Business Plan Core Components

 

When considering what you want to include in a business plan, it is important to reflect on both why you are writing the plan and who the plan is for. Remember, a business plan serves as a roadmap for your business and provides the information necessary to help you make strategic decisions that will lead to success and provide external parties with the information they require to determine their view on your organization.

Executive Summary

The executive summary should provide an overview of the entire business plan and include a brief description of the company, its mission statement, objectives, and competitive advantages. It should include a summary of the company's products and services, market analysis, marketing strategy, financial projections, and management team. The executive summary should highlight key points, such as unique features, competitive advantages, and potential risks. Keep it concise, as it is meant to be a summary, with detailed information provided throughout the document.

Mission and Vision Statements

The mission and vision statements of a business plan outline the purpose and goals of the company. The mission statement typically describes why the company exists, while the vision statement envisions the company's desired future state. Both statements should be inspiring and aligned with the company’s values.

Mission Statement

Your mission statement is an opportunity to present an inspiring vision for your company. Think about why you started your business and what you hope to achieve. Keep it short and focused.

Simple mission and vision statement examples

Mission Statement: We are a customer-focused organization, dedicated to providing innovative and reliable products and services that meet and exceed our customers’ expectations.

Vision Statement: We strive to become the premier provider of our customers' preferred products and services by leveraging cutting-edge technology and best-in-class customer service.

                                   

Mission and Vision Statements from Well-Known Organizations                                    Microsoft Mission Statement: “Empower every person and every organization on the planet to achieve more.”                     Amazon Mission Statement: “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.”                     Google Vision Statement: “To organize the world’s information and make it universally accessible and useful.”                     Apple Vision Statement: “To make the best products on earth and enrich people’s lives.”                     Walmart Mission Statement: “We save people money so they can live better.”

Company Description and Background

This section should include information about the company's history, current operations, and future goals. It should cover the ownership structure, management team, and key employees. Researching industry and competitor information will help you position your company and highlight its unique attributes.

Value Proposition

The value proposition defines what makes your product or service stand out. It should explain why customers should choose you over competitors, focusing on benefits like better quality, lower cost, or faster delivery.

                                   

Tips for Writing an Effective Value Proposition                                    Identify Your Target Audience                     Focus on Benefits                     Keep it Simple                     Make it Specific                     Know Your Competition

Products and Services

This section details the goods or services offered by your business. It should include descriptions, pricing strategies, and competitive differentiators.

Revenue Model

A revenue model outlines how your business plans to generate income. Different models include subscription, freemium, advertising, and retail models.

Market Analysis and Growth Opportunity

This analysis provides an overview of the industry, potential customers, competitors, and consumer trends. It helps in identifying growth opportunities and positioning the business effectively.

Competitive Advantages

Identify what gives your company an edge over competitors, such as proprietary technology or unique production methods.

Customer Persona

Customer personas are profiles of your ideal customer. They provide insight into the target audience, their behaviors, and needs.

Organization and Management

This section should describe the operational and management structure of the business, including staffing, production processes, and quality control measures.

   
• How will staff be recruited, trained, and managed?
   
• What will be the production process?
   
• How will inventory be tracked?
   
• What quality control measures will be implemented?
   
• How will success be measured?
   
• What systems ensure efficiency?

Service or Product Line

Clearly describe the services or products your business offers, highlighting distinguishing features and pricing strategies.

Marketing and Sales

The marketing plan should include brand awareness, target audiences, and promotional strategies, while the sales plan should focus on lead generation and conversion.

Financial Projections / Financial Statements

Financial projections should cover budgeting, sales forecasting, profits and losses, cash flow projections, and balance sheets.

   
• Budgeting - Tracks finances and guides future investments.
   
• Sales Forecasting - Estimates future revenue.
   
• Profits and Losses - Measures expected profitability.
   
• Cash Flow Projections - Analyzes cash inflow and outflow.
   
• Balance Sheets - Snapshot of financial health.

Funding Request Information

If seeking funding, outline the amount needed, intended uses, and potential returns for investors.

Supporting Documentation / Appendices

The appendix should include any additional documentation relevant to the business plan, such as financial statements, market analysis, legal documents, and management team profiles.