You should know that bankers and investors are familiar with nearly every part of a business plan, and they expect a good business plan to have certain parts that they can review immediately to save time. As a result, most business plans follow a set format and each part of the format covers a part of the proposed business. Ideally, business schools teach their students the different parts of a business plan and formatting. However, not every businessperson has been to business school, and you may not know how to get started or what aspects are necessary. This short guide should help you understand the different parts of a business plan. It will also help you create a good business plan to impress the right people.
Parts of a Business Plan
Executive Summary – This is probably the most important part of a business plan. Professional investors don’t have time to read the entire 50-90 page business plan, and they usually jump to the business plan executive summary to understand your business. Although this summary appears in the beginning and before the actual plan, it can only be written after the entire plan is complete to provide an accurate guide to the entire plan.
Company Description – As the name suggests, the company description should explain the company, how the company works, the goals of the company, and other features like the legal structure of the company. This section should also describe the nature of the business. For example, every business satisfies a consumer need. In this paragraph, you are supposed to describe the need and how your business can satisfy the need by producing a product or a service that will sell at a profit. Identify what makes your product or service preferable to other offerings. This section should also have a brief history of the business, the overview of the products or services, summary of the company growth and a short-term plan for production and sale.
Products – As a business, you are manufacturing a product that will be in demand with consumers. Your aim in this part of the business plan is topromote the product, show how it it different and can help the consumer. This paragraph or section should be as detailed as possible with graphs and illustrations about the product, how it is manufactured, the cost price, and explanation of research and development that went into making the product, etc. Essentially, you are trying to produce an entire picture of the product, how it will help consumers and the benefits to the consumers.
Market Analysis – After you’ve finished promoting your product to the reader, here is where you will actually back up the information with market research. You will have to show graphs and detailed illustrations about targeted customer groups, size of the customers and demographics of the groups. This section shouldexhibit the knowledge that you possess about the industry you want to venture in. You will have to combine this with statistics about marketing your product in a particular market and a detailed evaluation about your competitors in the same market. This section is what financial experts will use to analyze your products and assess the relevance of your product for its profit potential.
Strategy and Implementation – Now that your reader knows about the product, it is time to show the reader how you plan to sell your product and create a profit. You have to show a detailed plan about target customers, pricing, promotional deals, distribution, company functioning, manufacturing teams, employees, data, etc.
There are many more aspects to a business plan like organization, management, financial backing and planning, projections, etc. However, as business website NFIB suggests, these cannot be covered in a single article, not all of them are always necessary, and it’s a far better idea to find professional guidance from experts.
Although you can write your business plan yourself, it is a good idea to hire a professional firm to critique or create your business plan. The writer will be familiar with the plan and format and they will quickly create the plan for your business needs. Of course, you can also use an online business plan generator to create a free business plan for your needs. A generator is fine, but you will have to re-read the business plan and then add features that are relevant to your business. You sit with your professional writer while you make your business plan to ensure that the plan is detailed and correct.
