What Are The Components Of A Business Plan?
Businesses start in a variety of ways. Amazon was started in 1994 in Jeff Bezos’ garage. Three years later, Amazon was being publicly traded. Yankee Candle started when 16 year old Michael Kittredge melted crayons to make a candle as a present for his mom. Now Yankee Candle is the largest distributor of candles in the U.S. Whether you have a vague idea or a fully functioning business, you need a business plan.
Why You Need A Business Plan
No matter where you are in the entrepreneurial process, taking the time to craft a well thought out business plan is vital. When running a business or developing a product, your time and energy is poured into the daily work required to keep the business running. That is the reason a business plan is important, it keeps you focused on the big picture when the details are overwhelming.
8 Key Components Of A Business Plan
Each business plan will look differently, but here are the key elements every good business plan should include.
- Executive Summary: This section includes your mission statements and vision statements. Provide an overview of plan and of the business itself.
- Market Analysis: Who is going to buy your product? Without customers or clients, a business cannot operate. Perhaps you are selling wholesome snacks to health conscious mothers. Perhaps, you are selling high powered binoculars to law enforcement. Determine your market, gather as much information about them as possible, and identify their needs as related to your business. Business
- Company Description: Describe what your company looks like as a whole functioning unit. If you are running a one man shop, this should be easy. Focus on how each “department” works together to create one cohesive, efficient unit.
- Products and Services: Describe what product or service you are selling and how it benefits customers.
- Sales and Marketing: Having identified the market needs and how your product meets those needs, craft a message which will communicate that to your audience. This is your marketing message. If applicable, explain how a salesforce will be deployed.
- Operations and Management: Explain how your management will operate, how labor will be divided, and quality controlled. This would be a good opportunity to brag on your employees or your own credentials.
- Projections and Development: Explain how your company is going to grow or how your products will be further developed. Use this section to create excitement about where your company is heading.
- Financial Summary: This should include a summary of your financial position, as well as projections for growth and subsequent reinvestment.
Presenting Your Business Plan to Investors
It is important to write a business plan when you are first starting a business. It can also be useful to update or rewrite the plan as your business grows. However, if you are seeking investors to take your business to the next level, as business plan not optional. A well-researched, carefully planned, and concisely explained business plan is a must.
Some things investors are looking for:
- Thorough market, competition, and product research
- Customer demand
- Justifiable return on investment
- Your personal business acumen, industry knowledge, and experience
While keeping your plan formatted in a professional and easy to understand manor, don’t be afraid to add your own personal touch. Bring your business to life as you present it.
If you are interested in starting a business or you currently own a business, you know there is always risk involved. Having proper business insurance is a must. Please contact our expert team at H & K Insurance, Watertown, MA, with questions or concerns about your business plan and insurance policy.
