions: How large will it be? Who are its founders? Where will it be located? How many employees do you plan to hire? How will the company and the management staff be structured? What is your mission statement? How will you fulfill your customers' needs? How will you deliver/distribute your product or service? What are the qualifications of your employees? How will your location play into the service/product you offer?
Service/Product and Marketing/Sales
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For a business plan to be successful, you must convince an investor that there is a substantial need for the product or service you plan to offer. You must do the research regarding your target market and show both numerically and through testimonials that there is a hole in the market and that your business will be the best candidate to fill this hole.
After offering evidence of the niche market you intend to fill, you should propose a plan to market your product or service. Again, you should provide numbers regarding your target market and a plan for how you are going to advertise and reach out to it. You should have a strategy for how to reach and entice your target market conceptually (via advertising), and you should have a plan for how to sell your product on the ground (through salespeople and vendors).
Financials
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You must include details about your business's financials. This entails details on how much capital you have, how much you will need, and how much funding you are seeking to start your business. You should lay out a plan for how you will go about obtaining funding: Which investors will you target? How will you present your case to them? Why do you think they should be willing to invest in your business?
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You should include an appendix if there are charts and graphs you'd like to include that don't fit into any of the other sections.
When writing your plan, be as detailed as possible. Potential investors want to see solid research to support your claims. Also, as much as you want to put your business idea in the best light, you should not gloss over potential problems. Investors want to see that you are realistic in your vision and expectations, which means you should address any negatives and present potential solutions to problems you think could arise.
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