Business Plan
The business plan is the roadmap for any enterprise whether for-profit or not-for-profit. It describes the purpose for the enterprise, the vision for the enterprise, and the steps needed to achieve success.
It clearly defines how the vision for the enterprise will be accomplished. Although a business plan is generally considered essential for success, many enterprises are started without a plan. However, the creation of a business plan brings discipline to your thinking and helps to bring the business concept into focus.
Business plans are typically created in four instances: 1) When an entity is forming; (2) when an entity is looking for funding/capital; (3) when an entity is defining itself or planning for growth and development; and (4) when an entity wants to create a system of regular business review and course correction.
Each business plan will be different depending on whether you are targeting business “outsiders” or “insiders.” For example, if you are looking for debt financing, the plan will be constructed differently than if an organization is looking for equity financing. However, there are certain elements of a business plan that should be in any plan. These include: (1) the executive summary; (2) the profile of the company; (3) the competitive landscape and market opportunity; (4) the operations plan and development strategies; (5) the management team and structure; and (6) the financials.
The executive summary briefly provides an overview of the complete business plan. It should clearly communicate what the plan says in one to three pages. If the summary is compelling, a reviewer of your plan is more likely to go to the detailed sections of your plan to find more information. A good rule of thumb is to create the executive summary last. Complete each section and then use the most relevant and persuasive parts of each section to build the executive summary.
The profile of the enterprise describes what the enterprise does. More specifically, this section includes a description of products and/or services, the business’ mission and vision, its long-term goals, its background, and its values.
The competitive landscape and market opportunity section should provide the case for success. The competitive landscape description lays out a comprehensive picture of the competition. Competitors will be both direct (i.e., those who offer similar products/services) or indirect (i.e., those who could offer similar product/services but have not yet). The market opportunity description should define how your entity will create a unique position within the competitive landscape. To do this, many plans also highlight the critical success factors needed to differentiate the business from its competition.
The operations plan and development strategies component of the plan lays out the business model for the organization. It defines how products are sold, how customers are acquired, how business processes work, etc. This section should also define the tactical steps needed to move the business forward.
The management structure provides an overview of the key personnel required to operate the entity, and defines their roles in managing the business.
The financial section usually highlights the key financial indicators in the entity’s balance sheet, income statement, and cash flow statements. Many times this also includes financial projections.
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