7 Necessary Components For Your New Business Plan
by Lyndsey Freeman
If you’re starting a new business, do not take one more sip of coffee, one more step and spend one penny before you write your business plan.
Here are 7 things you need to include:
1. Executive Summary.
The executive summary is the first and most important part of your business plan. If the project is not clear or compelling enough in this section, often your investors won’t waste their time reading the rest, so you’ve got to get this part right. The executive summary highlights the strengths of your plan and explains how your company will provide a unique to its clients. Include the following in the executive summary:
- The mission statement: a brief description of your business and its end goalsCompany info: Describe the founders and their backgrounds.
- Growth projections: describe and quantify the financial possibilities for the company
- Products/services: describe what you will sell or what service you will provide
- Financial info: Especially if you are seeking financing, describe already existing investors and your own capital.
2. Company Description.
The executive summary gives a brief outline of what your business is designed to do and how it will do it. If you have your potential investor’s attention, they will want to read more in-depth information on the company. That is where the company description comes in. Here you can go into more detail on the specific customers you foresee, the competitive advantages of your company and how your company fills the marketplace’s needs that are not getting met.
3. Market Analysis.
The Market Analysis describes the way things work in your given industry. If you’re in the business of selling coffee, you’ll discuss the needs of coffee drinkers that you are targeting. You’ll explain this group in a more manageable way. You’re not just marketing to coffee drinkers, for example, you’re marketing to coffee drinkers who work in the downtown area and don’t have time to grab coffee before getting to work. Describe the size of your market. For example, maybe there are 200 workers in the building on the right of your shop and 100 on the left. That is narrowing down your market. You’ll also discuss pricing structure here and the ways in which you’ll compete with those in the same business.
4. Organization and Management.
In this section, you’ll describe the structure of your company. How many owners are there? Will you work at your business or will you hire employees? How are responsibilities split up among employees and bosses? Will you offer promotions or other incentives? Often in this section, graphs are used to visually represent these assignments.
5. Goods and Services.
Here, you’ll want to more fully describe the product you offer. You’ll want to describe the specific benefits for you intended market, and you’ll want to explain how it differs from what is already offered by competitors. Say, for example, you’re opening a hair salon and your salon will be the only one in your city to offer a particular hair care line. You would want to include that in this section.
The marketing strategy section describes your strategy for growth. How will you increase your business and branch out down the road. Here you can discuss plans to franchise. You will also discuss your plan to advertise to prospective customers. Will you use viral marketing, print ads or a mix?
7. Financial Projections.
Here you put your market analysis into a conversation with your company’s goals. You describe how the numbers match up and how they will ultimately lead to a profit. If you’d been running a business, you would show your numbers here, but since you’re just starting out, you’ll be submitting prospective financial information. You’ll be forecasting your costs and your gains to show when you’ll start making a profit, and if you’re asking for investors, when they will start to see the fruits of their investment.
The business plan is an essential first step as you begin to consider opening your own business. So many businesses fail in the beginning stages. With an honest and reasonable look at the market and your businesses’ possibilities, you’ll have a better chance of anticipating every angle and better insuring your success and the success of your investment.
Lyndsey Freeman is a full-time writer for higher education blogs and journals nationwide with a focus on business education opportunities, including Howard University and Georgetown University which offer online MBA degrees.
This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.