A business plan is your road map to profitability and success. A well-conceived plan describes the vision you have for the business and the path you will take to achieve that vision. It also serves as a communication vehicle for employees, customers, and potential financial resources. An effective business plan has nine key elements.
1. Executive Summary. The executive summary outlines the key sections of the plan, such as the company’s mission and goals, target markets, products and services, major competitors, marketing strategy, and finances. The summary should be one or two pages long and should convince the reader to review the entire business plan.
2. Company’s description. The company description provides a clear idea of what your company is, what it does, and how it will operate. In other words, it articulates your company’s strategy mission statuswhich is a short, formal statement that describes the specific purpose of your business.
3. market niche. This section of the plan describes your target customers, the broader environment in which your business will operate, and why this environment is viable. The key is to identify your desired niche and explain why you can be successful. To do this, you must answer three questions:
Who do I serve (who are my clients, who are the people I want to have as clients)?
What value do I offer (what can my customers do thanks to me = value proposition)?
How do I help customers achieve this value (what goods and services do I offer)?
4. Competence. This section of the plan outlines your main business competency, including its strengths and weaknesses. The most important factor is identifying your competitive advantages. You can develop this section effectively by answering the following questions:
Who is my main competition?
How is what I offer different from these competitors (think about your value proposition)?
What are my competitive advantages and disadvantages?
5. marketing strategy. The most important step you can take as an entrepreneur is to effectively market your goods and services. You can have the best products in the world, but if nobody knows about them, your business will fail. Creating a successful marketing strategy is all about addressing the 5 Ps:
Product – What are you selling?
Price – How much will you charge?
Persona – What is your target market (ie, niche market)?
Place – How will your goods and services be distributed?
Promotion: How will you inform potential customers about your products and services?
6. Operations. The operations section describes how the work will be done. This is not a particularly detailed section of your business plan, but it should describe your company’s typical business activities.
7. Management and organization. This section identifies the key business managers and the organizational structure. This is a very important section when you have a staff. It is also essential when looking for capital. Investors will closely scrutinize the background of the management team running your business.
8. long term development. This section of the plan describes how your business will grow over time. You must provide a specific timeline for the development of the business, including identification of potential risks your business faces. You can begin this process by answering the following questions:
Where do you want your business to be in 1 year in terms of product, person and place?
Where do you want your business to be in 3 years in terms of product, person and place?
9. Finance. The last section of the business plan outlines your financial projections for the first few years of the business. Ideally, this includes the production of various forms, including a Statement of income (describes anticipated earnings over a specified period of time), a cash flow analysis (estimates the movement of cash in and out of the business), and a analysis break-even point (estimates the point at which the income received equals the cost of generating that income).