1.02 – The Elements of an Advanced Business Plan
Business plans are as varied as the companies that compile them. Some run dozens of pages, while others barely fill a few sheets. This lesson introduces the basic components that you can adapt to create a plan that meets your needs.
Business Plan Contents from Beginning to End
Although business plans come in all sizes and formats, they typically share a similar framework. The following components, presented in the order they generally appear, are the elements you’ll choose from as you build your plan:
Table of Contents
This guide to key sections in your business plan is especially useful if your plan exceeds ten pages.
Executive Summary
A summary of key points in your business plan is important if your plan runs more than ten pages. Keep it clear, captivating, and brief – ideally, no more than two pages.
Business Overview
This section describes your company and the nature of your business. It may include your company’s mission and vision statements, descriptions of your values, your products or services, what makes your company unique, and the business opportunities you plan to seize.
Business Environment
This includes an analysis of your industry and market forces; a description of your direct and potential competitors; and a close look at your customers, including who they are, what they want, and how they buy products or services. It describes external factors that affect your business success.
Business Description
Include information about your management team, organizational structure, new or proprietary technology, products and services, business operations, and marketing potential.
Business Strategy
This is your road map to success. It combines information about your business environment, business model, goals and objectives, and resources, and then lays out your strategy for start-up, growth, or turnaround.
Marketing Plan
Describe your brand, value proposition, and how you plan to reach prospects, make sales, and develop a loyal clientele.
Financial Review
A detailed review of your current finances and future expectations. This typically includes financial statements, such as an income statement, balance sheet, and cash-flow statement.
Action Plan
Detail the steps involved in implementing your business plan, including the sequence of actions and how they align with your goals and objectives.
Appendices
Include detailed information that supports your business plan, such as analyses, reports, surveys, legal documents, product specifications, and spreadsheets that are relevant to a select few readers.
Business Plan FAQs
If you’re like most people launching the business-planning process, the following questions might be on your mind:
Do you really need to include all these sections?
No. Your business plan should include only what’s important to you and your company. If your plan is short or written mostly for your own purposes, you can skip the executive summary and table of contents. For a one-person business, you may not need to describe its organization unless you need help getting organized. However, for most businesses, the other sections are important. Putting your mission, vision, values, product offering, goals, and competitive advantages into words clarifies and strengthens your business ideas.
Do you really need to write it all down?
Yes. Creating a written plan forces you to think through issues that you may otherwise ignore. For example, writing your business plan commits you to how you’re going to make money, defines your customers and strategy for reaching them, analyzes your competition, lists opportunities and threats, and establishes a set of goals and objectives along with an action plan for achieving success. Having it all in writing allows for quick, easy, and frequent reference.
How long should your plan be?
As long as it needs to be – and not a single word longer. A business plan as thick as a novel doesn’t impress anyone and is likely to scare people off. Clear, straightforward, and to-the-point thinking impresses investors, clients, employees, and others who may read your plan. Don’t leave out anything important purely to keep it brief, but condense each section to its most important points. Even comprehensive plans usually fit on 20 to 30 pages, plus appendices. Most 100-page business plans are about 75 pages too long.
By following these guidelines, you can create a well-organized, thorough, and concise business plan that effectively communicates your business goals and strategies
