If you are planning on starting a new business or attracting investors to your venture, your first priority should be creating a rock-solid business plan. A business plan is an outline of how a business or company will run, including highly detailed information on all aspects of the business including the industry, marketing, finance, and other various operating procedures.
If you’re looking to curate the ultimate business plan but are not quite sure where to start, you’ve come to the right place. Today, we share with you the top 8 components of a top-tier, fully fleshed business plan. Read on to find out more!
1. Executive Summary
Similar to building a resume summary statement or conducting stakeholder mapping, every good business plan starts with a solid executive summary. The purpose of your executive summary is to provide investors with quick, to-the-point information that persuades them to read further. Think of it as an elevator pitch that hooks an investor in and makes them want to find out more about your proposed business plans.
As a rule of thumb, you should aim to keep your executive summary to less than one page. This will help to ensure that you are better able summarise your business plan without missing out on key factors.
2. Company Description
With your executive summary out of the way, the next step is to curate a strong company description that should effectively answer two questions: who are you, and what do you plan to do? Providing the answers to this question in your company description will help your investors immediately understand what your goals are, on top of what makes you stand out from other businesses.
It is also a great opportunity to communicate less tangible facets of your business such as ideals, philosophies and principles. Some of the components you should include in your company description include (but are not limited to):
- Business model;
- Business structure;
- Vision, mission and value proposition;
- Key personnel and staff;
- Background information and history;
- Analysis of your particular industry; and
Short term and long term business objectives.
3. Business Goals
Whilst your company description would have tread lightly on your business goals and values, the time to focus on developing these goals is now approaching. The business goals and values section of your business plan should always start with an objective statement. This is a statement that details exactly what you are aiming to accomplish, both in the short and long-term.
For example, if you are looking to secure an investment or loan, this is the section in which you will explain why you require these funds and how such financing will help your business grow to eventually achieve your predicted growth targets.
Other examples of business goals include:
- Becoming and staying profitable;
- Maintaining cash flow;
- Establishing and sustaining productivity;
- Becoming a leader in the industry; and
- Expanding internationally.
4. Summary Of Products & Services
Your products and services are arguably one of the most important components of your business plan. After all, having goals and estimates are meaningless if you don’t have the products and services required to achieve said goals. A fully fleshed business plan will consist of in-depth information about all the products and services you plan to offer.
Some information that you should provide include:
- Details on how your product or service works;
- Pending trademarks and intellectual property;
- Where your products are coming from (ie dropshipping, local supplier etc)
- Pricing model for your product or service;
- The type and number of customers you cater to;
- Sales strategy;
- Distribution strategy; and
- Supply chain and order fulfilment strategy.
5. Market Research
Investors are always looking out for what you bring to the table in terms of individuality and uniqueness which is why doing your market research on competitors is vital. In this section, you will identify your competitors and explain what sets you (or your product/service) apart from the crowd. If you are catering to a different or underserved market, be sure to explain that in depth. At the end of the day, investors want to know what and how you can do better than competitors.
Additionally, providing information on your target market is key. Since this can be a challenging process, here are some general tips to help you begin your research:
Understand Your Customer Profiles: If you are targeting pre-teens or teenagers, check government data to assess the size of that group. You should also look into projected changes to the number of people in your target age range over the next few years.
Conduct Research Into Similar/Relevant Industries: Research similar or relevant industry trends and trajectory. If your product caters to teenagers, look into consumption patterns for that demographic and general predictions for your industry niche’s growth or decline in the near future.
Make Informed Guesses: Even with all the data in the world, it is impossible to have perfect information about the size of your total addressable market. Don’t worry – investors understand this. Your job is to make informed guesses based on as many verifiable data points as necessary for a confident estimate.
6. Marketing Strategies
Now that investors know about your company, products, services and target audience, it is time to inform them on your proposed marketing strategies and plans. This will differ depending on the industry you are in, so be sure to choose a strategy that you have researched and are confident in.
For example, if you plan on advertising on TikTok, you may want to include data on why Tik Tok is a leading platform for your target audience. You should also be sure to provide examples of successful Tik Tok marketing campaigns from similar brands in your industry.
7. Logistics & Operations Plan
Logistics and operations are what turn your business plan into a reality. As such, it is vital to provide information about the following factors that will contribute to the success of your business. Read on for some information about what to consider when outlining your logistics and operations plans.
Suppliers: Where do you plan to get raw materials for your products from?
Production: Will you be selling your own manufactured products, drop-shipping, wholesaling, or sourcing them from a local supplier?
Facilities: Do you have the staffing, facilities, and licences for the production and sale of your items?
Equipment: Do you have the equipment required to be up and running over the foreseeable future?
Inventory: How much product do you plan to keep on hand? Where will your inventory be stored?
Shipping and Fulfilment: Do you plan on handling shipping and fulfilment tasks in-house or will you use a third-party logistics partner?
8. Financial Projections
Last but not least, time is money, and providing detailed financial projections for your business is vital. Your financial projections will outline how your business plans to generate enough profit to repay the loan or how you will earn a decent return for investors. If you are an emerging business or start up, you may be lacking on this front. You can consult a financial advisor that specialises in business financial projections, or perhaps use quotes provided by your shipping, suppliers, and other business contacts to help develop a clearer understanding of your breakeven point.
If you are an existing business, you’ll want to provide your business’s monthly or quarterly sales, expenses and profit estimates over the last few years and future predictions, assuming you’ve obtained a new loan.
And there you have it – the 8 components of a fully flushed business plan. We hope that this article has given you the insight you need into curating a business plan that is guaranteed to impress investors and financiers alike.
What are some of your tried-and-tested tips for creating the perfect business plan? Be sure to leave a comment and let us know!
