Key Components of a Solid Business Plan

While not everyone develops a business plan prior to launching their endeavor, just about everyone should. Business plans serve a multitude of purposes. Not to mention, for those trying to attract attention by way of investors, a business plan is almost always going to be a must. So what goes into the ideal business plan? How do you create a document that will get those investors’ attention?

First off, what many entrepreneurs don’t necessarily understand is that a business plan in many ways is a story—a story about them and their company. When all of the information is compiled, when the facts and details are read together in business plan format, the resulting document should tell them a narrative about your journey, about how you got there and where you’re headed. If you keep this in mind as you create your business plan, you will be more successful.

In this article we take a look at a few of the key components of business plan writing. So whether you’re looking to develop a plan for investors, for lenders or as a guide for your own personal reference, the “ingredients” listed below are generally must-includes.

Getting Started with Your Business Plan

You may be confronting a blank screen, scratching your head and getting rather frustrated as you sit down to begin your business plan. You are not alone—many an entrepreneur has been in this position. The key is to take some time to envision the layout of the overall business plan, determine which sections you will include, and then do your homework in regard to those critical components of the plan.

Not every business plan is going to look like the next one. In other words, some may contain different information than others. And that this is perfectly fine, as no two businesses are alike. However, there are some essentials that you do want to make sure are a part of the final plan.

1) Executive Summary

This section is standard to just about all business plans. Here is where you provide readers of your plan with an overall snapshot of your business and its value. The Executive Summary should be no more than two pages and should contain such information as a brief description of your company, a summary of objectives, a quick overview of the market, and a picture of the funding needs of the company, among other elements.

The key to a great Executive Summary is that by and large it needs to define what problem you are solving that currently exists. So what value is your business bringing to people and how consequently, is it delivering this value in such as way as to address certain pain points?

2) Products/Services

This is pretty straightforward as here is where you go into detail regarding the products and/or services that your business intends to sell. This is not a time to hold anything back either. Remember, one of the key purposes of a business plan is often to convince investors and/or lenders that your business is worth taking a risk on. One of the ways in which you do this is to convince them of how necessary your product is.

That said, you do not want to get too technical and incorporate a ton of industry words that are above the average person’s head. Make sure your business plan in this regard is detailed but easily accessible and comprehensible.

3) Market Report

Yet another crucial component of any business plan, is a section detailing relevant market opportunities for your young company. This is basically going to entail a very through market evaluation. Some of the questions that this section of your business plan might address include: the audience size and scope, the overall demand for your product, the price that you’d expect people to pay, and the future prospects you see for the industry as a whole.

The more information you can present regarding what your market conditions are, the more confident others who read your plan will be in your ability to actually succeed within that market. One of the keys to this section is going to be customer analysis. In other words, who is your ideal customer? What do they look like, where do they live, what income level do they fall in, what is their age range. Be comprehensive as you answer these questions.

4) Marketing Initiatives

Once you clearly define your market and your target audience, now you also need to talk about how you are going to most effectively reach them and consequently advertise your business to them. This is definitely a key component of any business plan. You want to detail your anticipated marketing/advertising budget and then also specify how you intend to allocate that budget.

For example, will your marketing strategy be largely digital? Will you use signage and more traditional marketing materials? And then of course, how will you measure the efficacy of your marketing efforts?

5) Competitor Analysis

Hand in hand with a marketing strategy overview is a section detailing your competition. You want to first identify your main competitors and then of course speak to how you intend to best them when it comes to winning over customers. This is why careful analysis is needed. Look at their weaknesses, their strong points; see how they approach their marketing. Any and all information you can gather in regard to the competition is essential.

You might even go so far as to do some “undercover” work and visit their website and/or location—or have a friend do so. See what you can find out for instance about their approach to customer service.

6) Business Operations

This of course represents the core of your business plan in many ways. This section is where you spell out how your business will run—what are the nuts and bolts when it comes to your company’s operations. So you might include the type of facility and equipment you need; you might also outline your organizational structure. In this section be sure to examine also the overall scalability of your anticipated operations.

First Union Is Here For You!

This list is by no means extensive—business plans can vary quite widely from one company to the next. The key is to get the core components in there and carefully evaluate your needs/expectations as far as each section is concerned. First Union can help; even newer businesses get the cash they need to see their companies thrive and grow. Call today! 

Published in Business Strategy, Small Business

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