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Major elements of a business plan

Accomplishments like those illustrate the importance of preparation for entrepreneurs starting or expanding their own businesses, especially since only half of all startups survive their first five years.

The secret: A well-crafted business plan can help make yours one of the success stories. Indeed, some of the most successful U. John D. His business expanded enough that it eventually controlled the majority of oil production in the U.

Although it was later broken up by the U. A further advantage of your roadmap is that, ideally, it changes with your business. They include:. A snapshot of your plan. If your company is a startupfocus on your background and experience as well as that of any partners to show the underpinnings of the company, the agency says. Explain what your company does and how it stands out from competitors. List major customers as well as markets you plan to target in the future.

Find out who your competitors are, analyze their cash flow and profit margins, and research technological developments in the industry that might be game-changers.

13 Key Components of a Business Plan

Part of describing your customers is a general awareness of how much they spend and when. For instance, Black Friday got its name because it kicks off the lucrative Christmas shopping season that moves many retailers into full-year profitability. Spell out the details of ownership, including investors and show your organizational chart. What do you sell, how will it help your customers, and how often will they need to replace it? The answers to those questions can be crucial factors in business sustainability.

Include any patents or copyrights you own. Are you going to rely on word of mouth, promotional discounts or advertising? Remember, your method will have to be tailored to your market. A critical point is how you plan to repay borrowed money to creditors if you opt for debt financing or, alternatively, generate returns for investors.

If you need funding, provide realistic forecasts that show how you plan to generate future cash flow. Michael Jones is the Director of Community Management and Content at Bond Street, a company focused on making small business loans simple, transparent and fair.

They include: 1. Executive Summary: A snapshot of your plan. Company Description: Explain what your company does and how it stands out from competitors.

Organization and Management: Spell out the details of ownership, including investors and show your organizational chart. Service or Product Line: What do you sell, how will it help your customers, and how often will they need to replace it? Financial Projections: If you need funding, provide realistic forecasts that show how you plan to generate future cash flow.

Michael Jones. This author does not have any more posts. Posted in Business. Leave a Reply Cancel reply.Now that you understand why you need a business plan and you've spent some time doing your homework gathering the information you need to create one, it's time to roll up your sleeves and get everything down on paper.

The following pages will describe in detail the seven essential sections of a business plan: what you should include, what you shouldn't include, how to work the numbers and additional resources you can turn to for help. With that in mind, jump right in. Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want.

This is very important.

8 Elements of a Successful Business Plan

All too often, what the business owner desires is buried on page eight. Clearly state what you're asking for in the summary.

The statement should be kept short and businesslike, probably no more than half a page. It could be longer, depending on how complicated the use of funds may be, but the summary of a business plan, like the summary of a loan application, is generally no longer than one page. Within that space, you'll need to provide a synopsis of your entire business plan. Key elements that should be included are:. When writing your statement of purpose, don't waste words. If the statement of purpose is eight pages, nobody's going to read it because it'll be very clear that the business, no matter what its merits, won't be a good investment because the principals are indecisive and don't really know what they want.

major elements of a business plan

Make it easy for the reader to realize at first glance both your needs and capabilities. The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.

Base all of your observations on reliable data and be sure to footnote sources of information as appropriate. This is important if you're seeking funding; the investor will want to know just how dependable your information is, and won't risk money on assumptions or conjecture. When describing your business, the first thing you need to concentrate on is its structure.

By structure we mean the type of operation, i. Also state whether the business is new or already established. In addition to structure, legal form should be reiterated once again.

Detail whether the business is a sole proprietorship, partnership or corporation, who its principals are, and what they will bring to the business.As is the case with most big projects, crafting a business plan is one of those things that takes an incredible amount of diligence and no shortage of courage.

If you approach this with a firm understanding of what key information to include in each section of your business plan and know how each section works together to form a cohesive, compelling, and — above all — persuasive whole, it will make the writing process a whole lot less daunting.

In the same way that a great movie trailer gives you a basic understanding of what the film is about while also enticing you to go check out the full-length feature, your Executive Summary serves as an overview of the main aspects of your company and business plan that you will discuss in greater length in the rest of your plan.

Outline the next objectives or milestones that you hope to meet and what it means for the growth of your company. The Company Synopsis section is where you provide readers with a more in-depth look at your company and what you have to offer. If you spend the majority of your time on any one part of your business plan, take the time to really nail this part.

If you can build an engaging story around the problem that your audience can relate to, it makes the payoff of your solution statement all the more powerful.

When considering how to position your problem in the context of your business plan, think to yourself: what is the single greatest problem my customers face? How do other solutions in the market fail to alleviate that problem, thus creating a major need for my product? Your goal here is to help illustrate:. Are there any examples of similar companies that investors have supported that you could point to? Are there any recent acquisitions examples of larger companies buying up companies similar to yours that could bolster the case for your own exit strategy?

You used your Company Synopsis section to cover why your new product delivers crazy value to your customers by breaking down the ways that it benefits your customers and meets a highly specific need for them. Not exactly. If your product or service has some sort of proprietary element or patent at the core of what makes it work, you might be a bit hesitant to show your hand for fear that someone might run off with your idea.

