Critical Sections of Your Business Plan

Don’t look at the ten sections of your business plan as something to endure; look at it as your chance to win over potential investors. Every section has a specific purpose.

Executive Summary: This is the “hook” of your business plan. In it, you should discuss your product, your market’s size and needs, and your company’s qualifications to meet those needs. Outstanding executive summaries entice investors to keep reading the rest of the plan.

Company Analysis: This is where you show off your company’s achievements. Use a timeline of your company’s successes to demonstrate that your company or executive team has a history of success and an edge over the competition, such as proprietary technology.

Industry Analysis: Show that you know your industry and any overlapping industries in which your company competes. Include industry data from reputable sources. Be certain to include niche trends and be specific.

Customer Analysis: Show how you plan to build relationships with your customers. Demonstrate that you thoroughly understand your customer, and that you know them better than anyone else. Include niche market statistics, demographics, psychographics, and other critical customer data.

Competitive Analysis: Demonstrate that you know your competition, which isn’t limited to public companies in your industry. Your true competition is any other product or service that can meet the same need you’re trying to meet, including things customers can do themselves. Lay out the strengths and weaknesses of your competition.

Marketing Plan: Marketing consists of the four P’s: product, price, promotions, and place. Explain your product or service, how you plan to promote your product or service, how you plan to price your product or service, and how you plan to get it to your customers. Provide details and specific investors want to see how you plan to reach customers.

Operations Plan: Outline how you plan to take care of your customers. Also outline your company’s day-to-day activities, i.e. short-term processes, and long-term processes. Include when you plan to release your product, projected revenue, partnerships, customer contracts, future funding rounds and IPO, and hiring. Your investors are looking for when they can expect a payout.

Management Team: Your executive team drives your company. Include biographies of your executive team and your Board of Directors. Be certain to highlight past achievements that show the ability to follow a plan and grow a company. You must have a complete management team before you submit a business plan.

Financial Plan: This section is where your investors will focus, as it shows how your business will potentially reward them financially. Your pro forma statements (future projections) must include market penetration rates with specific dates attached, your operating margins, your employee total, and any acquisitions, mergers, and IPOs. Keep your numbers realistic.

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Business Plan Appendix: This section is for overflow documents. Any claims you made throughout your plan should be backed up by data you place in this section. Include technical drawings, letters from partners, customer letters, patent information, competitor lists, and possibly key customers.

Peter

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