Explanation of the Parts of a Business Plan
A business plan is one of the most important aspects of starting a business. Creating your business plan requires you to analyze and research its different aspects and prepare yourself for what lies ahead. A strong business plan tells the reader what your company is, what it does and what it intends to be. It addresses the business' current status as well as its direction and plans for the future.
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Executive Summary
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The executive summary gives a brief explanation of your overall business plan. While it's the first section of the business plan, it should be the last section you write. Your executive summary should include the names and credentials of the business owners, provide a brief introduction of the business' products and services and address your industry and potential competition. If you are seeking a business loan, your executive summary also should include the amount of financing you need, how you will repay the loan and how long the loan will last. The summary should be no longer than two pages and should be signed by the owners of the business.
Business Description
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The business description follows the executive summary. The description should list the name of the business along with its full mailing address and contact information, including email and website information. This is followed by the owner's contact information, which should include your name, business title, home address and phone numbers. Your Social Security number should be included if you are seeking a loan. Provide the legal description of the business (such as LLC or S corporation) and include the type of business, the goals and industry of the business as well as any professional relationships and contact information.
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Managers and Employees
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This section of your business plan should include detailed information on the managers, departments and functions of the business. Include job descriptions of managers and employees and their required qualifications. Your job descriptions also should include salary and benefit information. Explain how you will locate and train these employees. Develop an organizational chart to show the flow of responsibility.
Operations and Location
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The operations and location section addresses the products and services your business provides. Describe the location and costs of your business' location, along with the zoning laws, utilities and taxes that apply to the space. Determine your hours of operation, scheduling requirements and inventory requirements. List any furniture, fixtures and equipment you need to operate your business and how you will obtain those items (buy, lease or rent). Detail any supplier information, costs and materials. If you use vendors, explain how often the vendor will deliver and describe the turnaround. List your supplier and vendor information, address, products and shipping fees.
Financial Statements
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Financial statements are a key part of your business plan. Your financial statements should include a balance sheet and an income statement to show how your business has performed financially over a period of time. It is also a good idea to include a cash statement and personal financial statement in your business plan. Your cash statement shows how your money flows through your business on a daily basis. Your personal financial statement shows your overall financial health and stability; it's generally reviewed by lenders who are considering loans for your business.
Marketing
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Your marketing section must address how you intend to attract customers. You must show what type of customer you will have, how you will promote to them and how you will make them loyal customers. Determine your target market and how you will address the market's needs.
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