Comprehensive Guide on How to Write a Business Plan

Update time:2018-01-16  source:

A business plan describe four main elements of the proposed venture: an overview of the business, a marketing analysis, a financial plan, and a management plan. An executive summary and other supporting documents should also accompany the plan. These elements provide a solid starting point for a general plan, but there is no single formula to a business plan and a multitude of factors will impact the amount of content needed in a good business plan.

The executive summary is a synopsis of the entire business plan. It is critical that this summary be carefully crafted and compelling. This is the first and possibly the only information that a potential investor will read; if it is not informative enough or if it is lacking crucial data, the investor might not read beyond this summary component.

The business overview segment is a profile of the company and its primary industry. Projections, trends, and industry outlooks should be included. In this section the company describes the unique elements that make it a prime candidate for its proposed venture.

A market analysis details how the company will handle its sales and marketing strategies. This analysis includes information on the company's products or services and intended customers, and how customers will be made aware of the product or service. This section should also include a competitive analysis with a break-down identifying Strengths, Weaknesses, Opportunities, and Threats (SWOT) to the company and the business proposed. A plan of action should explain how the company will address, exploit, or withstand each of these eventualities.

The financial section discusses the current financial state of the company and what types of financing will be required for the proposed venture. In this area, it is appropriate to discuss the specific dollar amounts required for the business venture, the cost to maintain and sustain the venture, and projections of income, balance sheets, and cash flow. Statistics, facts, and research should support any financial projections listed.

The management plan section should discuss the strengths, experience, achievements, and expertise of the person or team undertaking the business venture. Investors want to know that they are offering their support to a person or team qualified and capable of handling the business proposed and the funds loaned.

A complete business plan will provide evidence to the lender that the entrepreneur has performed a thorough investigation of this new business venture, because it details how the business will generate cash flow, pay for operating expenses, and service debt repayment.

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