Business Plan

 

Business Plan

 
A business plan is a written description that tells what a business plan to do and how it plans to do it. Business plan is a strategic document and must cover the resources and abilities of the business. Business plans include a marketing plan and financial plan that extends 3 to 5 years into the future. Usually business plans are written to raise financing, but business plans are also an invaluable tool to review strategic alternatives, develop a roadmap and grow a business. Business plans force the business owner to think through all elements needed to make a business a success and commit resources legally and financially. Usually a business plan includes SWOT analysis (Strengths, Weakness, Opportunities and Threats) and Porters five force analysis, which forces an entrepreneur to deeply analyze and think through the business domain. Porters five force analysis includes understanding Supplier power, Buyer power, Threat from substitutes, Threat of new entrants, and competition from similar businesses.

Key elements of a business plan include:

1. Executive Summary

The executive summary must be 1-2 pages long and must provide a summary of the entire business plan including the key strategic direction, product and services offered marketing plan, operational plan and financial plan. The executive summary must be written last and typically contains at-least one paragraph for each section listed below.

2. Business Overview

The business overview section includes the business history, mission and objectives. It also lists the team members with their bios and the ownership structure.

3. Products and Services

This section lists the products and services offered by the business including features and benefits and competitive advantages of the products or services offered over the business. The section must cover how the business differentiates itself from the competition.

4. Industry Overview

5. Marketing Plan

6. Operations Plan

7. Financial Plan

The financial plan is perhaps the most important part of the business plan one must devote more 2/3rd of time allocated to this section. The financial plan incudes three years’ of financial projections, including income statements, pro-forma balance sheets, and monthly cash flow statements. Additionally, the section should include an easy-to-understand summary of the financials and the must state all the assumptions made in developing the projections.

 
 

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