Developing a business plan may be one of the most important things a business owner can do. A business plan will provide the owner with insight into the overall direction the business needs to go in and the obstacles and challenges that need to be overcome to achieve success. Lenders and investors will also require a written comprehensive business plan before investing in your business or providing you with a loan.
The following are the different parts necessary for a comprehensive business plan.
The first page of a business plan should be the executive summary which provides investors and lenders an overall sense of what your business is all about. This will include a mission statement, short description of services and products offered and broad breakdown of financial plans.
This part of the business plan should provide basic company information such as the registered name of the company, the location of the business and the names of key personnel along with their skills and past professional experience. You should also indicate in the company description the type of business entity you are operating, such as a sole proprietorship, partnership, or corporation.
This section outlines your objective goals you are aiming to accomplish with your business endeavors. You will include goals for market development and financial goals in the short-term as well as long-term.
Products and services description
Here is where you want to go into detail about the services and products your business is providing to the market. This will include an explanation of how the product or service works, the pricing strategy and supply chain strategy. Describe your target demographic and your marketing strategy for reaching these customers. Your plans for distribution of product should also be included.
Next will be the market analysis section which will detail the market landscape in which your business will be looking to operate in. This will include research on your significant competitors and what the barriers to entry would be for new competitors to enter the market. You will also want to describe what sets your products or services apart from your competitors.
Marketing and sales plan
Developing a solid marketing and sales strategy is essential for ensuring you will be able to reach your target customers to let them know about what you are offering. Presenting this strategy as a part of your business plan will let lenders and potential investors know you will be able to effectively promote your products or services.
Startup companies may not have much financial data to provide in the business plan. However, those who have been in business for a while will want to provide profit and loss statements, balance sheet, list of assets and debts, cash flow statements and other pertinent financial data as a part of the financial analysis section of the business plan.
Lenders and investors want to know what is going to happen in the future regarding the profitability of your business. This is why your business plan should also include financial projections of future business performance.