What Constitutes a Good Business Plan?

Every company needs a good business plan. A business plan is what lenders such as the U.S. Small Business Administration and banks use when deciding whether or not to lend money to entrepreneurs. Entrepreneurs can also use their plan to gauge their company's success and create new goals for the future.

Executive Summary

Forbes Magazine states that an executive summary is essential to a good business plan. The executive summary should clearly communicate what the company plans to do and how it plans to do it.

Market Analysis

The U.S. Small Business Administration recommends that business plans have a market analysis. This entails having a firm understanding of the customers that will buy the products or services. Once you define your target market, you can begin reaching out to that demographic to obtain business.

Realistic Financial Goals

According to PowerHomeBiz.com, clear and realistic financial goals are essential to a good business plan. The financial projections should give you an idea of where you think the business is going.

Competition

Competitor research is also a major component of good business plans. Every business has a competitor, and it's up to the entrepreneur to recognize, respect, learn, and grow from competition.

Considerations

A good plan will make a favorable impression on potential investors. The Wall Street Journal bluntly states that most business plans fail to make much of an impression on investors. The lack of good impression comes from plans that don't have a solid foundation.

References

• Forbes Magazine
• Wall Street Journal
• U.S. Small Business Administration

Resources

• Forbes Magazine: Elements of Successful Business Plans