Parts of a Business Plan- In order to help a company launch, grow, and thrive it is important to write a business plan. The business plan provides the company with a vision and a clear strategy. The best way to write a business plan is to break it down into sections. A business plan should contain seven main sections.
1. Executive Summary
The first section should be a brief overview of the business plan, this needs to be concise and well-formulated. The goal is to grab the reader’s attention so they are posied to learn more about the company.
This will include:
- Brief introduction about the industry
- An overview of the company, the principles, and the product/service
- A small paragraph about the owner
- Key facts and figures pertaining to the financials of the company
- The purpose of the business plan
To learn more, please read our detailed article: Pitch Perfect- The Executive Summary.
2. Company Description
The second section of your business plan includes a high-level view of the business. This section introduces the who, what where, and why of the business. It should include the legal structure of the business, brief history, an overview of the products/services, customer segments, and suppliers.
Useful subheadings to include in this section are:
- Vision Statement
- Mission Statement
- Values/Principles/Ideologies
- Strategies
- Objectives
- Milestones
- Challenges
- Product/Service Description
- Pricing
In addition to the above, including any other subheading that would provide essential information about the company should be added.
3. Products and Services
With a focus on the customer benefits in the third section, it should be clearly described what is being sold or offered. In this part of the business plan, details about the suppliers, product or service costs, and the net revenue that is expected from the sale of the products or services should be included.
4. Market Analysis
In the third section, the industry study should be shown and conclusions should be presented. This is an integral part of the business plan and should always be based on thorough market research. Market analysis should include the complete details of the customer segments being targeted. Furthermore, size and demographics of each group, industry description and outlook along with statistics, projected marketing data for the product/services, detailed evaluation of competitors should be added to this section.
Market research can include information such as:
- An overview of how much the industry is earning
- Past trends of the industry
- Future expectations of the industry
- Industry statistics, infographics and other important risk related information
- Government influences on the industry
- Other factors that can affect businesses in the industry
5. Strategy and Implementation
The sales and marketing strategy should be summarized in the fifth section.
6. Organization and Management Team
The company’s organizational structure is outlined in this section. This part of the business plan should clearly outline the owners, the management team and board of directors. It is best practice to include an organizational chart detailing main management and key departments. The size of the organization chart will vary dependent on size of the setup.
7. Financial plan and projections
In the last section which is probably the most important section for investors, the focus is on hard numbers. This typically includes historical financial data, realistic prospective financial information, and a brief analysis of the financial data. These future projects are usually made with financial modeling. Sentient Solution offers some financial modeling which is made based on the client’s geographic market. In short, this section details what the current market situation is and how marketing strategies discussed above would create revenue.
Things to consider for the financial sections are:
- An appraisal projection (using discounted cash flows to calculate net present value)
- Break-even Analysis
- Sensitivity Analysis
- Financial Statements (Income Statement, Balance Sheet, Statement of Cash flows)
Business plans require time, resource and careful planning. Even though they are unique to each business, it is important to consider these essential aspects of preparing a business plan. Good luck!
If you would like our team of professionals to help you write your business plan you can get a free consultation.
