What is the purpose of writing a business plan — and not just any old business plan, but a great one? This document conveys to the world everything they need to know to get behind your company, whether you’re trying to secure funding or convince employees to join your team. This blog will be about Elements of a Solid Business Plan.
Your business plan contains the most vital information about performance — past, present and future — people need to understand your company. And, as we know, understanding it is the first step toward supporting it.
Here we’ve broken down the overall business plan into three key parts, which we consider the essential elements of any solid business plan.
Part 1: Executive Summary
The first one or two pages of your business plan, called the executive summary, should be able to stand alone as an abbreviated version of the full-length plan. Why is it important to nail the executive summary? Because people reading your business plan are probably quite busy; they might only have time to read a few pages.
Think about people pitching their business ideas on the program “Shark Tank.” They don’t have an hour to explain every detail of their business. Rather, they must try to get investment by covering key points. The executive summary provides a quick but comprehensive view of what your business is all about.
According to NerdWallet, an executive summary should contain:
- Your company’s unique selling proposition
- An overview of your company, including its story and staff
- An analysis of the market in which you compete
- Your company’s product/service offerings
- Past and present financials, plus future projections
- Goals for the future
Remember, you’re going to get more space to elaborate on these points in the rest of the business plan. So, you want to keep this section very short, sweet and to-the-point.
Part 2: Body of Business Plan
The body of the business plan contains all the aforementioned sections but packed with more information. This will allow you to go into detail on topics you may not have been able to fit into the executive summary, like information on your competitors, target customer base, pricing strategy, marketing efforts, day-to-day operations, staffing, order fulfillment and much more.
The body of your business plan can also support a more robust breakdown of financials, like two to four years’ worth of forecasted income and cashflow.
Thankfully there are lots of sample business plans and templates out there to help guide you through the process of writing your own. Just remember to tailor these suggestions to your company’s specific needs and circumstances depending on your objectives.
Part 3: Appendix
The final component of a thorough business plan is the appendix, which goes at the end. The appendix contains supporting documents that are important to offer up to readers but too bulky to include in the executive summary or main body of the plan.
According to the U.S. Small Business Administration, some common types of information found in the appendix of business plans include: photographs, legal documents, licensure, resumes/reference letters and more.
Make sure to tell readers of your business plan when they can find supplementary materials in the appendix — an easy way to do this is by including a statement like “A copy of Permit XYZ may be found in the Appendix.” Depending on how much time and interest they have, they may want to skip to the end right away to view the supporting document or they may want to keep reading and save the appendix for later.
Ensuring your business plan contains these key elements will help you create a document that is well-rounded and informative for readers.
