The key to building a successful business is by formulating a sound and organized business plan. Whether big or small, every enterprise must always begin with a compelling plan of action. If you are just a startup, you do not need to worry because writing a business plan should never be too complicated. In this step-by-step guide, you will learn the 8 main components of a business plan and the details that should be written for each section.
- Executive Summary
This section will discuss the overview of your business goals and vision. Briefly discuss the following details:
- Products/services you will be providing
- Target market
- Company’s mission statement
- Business industry sector
- Company owners and business experiences
- Goals and Objectives
This should discuss how you see the business will evolve in the short term and long term period; who your customers are; and a brief discussion of how you will meet your audience’s needs. Remember to just keep this section of the business plan simple and straightforward.
- Products and Services
Here you will breakdown the essential information regarding your products and/or services including the cost, price per unit, billing process, and packaging and delivery. This is also the part where you showcase the competitive advantages of your products and/or services compared to your competitors.
- Marketing Scheme
Your marketing scheme is one of the most critical components of your business plan as this contains all the necessary plans of action on how you will sell your products/services. This section includes:
- Industry and market evaluation
- Distribution strategy
- Advertisement/Promotional tactics
- Sales strategy
- Competitive Analysis
In building a business, it is also important that you do a thorough research on your existing and possible competition including their strengths and weaknesses so you’d be able to properly gauge your advantages and improve your possible disadvantages.
- Operation Plan
When you have finally identified the products and services that you will be providing, as well as the market that you will be servicing, the next thing that you need to plan for is your operations. Your operation plan must include the following details:
- Logistical scheme (facilities, transportation,utilities, etc.)
- Legal requirements (permit, license, certifications)
- Organization Plan
In order to achieve a smooth-sailing business, you will have to invest in manpower and this is where you discuss each one of them. Under your organizational plan is the list of your team members who will have their respective functions and responsibilities. For example, manager, team supervisor, accounting staff, logistical staff, technical personnel, etc.
- Financial Plan
Lastly, your business plan must conclude with a sound and rational financial plan. In writing your financial plan, you have to include your 12-month revenue projection, as well as your annual anticipated earnings for the first 5 years of your business. Specifically, this section of the business plan typically includes five basic financial projections which are as follows:
- Balance sheet
- Income statement
- Cash flow analysis
- Operating budget
- Break-even analysis