Business Plan Essentials

Every business must start with the strongest of documents: a solid business plan. A business plan is crucial to success because it lays the foundation for the businesses practices, procedures, vision for the future and financial sustainability. Any business that does not have a business plan is more likely to experience rocky and troubling times, versus a business that is ready for challenges with a good plan in place.

 

However, this question remains: what components make a good business plan? What does the plan need in order to function well? What are the key components?

 

There are many resources available to the budding entrepreneur in regards to business plans and their components. The business plan is something that is studied in schools and MBA programs. It is the subject of books and manuals and is offered in small business centers and agencies. The wealth of knowledge available in regards to its parts and sections are boundless. The resources presented here are not meant to offer new information. However, it is meant to pull some of those resources together and present them in an easy to understand, easily readable format.

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Patrick Hull of Forbes does an excellent job of presenting some of the essential components of any good business plan. I would encourage potential entrepreneurs to read the entire article but here are the 10 things that he believes every successful plan should have.

 

  • Mission statement and/or vision statement so you articulate what you’re trying to create;

  • Description of your company and product or service;

  • Description of how your product or service is different;

  • Market analysis that discusses the market you’re trying to enter, competitors, where you fit, and what type of market share you believe you can secure;

  • Description of your management team, including the experience of key team members and previous successes;

  • How you plan to market the product or service;

  • Analysis of your company’s strengths, weaknesses, opportunities, and threat, which will show that you’re realistic and have considered opportunities and challenges;

  • Develop a cash flow statement so you understand what your needs are now and will be in the future (a cash flow statement also can help you consider how cash flow could impact growth);

  • Revenue projections; and

  • Summary/conclusion that wraps everything together (this also could be an executive summary at the beginning of the plan).

Sourced from forbes.com

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In addition, Entrepreneur.com says that there are 7 major sections of a successful plan and that each one of these is a complex document in and of themselves. Their article goes into even more depth Forbes does. It is an excellent resource and one that I believe can be the basis for a very successful plan. You can read the entire article here.

Sourced from entrepreneur.com

When it comes down to it, it does not matter if one uses either of these articles or any of the other myriad of books and resources available. What is most important is that a thorough, in-depth plan is written before a business is launched. This will save unnecessary stress and will help solidify a more stable future for the business.