Essential Components Of Business Plans
Business plans have a well defined form that shouldn’t be changed by anyone. Business
plans include several elements that shouldn’t be modified, because otherwise they
won’t have the expected results.
When you want to write your business plan remember to stick to its original form.
Those that will read it will expect to see a certain format. In the case that they
won’t notice the elemental components then they won’t take your plan into consideration
even if you’ve presented a great idea.
The business plans have five fundamental components: the executive summary section,
the business section, the market analysis section, the financing section, and the
The executive summary section is the first section in all business plans. Those
business plans with a good executive summary will have greater chances to be successful.
The audience will be convinced to read the whole business plan if you’ll come with
an excellent executive summary. For successful business plans the executive summary
is very important.
All business plans should include in this section the nature of your new venture
and the need you want to satisfy. Also, describe your potential market and why is
your product or service needed. Don’t forget to describe how is your business organized,
your management team, and include a briefly summary of your marketing plan. Also,
remember that the audience wants to see the amount of capital that you need, your
sales expectations and how are you expecting to pay back the debt.
If the audience is pleased by what you have written till now then they will continue
reading the whole plan. But if you couldn’t capture their attention then they will
reject your plan no matter how good is your idea.
The business section of business plans should include the legal name, physical address
and full description of the nature of the business. Firstly, keep in mind that business
plans should contain a general terminology. Those that read the plan don’t necessarily
have the same level of knowledge like those that write the plan. Also, you should
try to explain why your idea is better than that of your competitors.
The market analysis section helps you understand better the market on which you
want to enter. This section is more like a marketing plan description. All business
plans should include in the market analysis section the estimated demand of the
product or service, the market target, the industry’s trends, the pricing plan that
you will follow and the description of the company’s policies.
In the financing section you should prove to the audience that you really want to
business work. Explain exactly how much money from the personal funds
do you have and their sources. Also, mention the amount that you need to borrow
and how are you going to repay it. Any relevant financial worksheets like annual
income projections, a break-even worksheet, predictable cash flow statements and
a balance sheet are important and should be included in all business plans.
Good business plans contain in the management section information about the organizational
structure of the business and about the management team. Also, it contains resumes
and biographies of key members of the management team.
There are some persons that might consider that business plans require a lot of
time and effort. But, they don’t realize that the time spent writing the plan is
well spent. Also, there is a business plan building software that helps people make
their business plans. This software is easy to use and at an affordable price and
will help you obtain some great business plans.