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7 Elements Of A Business Plan

Business plan examples

❶A business plan won't be useful until you're certain what your company exists for. This is your chance to describe your company and what it does.

Business plan templates

The Importance of a Business Plan


Consider the company Coffee House, Inc. The founders are excited about providing a coffee shop for customers using their own brand of coffee.

They plan to grind the beans at the coffee house to provide fresh coffee, as well as sell some of their product in bulk to customers who want to brew at home. They can also sell accessories to help customers make the most of their coffee experience, at the shop and at home. A business plan can take ideas from the founders, put them to paper and provide a roadmap to take action.

Any business hoping to raise funds, either with the help of loans or through venture capital, needs a plan. If you show up at the bank to ask for a loan, all the decision-makers will want to see a business plan. Venture capitalists also like to know that you are organized and informed and that you have a strategy to help them realize a return on their investment. However, you can benefit from a business plan beyond raising money. The market analysis section can help you clarify your efforts so you focus on just the right thing to find your niche and exploit it.

A good business description can help you stay on track, while sales strategies can remind you of how you plan to increase your revenue. Your business plan is about organizing and planning ahead so you have the lay of the land and are ready to build your business in a way that makes sense.

It can also give you a solid roadmap to help you navigate the tricky waters. The seven components you must have in your business plan include:. All of these elements can help you as you build your business, in addition to showing lenders and potential backers that you have a clear idea of what you are doing.

The executive summary is basically the elevator pitch for your business. It distills all the important information about your business plan into a relatively short space. One of the best ways to approach writing the executive summary is to finish it last so you can include the important ideas from other sections.

Instead, they only have access to fast coffee. With the experience and expertise of the Coffee House team, a missing niche in town can be fulfilled. This is your chance to describe your company and what it does. Include a look at when the business was formed, and your mission statement. These are the things that tell your story and allow others to connect to you.

It can also serve as your own reminder of why you got started in the first place. Turn to this section for motivation if you find yourself losing steam. Some of the other questions you can answer in the business description section of your plan include:. This is your chance to look at your competition and the state of the market as a whole. Your market analysis is an exercise in seeing where you fit in the market — and how you are superior to the competition.

As you create your market analysis, you need to make sure to include information on your core target market, profiles of your ideal customers and other market research. You can also include testimonials if you have them. Part of your market analysis should come from looking at the trends in your area and industry. On top of that, Coffee House surveyed its city and found no local coffee houses that offered fresh-ground beans or high-end accessories for do-it-yourselfers. Coffee House can create an ideal customer identity.

The ideal customer is a millennial or younger member of Gen X. He or she is a professional and interested in experiencing life and enjoying pleasures.

Coffee House appeals to professionals who work and maybe live in a downtown area. They meet their friends for a good cup of coffee, but also want the ability to make good coffee at home. Use this section of your business plan to show off your team superstars.

In fact, there are plenty of indications that your management team matters more than your product idea or pitch. Venture capitalists want to know you have a competent team that has the grit to stick it out. You are more likely to be successful and pivot if needed when you have the right management and organization for your company. Make sure you highlight the expertise and qualifications of each member of the team in your business plan.

You want to impress. In the case of Coffee House, Inc. They can get good prices for bulk beans that they can brand with their own label.

The founders also have experience in making and understanding coffee and the business. One of them has an MBA, and can leverage the executive ability.

Both have worked in marketing departments in the past, and have social media experience, so they can highlight their expertise. How will you raise money with your business and make profits a reality?

You answer this question with your sales strategy. This section is all about explaining your price strategy and describing the relationship between your price point and everything else at the company.

This includes your social media efforts and how you use press releases and other appearances to help raise your brand awareness and encourage people to buy or sign up for your products or services.

Your sales strategy section should include information on your web development efforts and your search engine optimization plan. Coffee House needs to make sure they utilize word of mouth and geolocation strategies for their marketing. Social media is a good start, including making Facebook Live videos of them demonstrating products and how to grind beans.

They can encourage customers to check in when visiting, as well as offer special coupons and promotions that activate when they come to the house to encourage sales. What will you say to persuade and convince customers that your product or service is better value, more timely, more useful, etc. If it currently has no rival, how will you properly explain the purpose of and the consumer's need for the product?

What advertising and promotional efforts will you employ? For example, two for the price of one specials or free coupons inside those same kid-oriented cereal boxes? Where can you locate lists of the greatest concentrations of children under the age of eight or whatever group constitutes your market? Build a dynamic sales effort.

In a nutshell, this part of your business plan is about how you will attract customers or clients for your product or services. What will your basic sales philosophy be? Building long-term relationships with a few major clients or developing a clientele of many short-term customers? Organize all the relevant information about your business.

Begin creating section headings and putting the appropriate information under the appropriate headings. Title Page and Table of Contents Executive Summary , in which you summarize your vision for the company General Company Description , in which you provide an overview of your company and the service it provides to its market Products and Services , in which you describe, in detail, your unique product or service Marketing Plan , in which you describe how you'll bring your product to its consumers Operational Plan , in which you describe how the business will be operated on a day-to-day basis Management and Organization , in which you describe the structure of your organization and the philosophy that governs it Financial Plan , in which you illustrate your working model for finances and your need from investors.

Write the executive summary last. The executive summary is basically your big appeal to investors, or really anyone who reads your business plan, that should summarize and articulate what it is that's great about your business model and product.

