Detailed explanation of the elements of a business plan

There is no day when the business plan is finished because the business plan is a process of continuous improvement and is affected by many external factors, such as the economic environment and Regional influence. However, a general business plan will contain several major elements. In the following time, we will provide entrepreneurs with a detailed understanding of the business plan and help them on the road to financing.

Summary

The summary is the first part of your business plan and is the most important part of your business plan. As the name suggests, this part is an introduction to the entire business plan, the company's history, and an overview of the company's basic current situation. The summary is the face of the business plan, so in the summary you want to pique investors' interest in reading further. And you also need to tell investors why you think your company will be successful. Although the summary is the beginning of a business plan, it is often completed at the end. Because when you have the rest of the plan written, you can summarize it better.

Specifically, the summary includes the following content:

Mission statement: A mission statement is a brief overview of your company's business. It can be presented in two words, two sentences, or a paragraph, or even is a picture.

Date the company was founded

Introduction to the founders and their job responsibilities

Number of employees

Business location and any branches or subsidiaries

Description of the company’s equipment

Description of the company’s products or services

Banking relationships and existing investor information

Company development Milestones (such as the company doubling in size within one year of its establishment or the company being the first in the industry to provide a specific service)

If you have just started a business, some of the above content cannot be presented to investors, then you Just focus on your experience and professional background, and show your determination to start a business. You can describe the problems and solutions in the target market and tell investors about your innovations. Make sure your business is what consumers need, and then describe your vision for the company.

Perhaps you will meet an investor who requires your summary to be presented in the form of a table. At this time, the title of the content should be as broad as possible, in other words, avoid detailed descriptions.

Market analysis is the second part of the business plan. In this part, you need to describe the industry in which the company is located, and you also need to show the results of the market survey. However, the details of the market survey are placed in the business plan. in the attachment.

This part includes the following parts: industry overview, target market information, market research results and evaluation of competitors.

Industry Overview

Including a description of the original industry, the current industry scale and growth rate, industry characteristics and trends, and the industry’s main consumer groups

Determine market targets

When determining the target market, the biggest problem is to control the market within a reasonable range. Many startups make the mistake of thinking that they can sell their products to everyone. Such target market positioning often fails.

Market Testing

Remember, you only need to write the results of the test into the business plan, so you only need to focus on the results. The details of the test are in the attachment. Market testing includes potential customers, information and demonstrations for current customers, the importance of adapting to the needs of the target market, and at what price the market will accept your product or service.

Production preparation stage

The production preparation stage refers to the time between the customer placing an order and the order being completed, so when you are researching this part, you should specify your product or the preparation phase for a service to be put into production.

Competitor analysis

When doing competitor analysis, you need to determine the impact of your target market on your competitors based on product lines, market segments, and assessing the strengths and weaknesses of your competitors. importance, but also take into account the many factors that prevent you from entering the market.

To identify all competitors for all your products and services, know their market share, and estimate how soon new competitors will enter the market.

Competitors’ competitive advantages appear in many forms, but generally include the following points:

Ability to meet consumer needs

Occupy a larger market Share, high awareness among consumers

A good work record and reputation

Stable financial resources, abundant backup resources

Talents

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Your competitors’ weaknesses are in turn your company’s strengths. Therefore, when entering a field, you need to analyze the weaknesses of your competitors. For example, can they meet the needs of consumers? They do not have strong market penetration, their work records are not up to standard, and their resources are limited. Will they stay? Accommodate outstanding talents and so on. If you discover a competitor's weakness, discover the reasons for that weakness so you can avoid making the same mistakes.

If your target market is highly competitive, you will need to be prepared to overcome some obstacles, including:

High investment costs

The amount of money it takes to establish your business Time

Changing technology

Lack of talent

Customer resistance

Existing patents and trademarks you cannot infringe

The company profile is the third part of the business plan. This part also does not need to be described in detail. It consists of two parts: the nature of the company and the company's success factors.

When determining the nature of your company, list the market needs you need to meet. This includes a plan for how your products and services will meet customer needs. Finally, identify specific individuals or organizations that can meet these needs. .

Success factors include superior capabilities to meet customer needs, efficient methods to push products and services, outstanding talents or the company's core location, etc. All of the above are competitive advantages for the company.

Organization and Management

Organization and management is the fourth part of the business plan. This part includes: the company’s organizational structure, details of the company’s ownership, the company’s management team, and the board of directors

Who is doing what in the company, their background and the reasons for including them on the company's board of directors or calling them employees, what is their personality, it seems that these questions are completely unnecessary for a company with only one or two people, but investment People want to know who is managing the project they want to invest in, and the responsibilities of each department should be spelled out in the plan.

Organizational structure

A simple and effective way to work out your company's structure is to draw an organization chart with a narrative description. Once the organizational structure is determined, there is no room for change, so You should think about who is doing what in the company and who is running all the departments. Nothing is overlooked and nothing is done three or four times, which is important to investors.