While this is a completely understandable concern, know that this pretty much never happens. That being said, you can still give your readers a clear idea of how your product or service works by explaining it through the lens of how it relates to the problems that your customers face without giving up your secret sauce. But showing investors you have even a cursory idea of how you will convert your product or service into sales is absolutely fundamental in lending credibility to your business plan.

Are you leveraging transaction-based revenue by collecting one-time payments from your customers? Are you generating service revenue based on the time spent providing service to your customers? Are you following a recurring revenue model selling advertising and monthly subscriptions for your mobile app?

What are your price points and why have you set them that way? How does your pricing compare with similar products or services in the market? Cost of goods sold, otherwise known as COGS, refers to the business expenses associated with selling your product or service, including any materials and labor costs that went into producing your product. Your margin refers to the profit percentage you end up with after you subtract out the costs for the goods or services being sold.

These essentially determine your ability to grow the business or achieve profitability. Often your Critical Costs mature over time, growing or shrinking. The first step is to isolate what those investment costs are. The second step is to explain how you expect those investments to pay off.

What can you do from an efficiency standpoint that no one else can?You may think this is normal for a first time entrepreneurial adventure.

But what if I told you that Carl has started many companies in his year tenure as an entrepreneur? And with all the companies Carl started, none of them have ever exceeded revenues of a million dollars. Many of them failed and Carl was forced to shut them down within the first year of business. What it means is Carl did not understand the purpose and the value in creating a business plan. And unfortunately this is pretty typical of many entrepreneurs.

They think flying by the seat of their pants and relying on their street smarts and intuition is the spirit behind entrepreneurship. This could not be further from the truth. Now I know what you are thinking. You are thinking that you and other entrepreneurs you know have never developed a business plan and you are doing "ok" - right?

Well, here is the big secret - you can always do better. I know for me -- "ok" simply is not good enough! And if you don't plan for growth you may grow, but chances are good you will not be able to sustain it.

Planning for growth is essential. According to Price-Waterhouse-Coopers, two-thirds of CEO's of fast growth organizations develop some type of business plan.

It is actually the exercise of drafting the business plan that is important -- sometimes more important than the plan itself. Writing a business plan forces you to focus on the important and essential elements of your business. It makes you think through your next steps and specific strategies and tactics. But most importantly it forces you to face the facts. Because the most important element in success is this:. I know so many entrepreneurs and business owners who make excuses for all the failures within their business.

Sadly so many of those failures could have been avoided with the construction of a business plan. The summary should tell the reader what you want. This is very important.

Clearly state what you're asking for in the summary. The statement should be kept short and businesslike.By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck. Writing a business plan is a big task, and no two business plans are alike. But most effective plans include the following major elements.

As you write your business plan, come back to this list of key components to make sure your plan is complete and thorough.

Company overview: Your mission, vision, values, products, unique attributes, and the business opportunity you plan to seize. Business environment: An analysis of your industry, your marketplace, your customers, your competition, and how you stack up. Company description: The capabilities that give you a unique advantage over your competitors — including your management, technology, operations, distribution, service, finances, and marketing.

Financial review: The state of your finances, including your income statement, balance sheet, cash flow statement, profit projection, and budget.

major elements of a business plan

Steven D. Peterson, PhD, is the senior partner and founder of the management tool development company, Strategic Play. Barbara Findlay Schenck is a nationally recognized marketing specialist and the author of several For Dummies books. Key Components of a Business Plan. About the Book Author Steven D.Anybody wanting to visit Sweden has to use Nordic Visitor as they are very knowledgeable and friendly to do business with.

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major elements of a business plan

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In the event of a fighter retiring on his stool between Rounds e. In the event of a Technical Decision before the end of the fight, all bets will be settled as a win by Decision.

How To Write a Business Plan To Start Your Own Business

For fights where a draw is not possible e. Prizefighter, the Draw or Technical Draw is not quoted. To Go the Distance - For settlement purposes the official designated number of rounds must be fully completed for bets to be settled as Yes. For settlement purposes a knockdown is defined as a fighter being KO'd or receiving a mandatory 8 count (anything deemed a slip by the referee will not count). The following minimum number of overs must be scheduled, and there must be an official result (Duckworth-Lewis counts) otherwise all bets are void, unless settlement of bets is already determined.

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major elements of a business plan

The over must be completed for bets to stand unless settlement is already determined. The following minimum number of overs must be scheduled, and there must be an official result (Duckworth - Lewis counts) otherwise all bets are void, unless settlement is already determined. Test and First Class Matches - The whole match counts. Prices will be offered on which team creates the most run-outs whilst fielding. If a match is abandoned due to outside interference then all bets will be void unless settlement is already determined.

If a match is reduced in overs and a match result is reached then the team who effected most run-outs whilst fielding regardless of the amount of overs bowled will be the winners. In matches determined by a Super-Over any run out during the Super-Over will not count for settlement purposes. In Test and First Class Matches all innings of the match will count.

Prices will be offered for the number of runs scored during the 1st innings of the match, regardless of which team bats first. The following minimum number of overs must be scheduled otherwise all bets are void, unless settlement is already determined.


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