Main Components/Parts of a Business Plan

Various Components of a Business Plan
Various Components of a Business Plan

Let us discuss each of the components of a business plan in brief.

i.Summary: The first page of a business plan is summary. Summary should be concise and should cover all the essential details because the first page of a book only encourages a reader to continue reading the book. The summary should include the following points in brief:
  •  Company’s / Business’ description
  •  Company’s / Business’ objectives
  •  Company’s products/services
  •  Competitors and market profile
  •  A statement which defines why and how the business will succeed
  •  Projected growth for the company
  •  Key management team
  •  Funding requirements, time-line for the funds and how the funds will be used
ii. Vision: Vision statement and milestones is the second main component of a business plan. Vision statement should give a clear mental picture of the business/company owner about his business dream. Milestone should also be given to define the goal and the method to achieve the goal.

iii. Market and Competitive analysis: Market research data should be added to the business plan because investors like to invest money in a business which has a team with thorough knowledge of the market. Market analysis section involves:
  •  A general description of the market a company (businessman) is willing to enter.
  •  Changes in the market
  •  Different market segments
  •  Market segments and customers
  •  Customer characteristics and needs
  •  Customer buying decisions
Competitive analysis involves the detailed analysis of competitive strengths and weaknesses of you and your company. This section should explain:
  •  Industry overview
  •  Nature of the competition
  •  Industry changes
  •  Primary competitors
  •  Competitive products/services
  •  Opportunities
  •  Threats and risks
iv. Marketing Strategy: After doing market and competitive analysis the next step is to define the strategy which you will be using to target the market and distribute your products/services. This section should explain:
  •  Key competitive capabilities and weaknesses
  •  Strategy that will be used by you
  •  Implementation of the strategy
v. Products/Services: This section explains the products/services offered by your company or what do your company intend to offer. Provide details about the need of your product in the market. This section should contain:
  • Description of product/ services
  •  Positioning of product/services comparative to other competitors
  •  Future products/services, your company willing to offer Development of Business Plan
vi. Marketing and Sales: Marketing and sales section contains following points:
  •  Marketing Strategy that will be used by your company
  •  Sales tactics that will be used by your company to sell its products/services
  •  Advertising media that you will use to advertise your products/services like TV, newspaper, radio, hoardings, leaflets, handbills etc.
  •  Promotional campaigns, if any
  •  Publicity and trade shows, if any
vii. Operations: Operations involves the things required to implement the business idea. Operations section should explain:
  •  Human resources plan
  •  Delivery of product/services:
  •  Customer service
  •  Facilities provided by your company
viii. Financial Plans: Financial details should include the following points:
  •  Balance sheets – which indicates the owner’s equity and your financial position
  •  Profit and loss statement – alternatively known as income statement, indicates your company’s cash management
  •  Cash Flow statement – details all cash receipts and disbursements.
  •  Some key ratios for the projections that are made by you for the next few years

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