Key Elements of a Business Plan | Fusion - WeRIndia

A business plan is a description of the business, a road map that will help you get to your desired destination.

It gives you an idea of the obstacles that lie ahead and can point out possible alternate routes.

One of the major benefits you will receive from developing a business plan is getting to thoroughly know your industry and market.

A well-prepared business plan will not only assist in plotting a course for the company, it can also serve as a vital sales tool.

Now it’s time to roll up your sleeves and get everything down on paper.

When writing your statement of purpose, don’t waste words. If the statement of purpose is eight pages, nobody’s going to read it because it’ll be very clear that the business, no matter what its merits, won’t be a good investment because the principals are indecisive and don’t really know what they want.

Make it easy for the reader to realize at first glance both your needs and capabilities.

 The following pages will describe in detail these sections of a business plan:

What you should include, what you shouldn’t include, how to work the numbers and additional resources you can turn to for help. With that in mind, jump right in.

 

Executive Summary

It is the most important part of business plan. Try to keep this section short and business like, probably no more than half a page.

It must be clear, concise and compelling so that people can read further.

The summary should tell the reader what you want. What the business owner desires is buried on page eight. Clearly state what you’re asking for in the summary.

Within that space, you’ll need to provide a synopsis of your entire business plan.

Here are the major elements of a business plan:

Business concept

Describe the business, your company and what it does. Include a look at when the business was formed, and your mission statement.

Describes its product and the market it will serve. It should point out just exactly what will be sold, to whom and why the business will hold a competitive advantage.

Financial features

Highlights the important financial points of the business including sales, profits, cash flows and return on investment.

You should include the following financial forms with projections for three to five years:

• Income statement
• Cash-flow projections
• Balance sheet

Financial requirements

Financial statements show where your business is at right now and provides you with the information you need to make decisions. Clearly states the capital needed to start the business and to expand.

It should detail how the capital will be used, and the equity, if any, that will be provided for funding. If the loan for initial capital will be based on security instead of equity, you should also specify the source of collateral.

 

Current business position

Furnishes relevant information about the company, its legal form of operation, when it was formed, the principal owners and key personnel.

Market

Outline the industry you are in, how you fit in and what will be your market share. It is very important to know your customers as success depends on you being able to meet customer needs.

• Who is your primary customer?
• What are the demographics of this customer base?
• Why have you chosen this customer base and how large is it?
• What are the trends that are influencing and affecting your market (customer base)?
• How are you addressing these trends?
• Who is your competition and how will you be able to compete?

By knowing and understanding your competition you will be able to better position your product or service in the market place.

• What is the price of your product or service?
• How does this compare to similar products in the market?
• How will you distribute your product?

 

Marketing Plan

A market analysis enables the entrepreneur to establish pricing, distribution and marketing strategies that will allow the company to become profitable within a competitive environment.

The marketing plan is very important – you can have the best product in the world but if you have no sales, you have no business.

• How will you make customers aware of your product or service?
• Where will you sell your product (farmers market, farm gate sales, retail, etc)?
• When will you launch your marketing plan?

Management Team

This section includes your company’s organizational structure, details about the ownership of your company, descriptions of your management team and qualifications of your panel of experts or board of directors.

The quality of your people will determine the success of the business.

Investors pay attention to this section. They want to know that you have the right people for your business.

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