If you are looking for a simplified way to create a unique business plan, then you should scan through these 4 main parts of a business plan listed in this article. It is right to say that a business plan can boost the growth of every business, but the structure of that plan is also important.
According to Wikipedia, a business plan entails the goals of a business, how to set and achieve those goals, and how long it will take to achieve the desired result. In order to create this road map for the success of your business, you need to pick some important components that should be enlisted in your business plan.
There are several components to a business plan, but this article will focus more on the most essential parts of a business plan. These four main parts of a business plan can cover either a small-scale business or a large-scale business, but the main focus should be on creating an effective business plan.
4 Necessary Business Plan Components
When it comes to components of a business plan, there are quite a handful of options. These options also cover a large-scale business. Out of these numerous options, there are major components that should be present in any business plan, they include:
#1. Executive Summary
Believe me, when I say that no one has all the time to go through your 30-pages business plan, you need a summary. The executive summary is one of the 4 main parts of a business plan that should not be ignored. Once you hand out your business plan to any reader, they will scan their eyes through your summary to know if the business sparks their idea or not.
An executive summary should be more of a call to action because it will determine if the reader should inquire further about your business or just let it slide.
While writing an executive summary, you should include your business mission statement. You should also include a description of your product and the services your business offers. Make the readers understand your level of knowledge in your business and how unique you are from the others.
#2. Construct The Management Bios
The key people in your business will determine if the business will be a success or not. This is the reason why their bios must look outstanding to the readers. You will need to impress your readers so they can take interest in your business. That is the more reason why the management bios need to stand out.
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When creating their bios, enrich them with good quality skills that they possess. You can also refer back to their level of expertise and state how they are always ready to deliver services. Include previous positions, experiences, and how you intend to fill any skill gaps with outsourced assets. Note that one good page bio on each of the key people involved in your business is enough to keep you on the good side.
#3. Market Analysis
In this section, explain why you chose this market and why you think it is important in this recent environment. You will also make some good research to detect who your audience and competitors are. You will also be making use of some quantitative analysis. This is because your readers need to see numbers need to detect how important your market segment is and how well it can boost your business.
List the current challenges they may face and how your company can handle the problems. Review your competitors, discuss how far unique you are then they are and the possibilities of taking their market shares from them. From this, your readers or investors will detect how familiar you are with the market. Describe your customers and how to reach out to them to make sales.
#4. Financial Plan
Your financial plan is another vital aspect of the 4 main parts of a business plan that is not to be ignored. Your financial projections are an area of interest to your partners and investors. This is because it determines the viability of your company in the future. Your financial statements should contain lots of numbers represented in charts. It should also contain a few words that describe what it is about.
To get the reader’s attention, add an introductory page to explain how the estimations were made in full detail.
In this section, you should also include income statements, balance sheets, and cash flow statements. When your financial sector is planned out well, it can guide you to start and grow your business.
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The income statements should entail your monthly income projections for the first year of your business, the second year of your business, and annually.
Cash flow statements also entail the movement of your capital. It shows how much your business needs when it will be generated, and when it is going to arrive.
This balance sheet holds the summary of your company’s assets, equity, and liabilities.
The Importance of Having a Business Plan
Entrepreneurs do not just create a business plan for the fun of it. A business plan has a lot to contribute to every business. Having looked at the 4 main parts of a business plan, now let’s buttress more on the importance of a business plan, to see more reasons why you need to create a breathtaking plan.
#1. It Shows Some Level of Seriousness About Your Business
A business plan is more like having a strategy and when an entrepreneur has a strategy for their business, it only means that they are passionate about its growth. This passion shows some level of seriousness and will eventually attract investors, partners, or employees to the business.
#2. It Secures You Some Funds
A business plan can guarantee funds for your business either from your first stage or in years to come. If you have future plans of selling your company to another in the future or even borrowing from a bank, then a business plan is compulsory for that decision. Any financial aider would lookout for a business plan before financing your company.
#3. Gives More Insights on the Market Terrain
Having a business plan will give you an edge in understanding your competitors and the market in a more accurate and broader manner. You will better understand the consumer trends and preferences and know how to navigate them to suit your company’s needs.
#4. Help You Create Critical Decisions
A business plan is responsible for most vital decisions when it comes to a business. One cannot seem to operate a company without having tons of decisive moments and that is where your business plan comes in handy. With a business plan, you will not need to always sit down and articulate your next move in your business. The presence of a business plan shows that most thinking has been done already. With that, it helps you make critical decisions in time and even ahead of time.
#5. Helps Provide Structure and Management Objectives to a Business
The structure and objective of any business will stand firm with the presence of a business plan and without one, objectives often become arbitrary. Some functions like sales targets and operational milestones will be on track with the aid of a plan. When these functions are guaranteed, it will be easier to measure and manage your company.
#6. Pins Out Potential Weakness
Potential pitfalls can ruin any company, but when the company has a business plan, it will identify those weaknesses even before it happens. As an entrepreneur, you might also need to share your business plan with potential professionals and experts to get their advice on how solid your plan looks.
Key Lessons on the 4 Main Parts of a Business Plan
Knowing what matters and following the 4 main parts of a business plan listed above while implementing all that applies is a good way to start off any business. Now to make sure you get the drip, let’s review the top lessons we went over in this article:
- For your business plan to be the talk of the town, you must acknowledge the importance of the 4 main parts of a business plan and inculcate them into your plan. They include the executive summary, marketing plan, financial plan, and key management bios.
- There are other necessary sections of a business plan that you can include in your plan. You can choose to include them if you need to because they must target a specific purpose, function, or audience.
- Don’t compose a boring business plan, make sure you have lots of exciting business ideas for your company. These plans should be listed on your executive summary in order to hook your readers and force them to take action.
Steps to Follow When Creating a Business Plan
- Your first action is to select sections of a business plan, you can make some selections from the 4 main parts of a business plan listed above. Each component should be viable to your business. You can also choose from other parts of a business plan that are not included here.
- Make a rough sketch to determine what you will include in each category of your business plan.
- Get your data and facts ready. These facts and information should be in support of your business plan.
- Fill in each section with the information you discovered. Both the section and its content should be in alignment.
- Lastly, carefully analyze each component with a friend or mentor.
What Next??
Having known how to create a proper business plan, you can then proceed to choose a business that works for you. A bakery business plan won’t be a bad one to venture into and start making mind-blowing profits. To crown it all, you do not have to run extra work on this plan.
We have handled the hardest part of the job which is to create a compelling business plan. All you need to do is implement our plan in your business and watch it boom. Are you ready to start earning? Grab a copy now!
Conclusion
It is argued that business plans are not crucial but the truth is that every company needs a business plan. To create this business plan successfully, these 4 main parts of a business plan should be followed. When these features are all in check, your business will be healthy.
FAQs
What is the basic structure of a business plan?
The structure of a business plan includes an executive summary, an overview of your business, market research and target market, marketing strategy, financial projection and an appendix.
What are the contents of a business plan?
A proper business plan should contain the overall nature of your business and the services you will offer to your customers. Also include the cost of organising the business, revenues and profile to make in the long run.
Can I use a template to create my business plan?
Yes, you can. A template can serve as a guide if you wish to create your business plan by yourself.
