SKI CommunicationsComponents of an Effective Business Plan
A business plan is an important planning tool, and it provides a solid foundation for building a successful business. Your business plan is a "living" document that should continually evolve to reflect the changes and growth of your business.
Whether you're preparing to launch a new business or you've owned one for years, there’s never a bad time to craft a "well structured" business plan.
Serving as a road map for the next three to five years of your business, your business plan should include the following essential elements:
1. Executive Summary:
Although it’s typically the first element of a business plan, the executive summary is written last. Your one-page executive summary should include:
• Your mission statement
• When your business was founded
• Who founded the business
• A description of your products or services
• A summary of how you want your business to grow
• Highlights of your growth (if you've already been in business)
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2. Company Description:
This is where you describe what your business does, how it satisfies a need in the marketplace and the specific types of customers you serve. Make sure to mention any competitive advantage that differentiates you from your competitors.
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3. Market Analysis:
This is where you determine what share of your market you can capture by providing details about your target market (size, demographics, needs, purchasing trends etc.)
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4. Competitive Analysis:
This is where you formulate a strategy to stand out from the crowd.
• What are your competitors strengths and weaknesses?
• What are they trying to achieve?
• How do they market their business?
• What barriers must you overcome to compete?
• What opportunities can you take advantage of to bypass these barriers?
Your competitive analysis is a by product of your answers to these questions.
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5. Management and Operations:
Here, you write a detailed description of who does what in your business and provide background information for key players.
It should include:
• Your organizational structure
• Ownership information
• Profiles of your management team (if applicable)
• Number of employees (if applicable)
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6. Marketing and Sales:
This is where you find and create customers by defining your marketing and sales strategy.
When working on this section, ask yourself:
• How and where do we plan to share our messaging?
• Who will handle sales?
• If necessary, how will we train someone to handle sales?
• What tactics are we going to use to identify, attract and convert leads?
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7. Financial Summary:
Last but not least, finish your business plan with information about your businesses financial health and future.
In this section, be sure to include:
• Your income statements
• Cash flow reports
• Balance sheets
If you're seeking FUNDING, your "Financial Summary" is critical and must be as current, accurate, and detailed as possible.
What else should go into a good business plan? Comment below!