Business plan authors understand that a great business plan has ten important components. Supplying a thorough evaluation of each one of those components is essential in bringing investors.
The first five segments of a business strategy are crucial since normally, investors will not read the entire plan. Therefore, winning the investor’s interest is the foremost goal of these sections. Besides providing background on the entire business opportunity, these elements provide the industry study to back up the company’s overall potential, yet another crucial element in gaining an investment.
Executive Summary. The Executive Summary must convey with the potential investor the dimensions and range of the market opportunity, the enterprise’s business and sustainability model, and the way the resources/skills/strategic placement of the organization’s management staff make it uniquely qualified to perform the strategy. The Executive Summary has to be persuasive, easy-to-read, and no more than 2-4 pages.
Company Analysis. This section gives a strategic summary of the business and explains how the company is organized, what services and products it offers/will provide, and enter into further detail about the organization’s particular qualifications in serving its target markets.
Industry Evaluation. The industry analysis assesses the playing area in which the corporation will be competing, and contains well-structured responses to crucial market research queries like the following:
- Which are the sizes of the targeted market segments?
- What will be the trends for the industry as a whole?
- With what other businesses do your solutions compete with?
Evaluation of Consumers. The customer analysis section assesses the client section (s) the business functions. Within this part, the business must communicate the requirements of its target clients. It must then demonstrate how its services and products meet these requirements to the extent the client will cover them.
Evaluation of Competition. The competitor analysis section provides further detail regarding the competitive landscape of a company. It displays the direct and indirect competitors and analyzes their strengths and weaknesses. It also shows the competitive edge of your company.
The remaining five elements of this program focus mainly on strategy, mainly the marketing, operational, financial and management strategies that company will implement. Expertly and discussing these elements in the business plan helps entrepreneurs to better understand the business opportunity and aids them in convincing investors the opportunity could be perfect for them as well.
Marketing Plan. The marketing strategy details your plan for penetrating your target market segments. Key elements include the following:
- A description of the company’s desired strategic placement
- Thorough descriptions of the company’s product and service offerings and potential product extensions
- Descriptions of the company’s desired brand image and branding strategy
- Descriptions of the company’s promotional approaches
- A summary of the company’s pricing strategy
- A description of present and prospective strategic marketing partnerships/ alliances
If you want to make a professional marketing strategy efficiently, you may opt to use a standard marketing plan template.
Operations and Development Plans. These sections detail the inner strategies for constructing the enterprise from theory to reality, and include responses to these questions:
- What processes and functions are required to conduct the company’s operations?
- What milestones have to be reached prior to the company could be launched?
- How will quality be managed and controlled?
Management Team. The Management Team section shows that the business has the essential human resources to succeed. The company plan should answer questions such as:
- Who will be the key management employees and what are their backgrounds?
- What management developments will be asked to make the company a success?
- Who will be the shareholders or investors, if any?
- Who are the Board of Directors and Advisors?
- Who will be the expert advisors (e.g., attorney, accounting company)?
Financial Plan. The financial plan entails the evolution of the company’s earnings and sustainability model. It is supposed to contain detailed explanations of the major assumptions utilized in establishing the model, sensitivity analysis on key revenue and price factors, and description of similar valuations for existing businesses with similar business models.
Additionally, the financial plan assesses the quantity of capital the company requires, the planned use of the funds, and the anticipated future earnings. It consists of projected Income Statements, Balance Sheets and Cash Flow Statements, presented with quarterly divisions for the first two years and annually for the first to fifth year. All projections and assumptions from the financial plan needs to be supported by the other parts of the business plan. The financial plan is the point where the entrepreneur communicates how he plans to “monetize” the total vision for the new enterprise.
Appendix. The appendix can be utilized to support the remaining portion of the business plan. Other documentation which could be included in the Appendix are technical drawings, partnership and/or client letters, more detailed competitor reviews and/or client lists.