BUSINESS PLAN
Here are some key components that make up a solid business plan
Executive Summary
The Executive Summary is a brief synopsis of the business plan, and highlights the critical points found within. The Executive Summary must illustrate the breadth of the market opportunity, the business and profitability model of the endeavour, and how the company's management team is distinctively qualified to see the project to fruition. The Executive Summary must be compelling, comprehendible, and approximately 2-4 pages.
Company Analysis: This section is a critical analysis of the company, its organization, products and services offered, and provides more detail on the company's unique abilities to service its target market.
Industry Analysis: This section analyses the arena in which the company will be competing. It should include detailed answers to essential market research questions such as:
What is the target market and its segments?
What are some market conditions for the particular industry?
What other industries do your company’s services compete?
Analysis of Customers: This section assesses the target market’s segments. In it, the company must make known the needs of its focus customers. The company must then illustrate how its products and services can match these needs of the potential clientele.
Analysis of Competition: This section lays out the competitive field of the company. It should identify the direct and indirect competitors. The competitors’ strengths and weaknesses are weighed and the findings should define your company's competitive advantages.
These first five sections of the business plan are crucial as we have to gain the interest of our Funder very quickly. These sections provide the background on the full business opportunity as well as the market research to back up the business' capabilities.
Full Business Plan
Marketing Plan: The marketing plan examines how your company intends to penetrate its target markets. Key components include the following:
An overlay of your company's potential strategic positioning
Detailed descriptions of the company's products and services and possible expansions of both
A detailed look into the method behind the branding and image properties of your company and the strategies to promote such brands
An in-depth look into your company’s promotional strategies
An overview of your company's pricing strategies
A description of current and potential strategic marketing partnerships/ alliances
Operations/Design and Development Plans: These sections detail the internal strategies for building the venture from concept to reality, and include answers to the following questions:
What functions will be required to run the business?
What milestones must be reached before the venture can be launched?
How will quality be controlled?
Management Team: The Management Team section demonstrates that the company has the required human resources to be successful. The business plan must answer questions including:
Who are the key management personnel and what are their backgrounds?
What management additions will be required to make the business a success?
Who are the other investors and/or shareholders, if any?
Who comprises the Board of Directors and/or Board of Advisors?
Who are the professional advisors (e.g., lawyer, accounting firm)?
Financial Plan: The Financial Plan involves the development of the company's revenue and profitability model. It includes detailed explanations of the key assumptions used in building the model, sensitivity analysis on key revenue and cost variables, and description of comparable valuations for existing companies with similar business models.
In addition, the financial plan assesses the amount of capital the firm needs, the proposed use of these funds, and the expected future earnings. It includes Projected Income Statements, Balance Sheets and Cash Flow Statements, broken out quarterly for the first two years, and annually for years 1-5. Importantly, all of the assumptions and projections in the financial plan must flow from and be supported by the descriptions and explanations offered in the other sections of the plan. The Financial Plan is where the entrepreneur communicates how he/she plans to "monetize" the overall vision for the new venture.
Appendix. The Appendix is used to support the rest of the business plan. Every business plan should have a full set of financial projections in the Appendix, with the summary of these financials in the Executive Summary and the Financial Plan. Other documentation that could appear in the Appendix includes technical drawings, partnership and/or customer letters, expanded competitor reviews and/or customer lists.