It should be less about the nitty-gritty details of operations and more about your grand vision for the company and where it is headed. Gather all the information together and prepare multiple drafts. You've done all of the hard work researching, deciding what your business is about, targeting it accurately and selling it. It's time to put the business plan together and articulate all your thinking, research, and hard work into a comprehensive description of your structure and service.

At first, do not worry about capitalization, punctuation, and grammar. All you need to worry about is putting your ideas down on paper. Once you have a general form, you can spend time proofreading your plan and correcting mistakes. Have someone else read over it for you and take heed of their comments. Sell yourself and your business. The idea of the business plan is to present yourself in the best light. The talents, experience and enthusiasm you bring to your enterprise are unique.

They provide some of the most compelling reasons for others to finance your concept. Keep in mind that investors invest in people more than ideas. Even if your potential business has many competitors or is not on the cutting edge of an industry, the qualifications and commitment you demonstrate in your plan can convince others to proffer their support.

Focus on group experiences, leadership opportunities, and successes at all levels. Present and explain your financial data. How will you convince others to invest in your endeavor? By having clear, transparent and realistic financial information that shows you know what you're talking about and that you're not hiding anything.

The accuracy of your financial figures and projections is absolutely critical in convincing investors, loan sources, and partners that your business concept is worthy of support.

The data must also be scrupulously honest and extremely clear. Since banks and many other funding sources will compare your projections to industry averages in the R. A data, in the United States you can use the R. A figures to test your projections before the bank does. Sample Small Business Business Plan. Specify the product, source of it, and people in need of the product. List capital, handy or loan. List whether you have sales reps, your availability for outreach on demand, and your source of mobility.

Not Helpful 4 Helpful Is it important to write a business plan for a small business even if financial support is not really needed?

Yes, since you are running a business, you need a plan that keeps you focused on what's important to you. You can also review it once a year to see how much you and your business needs have changed. Not Helpful 17 Helpful Discuss how you will secure financing, showing details on sales projections, costs, etc.

Not Helpful 18 Helpful The same way you would write it for anything else. Just follow the steps in the article. A little different or not. Answer this question Flag as How do I write a business plan about a company which deals in technology? If I want to go into business selling tap water, what would be a good way to approach the business plan? How can I write business plan for avocado supply?

Include your email address to get a message when this question is answered. Already answered Not a question Bad question Other. Quick Summary To write a business plan, start with an executive summary that lays out your grand vision for your business. Did this summary help you? Tips Many sources exist for finding information for your business plan.

Your local library and the internet are always helpful sources. If you live near a university, you may be able to schedule an appointment with one of the college's professors. The professor may be able to give helpful insight. There are a few valuable online archives of business plans that feature companies which have successfully penetrated the market based on a well defined and executed business and marketing plan.

Take the time to study the market through a successful company's eyes and consider what your company will offer that distinguishes your product or service from the rest. Be certain about what gives your business the competitive edge. Make sure you cite your information. This way you will have support for any statistics you put into your business plan.

Warnings Do not submit your draft business plan to potential investors! However, it is advisable to give the executive summary instead of the whole plan after it is completed. Sometimes, busy investors may not have the time to look at an entire plan, which can sometimes be up to 50 pages.

Article Info Featured Article Categories: Thanks to all authors for creating a page that has been read 1,, times. Did this article help you? Cookies make wikiHow better. By continuing to use our site, you agree to our cookie policy.

Shahnawaz Ali Khan Nov 12, In a very simple and easy language, it tells very vital things that will be hard to understand if done some other way. Very nice and practical solution and a way to write a business plan. It is the best option for the inception, and like it said, plan has to change with time. Khurshid Ahmed May 1, But as a beginner, this article was really helpful and I'm looking forward to working on it.

Thanks for making it available. GC Gloria Chepkoech Aug NR Norma Reneau May I truly appreciated the subconscious continual layout of organization how the needed steps appeared to flow smoothly in appropriate sequence to follow with final proofreading for corrections. TM Tumi Molekwa Mar SC Siyanda Cedric Jul 31, That is why most of the businesses are collapsing.

NA Nnabuk Akpan Feb 3. For instance, understanding that investors follow a specific guidelines, such as the Risk Management Association R. WH Wai lwin Htun Sep 11, It notified me the way to reach or to be reached by customers and to present the products or service. This is so important for the existence of a business. CB Casandra Bastian Feb 26, Not only did it tell me step by step what I need for a business plan, but also gave multiple examples that ensured I was giving all the possible information needed.

Zulfi Robbani Oct 26, The steps are easy to follow. The advice and tips make sense. Really helping for complicated tasks when creating a business plan. JJ Joseph Jolly Jun 7, It would be better though if a more detailed structure would be made available. TZ Thet Zaw Jan After reading on your page, I got an idea that what should I do.

So this is really help full for me. SM Salwa Mueen Nov 2, It helped me to become more focused and explicit in my planning. PD Parshu Dahal Apr 11, This article worked as a really important guide to start with.

I am working according to steps mentioned here.


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Jul 11,  · To write a business plan for a small business, start by writing an executive summary that briefly outlines your business. Follow that with a company description that explains your business in 89%().

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A business plan is a written description of your business's future, a document that tells what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan. This guide will explain why a business plan is a must-have, provide a shortcut to the business planning process, help you collect important background information, and get .

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We would like to show you a description here but the site won’t allow us. Start with some of our free business planning resources, like free sample business plans, our one-page plan template, or our template for a complete business plan. Then, scroll down for a complete set of resources that will help you create the ultimate business plan.