Key Components of a Business Plan
What is a Business Plan?
A business plan is a formal written plan specifying a company’s objectives, strategies, and action plans to achieve these objectives. It is an essential component for any business, small or large. Some people mistakenly believe that a business plan is merely a strategy for gaining investment. In reality, a business plan is much more than that.
A business plan can be used to achieve all sorts of objectives such as introducing new products, implementing improvements in the company’s operational procedures, and even selling company shares through an IPO. They act as a strategic plan for businesses by providing a roadmap for the future.
If you are not sure what to include in your business plan, you can consider these three key components.
1. Describe your business.
Develop your business mission statement and vision statement, your business name, your business industry, your business type, and your company size. This is the part where you will need to specify what are your company objectives, strategies, and action plans.
2. Develop your goals.
In order to have an effective business plan, you should start with a list of your goals. If you have a specific goal in mind, it will make it easier to focus on building a plan to achieve those goals. Try to be as specific as possible. Decide if the goal is a short-term or long-term goal. Write down your goals for the next five years.
You’ll also need to plan how to reach and develop these goals by considering the resources your business already has. Consider if accomplishing this goal will contribute to other goals that the business has. If you need help to define a long-term goal, try to think about a goal that would make your company a better place to work, a better marketplace for your product, etc. In addition to this list of goals, you should have a list of your current resources.
3. Develop a timeline
If you already have a business plan, it is a useful time-saver to use the outline to create the timeline. If you want to include information, such as market research or relationships with suppliers, that you conducted for your business plan, place those items on the timeline as milestones. Create a timeframe for each strategy.
Once you have already constructed your business and goals, you should also know when will be the execution of all of the strategic approaches you listed into your business plan, like how many weeks or months you are going to execute the project and the end date of it.
The business plan outlines all of the tasks you will need to complete in order to make your business a success. This includes marketing strategies for your product or service. The business plan also outlines in detail how you plan to reach success in the future.
An effective business plan should include the following:
- Executive Summary
- Company Description
- Marketing and Sales Strategy
- Company Launch and Development Strategy
- Business Development and Growth Strategy
- Financials and Forecasts
- Company and Organization Structure and Management
- Appendix (e.g., Intellectual Property, Acquisitions and Dispositions, and Additional Information)
An effective business plan will give an indication of the startup company’s growth strategy, financials, and forecasts, management, and organizational structure.
The best way to become a successful entrepreneur is to develop an effective business plan. This is so important to your business is because it is a roadmap of how you plan to reach success. It consists of all of the marketing strategies you’ll use, how you’ll grow your company, the product or service you are selling, and what your marketing budget will be.
