Eight basic elements of a business plan

| Oct 17, 2019 | Business Law

In today’s competitive marketplace, it takes more than just a good idea to stand out in the crowd. Launching and managing a business is hard work, and it can be risky. The best defense is a good offense, and that starts with writing a business plan. A business plan is an indispensable document. It is a blueprint to your profitability and a guide for future decision making.

Writing a business plan will help you pay attention to the nuanced details of operating systems and financial goals and objectives. Taking the time to write a comprehensive business plan will help make for a smooth execution of your new business.

How do you write a business plan?

Writing a business plan does not need to be a complicated, drawn-out process. According to The Balance, a basic business plan has eight main sections:

  1. Executive summary. What is in this document? The executive summary is a snapshot of your business plan, providing your reader with an overview of the report.
  2. Company description. What is your mission? The company description provides your potential investor with an in depth overview of your proposed business. It also includes details of your business, such as location, size of the company, what you do and what you hope to accomplish.
  3. Market analysis. What problem does your business solve for customers? The market analysis demonstrates research on your industry, market and competitive outlook.
  4. Organization and management. What is the legal structure of your business and what is your management strategy? Explain why you and your team will make the business a success.
  5. Customer analysis. Who is your ideal customer? Describe your target customer. Identify their needs and how your product will align with their needs.
  6. Marketing and sales plan. How will you market your products and services? Detail your plans for reaching new customers and sales strategies.
  7. Financial plan. Will you need financing or investors? Include a sales forecast, expense budget, cash-flow statement, income projections, assets and liabilities. This will give potential investors a clear idea of where your company stands financially.
  8. Appendix. What other information should you include to support your plan? You may include additional documents such as resumes, licenses, permits, site or building plans or credit scores.

Writing a business plan is an opportunity to set yourself up for success. It will help you understand how and why your business will succeed.