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Parts of a Business Plan

Whether you are starting a pizza shop or a plumbing business, a flower shop or a factory, you need a solid plan. In fact, your Business Plan will be an essential tool throughout the life of your business – from starting out to cashing in. It will help you to start out on the right foot, stay focused, get financing, manage your growth, and more.

Not every Business Plan will be the exactly same, but every Plan should incorporate several key elements.

The Parts of the Plan

Here are the key pieces to a solid Business Plan.

Title page

  • The title, or heading, of the plan, and very brief description of the business.
  • The date
  • The name of the owner
  • The company name and location
  • A copyright or confidentiality notice

Table of Contents

  • A list of the individual sections and their page numbers, starting with the Title Page and ending with a section for Special Materials (references, etc.).

Summary/Overview

  • A brief, but focused statement (a few sentences or paragraphs) stating why the business will be successful. This is the most important piece of a Business Plan because it brings everything together.

Market Analysis

  • Identifies specific knowledge about the business and its industry, and the market (or customers) it serves.
  • An analysis that identifies and assesses the competition.

Description of the Company

  • A close look at how the different components of the business fit together, such as:
    • Information about the nature of the business and the factors that should make it successful .
    • Special business skills and talents that provide the business with a competitive advantage, such as a unique ability to satisfy specific customer needs, special methods of delivering a product or service, and so on.

Organization & Management

  • The company’s organizational and legal structure, Is it a sole proprietorship? A partnership? A corporation? (See: “Ownership Structures“)
  • Profiles of the ownership and management team: What is their background, experience and responsibilities?

Marketing & Sales

  • The company’s process of identifying and creating a customer base. (See: “Market Research“)

Description of Product or Service

  • A detailed description of the product or service – from the customer’s point of view:
    • How they will benefit from the product or service?
    • Specific needs or problems that the business can satisfy or solve, focusing especially on areas where the business has the strongest skills or advantages.

Funding

  • The amount of current and future funding needed to start or expand the business. Includes the time period that each amount will cover, the type of funding for each (i.e., equity, debt), and the proposed or requested repayment terms.
  • How the funds will be used: For equipment and materials? Everyday working capital? Paying off debt?

Financials

  • Explains or projects how the company is expected to perform financially over the next several years. (Sometimes called a “pro-forma projection.”)  Because investors and lenders look closely at this projection as a measure of your company’s growth potential, professional input is strongly recommended.

Appendix

  • Provides specific information that certain individuals (such as creditors) may want review. It allows the addition and/or deletion of information as needed, such as:
    • Credit histories (personal & business)
    • Resumes of key personnel and partners
    • Letters of reference
    • Details of market studies
    • Copies of licenses, permits, patents, leases, contracts, etc.
    • A list of business consultants, attorneys, accountants, etc.

These are just the basic essentials to creating a Business Plan. Each plan should be tailored to the specific business. (See: Business Plan Assistance)