Business plans are important for every business startup. Entrepreneurs often spend time creating these documents, which often spell the difference between the success and failure of a venture. Business plans often serve as the framework of the startup and sets the realistic short-term and long-term goals of the company.
There are various ways to create a business plan. Most of the time, their format vary depending on the group of people who will utilize them. A business plan meant for the employees is usually different from a business plan for potential investors.
For instance, a business plan for investors or mentors would contain more detail as compared to the business plan for the personal use of the owner and his or her business partners. After all, it is expected for the latter to be more knowledgeable of the particulars of the company, therefore eliminating the need for a more detailed plan.
Despite the differences, it must be emphasized that all business plans have a lot of elements in common. Failure to include any of these ten important business plan component would mean disaster for they contribute to the overall effectiveness of the document:
- A mission and vision statement that highlights the goals and objectives of the company and its owner;
- A detailed description of the business startup and an introduction of the products or services that it offer;
- A detailed description of the products or services and a discussion on how the differ from the rest that are currently offered in the market;
- An analysis of the market in which the company would enter, including a detailed description of the possible competitors;
- A description of the key officials of the company, as well as the rest of the management team;
- A detailed discussion of the game plan on how to market the product or service and encourage potential customers;
- An analysis of the company’s strengths and weaknesses, including viable opportunities and challenges that could improve or affect its performance;
- A segment on the financial statement which will show the owner’s understanding of the cash flow of the business and its importance to the growth of the company;
- A description of the projected revenues of the business; and
- A summary to conclude the business plan
Including these things would ensure that the business plan would be effective in fulfilling its roles as the framework of the business. The owner may decide to include other information, depending on the people who will utilize the document.
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