Structure of a Business Plan
The need for a business plan applies to start-ups and companies in existence for years. It is used to communicate, manage and grow your business. Often, it is proposed to investors when a company needs start-up capital or is looking to expand. The business outlines everything a reader would need to know about how the company operates, the leadership, financial and marketing strategy and where the company hopes to be in five years. Several sections are included and outlined.
Other People Are Reading
-
Executive Summary
-
The executive summary gives a broad overview of the business plan, the history and future goals of the company. This is the most important section and should grab the reader's attention. Things that need to be included in the executive summary are the mission statement, the founders and their roles in the company, the location of the business, the products or services the company offers, investor information, financial growth summary, marketing highlights and future plans.
Market Analysis
-
This section of the business plan includes a thorough industry and market analysis. It should also analyze the size, growth rate, trends and characteristics of the industry. Detailed demographic descriptions are also included in this section. Analysis should define the target market and include characteristics, geographic location, seasonal trends and size of this market. A competitive analysis is also included which assesses the competition's product line, their strengths and weaknesses, and any barriers to entering the market.
-
Organization & Management
-
This section outlines the company's organizational structure and ownership and key leaders of the business. Legal structure, names of the owners, percentage of ownership, forms of ownership and overall organizational structure are included. Management profiles should also be included that provide background information on the key people running the company such as education, experience and skills, prior employment, track records, community involvement and industry recognition. If a board of directors is involved with the company, their positions, background and company involvement are also included in this section.
Marketing & Sales Strategies
-
This section includes the market penetration strategy and overall growth strategy. Detailed communication analysis of how to best reach target market through promotions, advertising, public relations and a sales strategy are outlined. Included is also a description of the distribution channels and the process for sales activities.
Service or Product Line
-
This section outlines what the company is selling and a detailed description of the product or service. This would include benefits of the product or service, its ability to meet customers' needs, distribution and pricing strategy, advantages over the competition and the current development stage. Copyright, patent or trade secret information is also outlined in this section, in addition to describing any existing legal agreements for the company.
Financials
-
If there is any historical data related to the finances of the company, it is included here. Items such as income statements, balance sheets and cash flow statements will provide the information investors and creditors are interested in. This section also includes a prospective financial analysis for five years out. Forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets should be proposed for each future year of the company. Graphs and trend analysis charts are often used in this section.
Appendix
-
The appendix of the business plan includes items such as credit history, resumes, product pictures, letters of reference, market study details, magazine or book references, licenses, permits or patents, legal documents, copies of leases, building permits, contracts and lists of business consultants. This information is used on an as-needed basis.
-
References
Resources
- Photo Credit business plan 50409 image by pablo from Fotolia.com
