Planning to start a business needs careful consideration.
Developing a business plan is one of the first steps in the journey.
A business plan is a document that conveys important information regarding the company structure, its targets, marketing strategy, financial and financial goals to its potential customers.
A well prepared business plan is a key tool to showcase the vision and goals of the company to its potential clients, business partners as well as funding agencies.
Irrespective of the nature of the business, a well structured business plan is required to convince the key stakeholders on the importance of your business and how it stands out among its competitors.
After all, getting your clients, investors, and business partners are all that matters when it comes to initiating a business.
Following are the 10 key components that need to feature in a business plan template:
1. Executive Summary
An executive summary is the window to a business document. The executive summary needs to feature on the first page of a business plan. As the name suggests, an executive summary presents a synopsis of the overall business strategy and discuss the entire business plan in brief.
While the section usually features on top of the document, various business administration schools of thought suggest that the section is presented at the end of the document.
The purpose of creating an executive summary is to create a compelling brief that presents attractive facts about the company’s business plan. An executive summary presents the business plan outline of the entire document in a crisp manner so as to get the prospective clients and investors interested.
2. Organization Information
Immediately following the executive summary (on the business plan format) should be a detailed description of the organization. A company description needs to include key points like incorporation details, services proposed to be undertaken, objectives, annual targets, and goals, list of prospective customers, business partners and investors.
It is also a good idea to add some key highlighting features about your organization and how it stands out amongst various other competitors in the sector.
Various other information like an organization’s team structure, quality assurance plans, environmental accreditations, etc can also feature as a part of this section of the document.
3. Market Analysis
Careful analysis of the market is the key factor that contributes towards the success of a business. Having a section dedicated to market analysis is hence very important element of a business plan.
The market analysis makes use of data and statistics as well as some analyzing software to understand the sector, key players, trends, growth curves, and projections. A careful market analysis is also an important tool to understand the future projections of the sector and how it will affect your business growth.
Market analysis is also important to create an estimate of the amount of funding/ investment required annually. Finally, a market analysis also includes a careful study of the consumer groups, their income levels, spending patterns, necessity, etc.
4. A Study of Competitors
There isn’t a more sure shot way to success within a business than to carefully analyze your competitors. While healthy competition is a sign of growing a growing sector, it is important as an individual business owner to research out your competitors.
Both direct and indirect competitors have an impact on a business. Understanding the strengths and weaknesses of your competitors is the key ingredient for devising a good business plan. Studying the marketing strategies of the key players and top brand names in the sector helps you devise a competitive growth strategy.
Various market issues and trends like high upfront costs, investment plans within the sector, new products being launched by competitors need to be studied to create a business plan.
5. Organizational Set-Up
A description of management and the organization comes next in the contents of a business plan document. Outlining the organization set-up, the key management positions and the job responsibilities should be a part of the section.
It is also a good idea to introduce the names of your company managers/ professionals holding key responsibilities and create a flow chart depicting the management levels within the organization.
If a business runs as a partnership venture, it is also important to define the partnership terms, the ownership details, and the board of directors responsible for key decision making.
6. Description of Products and Services
Dedicating a complete section towards describing the products and services that the business plans to introduce is extremely important. This is what makes the central, key section of the business plan document.
Telling your prospective consumers about your products and services, how they are different from the ones available in the market, the associated cost factors, etc is extremely important. This is what draws the attention of your clients towards the business in the first place.
Products and services section within a business plan document is ideally the first launch pad for a company within a sector. This is where you introduce your products, discuss about their quality, the need for the products within the market, etc.
You can also discuss some factors related to the development costs of the products, the benefits that the company expects to create, the future innovations and technical advancements that may come in, etc.
Finally, the products and services section also needs to enlist patents and copyrights associated with it.
7. Marketing Strategy
What is a business plan document without a detailed marketing strategy section? Describing your marketing plans and discussing how the company plans to achieve its said targets is important to grab the attention of your prospective investors and clients.
Detailing the marketing steps, adding financial plans and targets, budget descriptions, implementation strategies, etc is required within this section.
8. Sales Strategy
Followed by the marketing section should be a description of the sales strategy. Introducing the sales team (preferably with names and numbers), the sales plans for the year, targets set for teams, etc is important.
If the sales team is not yet on board, describing timelines on when and how you plan to get them on board along with their individual sales targets is required in the section.
Getting as specific as possible within this section is important. Break down the annual sales targets to quarterly or monthly targets and describe the parameters for assessing the same.
Discussions on how the organization plans to achieve the sales target, key clients that need to be added to the funnel, etc are important features of the sales strategy section in a business plan.
9. Fund Requirements
Discussion on the funding requirements is a critical component of a business plan. Devoting an entire section to the funding needs of an organization is important.
The estimated capital need, the names of prospective funding agencies/investors and the plans that your business groups have for returning the borrowed capital.
Businesses often rely on extra cash inputs at certain times of the year, in addition to the initial capital investment. Plans to generate the same should also be included in this section.
10. Financial Goals and Projections
The “financial targets and projections” is the final but one of the most important sections within a business plan. After all, this is the section that defines the key targets and objectives of the business in terms of capital returns.
Projections on the expected annual, quarterly turnover after the launch of product/services as well as future estimates for the next few years can be included.
Details of loans that are planned to be acquired can also be provided here.
Each business has its own unique features. And this is exactly why every business plan needs to be a unique document. That said, the aforementioned key components are essential features within every business plan, irrespective of the products and services that the company caters to.
Preparing a well structured, detailed business plan is very important for attracting the right customer groups as well as the targeted investors. Ensure that your business plan provides a crisp, yet complete and accurate summary of your organization, its goals, and future working plans.