A business plan is a guide which outlines the business’s goals and provides details on the plan to achieve those goals. When writing a business plan, it is common practice to include certain key sections.
Executive Summary
This is the first section of the business plan and provides a high-level summary or snapshot of the business. The executive summary is like the introduction of the business plan and as some people may not read beyond this section, you need to ensure it is high quality so that it captures the readers’ attention. The executive summary should outline the mission statement and objectives and ideally should include a sentence or two on every other section in the plan.
Company Description
This section describes what the business does and begins by including some basic information about the company such as the official name, location and size of the business. A key part of this section is a description of the problem that the business solves and the customers that it serves. The company description can also include an overview of the products/services you plan to sell and the target market, but specific details should be left for later sections.
Products or Services
This part of the business plan focuses on the product or service that your business sells and the value it provides to customers or clients. It should be clear what the purpose of your product/service is and how it fits into the marketplace. This involves researching competitors to find similarities and differences with a focus on how your product/service stands out in the market.
Organization and Management
This section focuses on the structure, management and key members of the organization. The structure of the business depends on the type and size of the organization while the description of the management team should outline who will be running the company along with some details on their skills and experience. This information can also be included for other members of the business and displayed in an organizational chart so it is clear on everybody’s roles and responsibilities.
Market Analysis
This section provides an in-depth analysis of the industry you wish to operate in starting with an industry description and outlook which reviews both the current and expected future state of the market. The market should be segmented into groups and then the target market identified and analyzed. If market research is used then results should be included in this section. Finally, competitive analysis should be included which evaluates competitors’ strengths and weaknesses and considers barriers to entry.
Marketing Strategy
This builds on the market analysis section by explaining how to attract new customers and promote your products or services to increase sales volume. Marketing strategy utilizes the marketing mix – product, price, place and promotion. These are the key concepts which need to be considered when constructing a marketing strategy and should be closely related to the product’s USP. When creating a marketing strategy for a service then people, physical evidence and process is added to the original marketing mix.
Strategy and Implementation
This section focuses on the organization’s strategy and how it will go about implementing it. A commonly used tool is SWOT analysis which helps you develop a strategy by forcing you to account for all the internal and external factors which impact the business. Internal factors can be split into strengths and weaknesses while external comprise of the opportunities and threats present in the market environment.
Financial Projection
Financial projections are arguably the most important part of any business plan as they can often determine whether or not you receive funding. It is also regarded as the most challenging as it depends on your ability to accurately predict the future. The key financial projections included in this section are the sales forecast, income statement, cash flow projection and balance sheet.
Conclusion
This section should start by restating the opportunity and reviewing the key points of the business plan. The vision of the organization should be clear and the steps the company will take to achieve its strategic goals should be outlined. To attract investment, it is important to justify why the business will be a success so the focus here should be on the strengths of the organization such as a strong management team or marketing expertise.
References
This is the final section of the business plan and should start by listing references of the sources that were used to write the plan such as company websites or databases. Also included should be any additional documents which were not included in the main body of the business plan but would be useful if the reader requires a more detailed understanding. This can include charts, graphs or tables to supplement other parts of the plan such as data from a market study.