Ownership information includes the legal structure of the company and the subsequent ownership involved. Have you ever merged a company? If so, is your company a C corporation or an S corporation? Which company you may have formed with Partnership, if so, is the partner a general relationship or a responsible shareholder? Maybe your company is a joint venture,

Important ownership information that should be included in your business plan includes:

Name of owner

Proportion of owner

Degree of participation in company affairs

Company ownership form, that is, common stock, preferred stock, general partner , Limited liability shareholders

Prominent equity equivalents, such as options, warrants, convertible debt

Common shares

Management overview

Experts agree that the capabilities of a company's management team and its performance record are important factors in a company's success. So let investors know the core people in your company and their backgrounds, and provide a team resume that includes the following information:

Name

Position

Main Responsibilities and authorities

Education level

Expertise

Past record

Corporate recognition

Social practice

Working hours in the company

Salary status

Among them, emphasis should be placed on quantifying achievements, such as managing a sales team of 10 people, managing a department of 15 people, and increasing income during the full half-year period. 15. Expand 2 sales outlets every year, increase customer service rating from 60 to 90, etc.

Also emphasize how the abilities of the people around you complement yours. If you are just starting a business, emphasize the role that the strengths of each person on the team play in the success of the company.

Board of Directors

The main benefit of a no-fee advisory board is that it can provide you with expert advice for free. A board of directors with famous and successful people in the industry can improve the company's performance. Reputation and Perception Management Experience.

If your company has a board of directors, you need to write the following information in the business plan:

Names of the board members

Positions on the board of directors

Participation in company affairs

Background

Contribution to the company

Marketing and sales management is the fifth part of the business plan , sales is the process of creating customers, and customers are the life of the company. First, you should determine your marketing strategy. There are many ways to develop a marketing strategy, which is part of your ongoing business, evaluation process, and company characteristics. But there are basic steps that can help you develop strategies to drive sales and maintain customer loyalty.

A complete marketing strategy should include four parts:

Market penetration strategy

Development strategy: This part includes internal strategies, such as how to increase your manpower Resources; acquisition strategy is to acquire another company; branch franchise strategy; horizontal strategy is to provide similar products to different customers; vertical strategy refers to the distribution chain strategy of providing the same products but at different levels

Distribution channel strategy: The selection of distribution channels should include original equipment manufacturers, inside sales teams, dealers and retailers.

Communication strategy: How do you plan to let consumers know about your product? Usually the following strategies are the most effective: promotion, advertising, public relations, personal selling and some leaflets.

After you have developed a complete marketing plan, it is time to formulate a sales strategy. This part can help you sell your products.

Sales strategy includes the following two important parts:

Sales force strategy: If you plan to build a sales team, do you plan to select from within or recruit independent sales representatives? The sales team's Number of people, what recruitment strategies will you use? How to train your sales team?

Sales activities: A good sales plan should be integrated into existing activities. First you need to identify potential customers and present them in table form to prioritize them. Secondly, determine the number of sales calls within a certain period of time, as well as the average number of calls for each business and the average cost of each sale.

Services or product lines are the sixth section of the business plan. In this section, describe your products or services and emphasize the benefits to potential and existing customers. For example, if you open a restaurant, don't tell your investors how many dishes your restaurant has, but tell them why your restaurant is so busy. Professional people are more willing to shop at stores that record customer preferences. .

Choose an industry in which you have obvious advantages, know the problems in your target market and the solutions provided by your product or service, and convince your investors which consumers will pay for your solution. List your company's services and products and develop a marketing plan. Provide information about suppliers, product availability and prices. And also explain new product information.

This section should include:

A detailed description of the product or service. The specific content includes the characteristics of the product or service, how the product meets customer needs, and how the product compares with competitors. advantages and product development stages.

Describe the product life cycle and any factors that affect the product cycle.

Copyright, Patent, and Trade Secret Information: This section should include documentation related to copyrights and patents as well as features of products that have not yet been copyrighted or patented. Finally, incorporate any relevant information into existing legal agreements, such as confidentiality or non-compete agreements.

Research and development activities that have been carried out or planned to be carried out ((Ramp; D)): This part includes any activities related to new product development, and write down your expectations for (Ramp; D) .

Financing requirements are the seventh part of the business plan. This is the part where you describe how much money you will need to start or expand your business. If necessary, describe several different financing scenarios, such as best-case and worst-case scenarios. But remember, you need to provide appropriate support to the financing department, such as financing statements.

Specifically, the financing needs should include the following: current financing needs, financing needs in the next five years, use of funds, and any long-term financial strategies that affect your financing. When you outline your current and future financing needs, be sure to describe the amount of funding, how long each financing will last, the type of funding you require, and the terms you apply.

For investors, how you use the funds you raise is very important, whether it is used for capital expenditures (expenditures for the acquisition, addition, improvement or life extension of fixed assets) or for working capital Or debt repayments or acquisitions? These should all be listed in this section.

Finally, be sure to list any strategic information that affects your future financial situation, such as whether your company is ready to go public, use debt to acquire it, plan to repay debt, and whether you plan to sell the company in the near future. This strategic information is very important to your investors because they have a direct impact on your company's ability to repay its debt.

The appendix is ??the last part of the business plan. This part of the content should not be placed in the main part of the business plan, because your plan is a communication tool, so many people will see your plan. But there are some contents that you don’t want everyone to see, but special envoys like investors need this part of the content as a basis for decision-making. Therefore, the appendix is ??also an important part of the business plan.

Appendices should include the following:

Credit records, both personal and company

Resumes of key individuals

Product pictures

Market research details

Relevant magazine articles and bibliographies

Licenses, permits or patents

Legal documents

Lease Attachments

Licenses

Contracts

Members of Business Advisors, including attorneys and accountants

Any copying of your business plan will constitute If it should be blocked, a record should be made. Also remember to include a disclaimer if you plan to raise capital. ;