If you are writing a business plan, you should know that a good business plan has several components. Professional business schools teach their students how to write a good business plan in extensive detail. However, small-business owners may not have the degree and experience to create their own business plan. As a result, they usually use online resources to learn about the different parts of a business plan and to write their own business plan. There are several websites offering detailed help on writing a good business plan, but here is a short guide that should prove helpful.
The goal of an executive summary is to cover the entire business plan in one page. This single page will describe the entire business, its financial backing, investors, product, product manufacturing, etc. Although this section appears in the beginning, it is usually written in the end, as it is essentially a recap and guide to the entire policy.
As the name suggests, the company description section provides information about the company. As a business, you are trying to sell a product to consumers. However, you have to justify to the reader why your business can be successful, and what gave you the idea for setting up the business. The company description will also include the legal form of the business, nature of your business, what you need to set up the business, a brief history of the company, a summary of company growth, short term and long-term business goals, overview or products, customers and suppliers, manufacturing process, etc. Try to keep this section as relevant as possible and try to draw in the reader to be interested in your company.
For a company to succeed and grow, it should provide a product that is clearly going to sell at a profit. In this case, the product/services description should provide a complete guide to the product and how it can benefit the consumer. You should identify the target market and show how the consumer will use your service to fulfill a valuable need in the market. Sometimes, investors want to see essential research and development information about the service and its cost and the profit potential associated with the product after removing R&D costs.
In the end, it all comes down to how good your product is and how well it will sell and this has to be proved by market data. Market analysis is where you will present data about a product and show how it will sell due to demand. For example, if you are promoting a window cleaner service, you have to show the reader the demand for window cleaning, current competitors already in the areas, how your services are better than other companies in the area, and what will make your business profitable.
This is where you actually show how you plan to sell your products to the customer by creating brand awareness, pricing your products, setting up sales chains, advertising, packaging, sales promotions, etc.
Financial Plans and Projections
Financial plans are a complete list of how you plan to finance your business, how much you have invested in the business, how you plan to raise finances, the cost of the product, manufacturing costs, etc. According to the Houston Chronicle, this section should be the most comprehensive section of the business plan to convince investors to give funds for your company.
Although there are several components to a business plans, not all of these components will be applicable to your business. Professionally created business plans may be as much as 30 to 50 pages long, but you may not need to have such a detailed plan. Business website entrepreneur.com states that some entrepreneurs may even write a single page business plan that will cover every aspect of a business and still prove to be impressively comprehensive. As a result, much depends on the nature of your business, how you present it and the data you have placed in the business plan. A short plan is just as effective as a long plan, provided it describes all the information required.
However, if you are creating the business plan for a specific reason like financial investment, stick to the traditional format. Financial investors, banks and angel investors want a detailed breakdown of a business and they are not satisfied with single page business plans. Single page business plans will not provide detailed information about a business and a single page will not be acceptable. In this case, if you do not have the professional expertise, you may want to hire a professional writer to create the business plan or use an online generator to frame the business plan so you can make sure you don’t miss something vital.