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Five Elements of a Good Business Plan
Are you a new entrepreneur who's eager to launch your business and embark on a new adventure? Or have you been operating your business for years and looking for some strategy changes? Whatever the case might be, you probably have heard about the importance of a business plan and the benefits that come with it. Depends on the type of business, business plans may vary. However, with years of experience working as small business loan brokers in Atlanta, we believe that there are five key elements to every good business plan. Check them out below.
Elements of a Good Business Plan
Executive Summary
Always begin your business plan with an executive summary. It's a snapshot into your venture, so if you're looking for funding or investments for your business, make sure that the executive summary is as compelling as possible. Your executive summary should comprise the following factors:
Mission statement
Brief description of your product or service
Founders, management team, number of employees, and location
Growth projection
Remember to keep this section concise - you can elaborate more on the mentioned factors further into the business plan. The ideal length of an executive summary is one page.
Market Analysis
A market analysis should be comprised of three components: industry analysis, target market analysis, and competitive analysis.
Industry Analysis
Take a deep dive into your industry and find out as much information about it as possible. What are the general characters of your industry? What are the industry trends that have been taking place in the past few years? Also, who are the major "players" in your industry? While you may not be in direct competition with them, it's good to keep up with these companies as they usually have great influences on the directions that your industry will head toward.
Target Market Analysis
This is the area that impacts your business on a daily basis. It's about knowing who your customers are. The more detailed you can be in describing your demographics, the more successful you'll be in targeting them.
Competitive Analysis
In this section, you'd want to focus on businesses that you consider as your direct competition. These are the businesses that have similar customer profiles as yours, so do your research and find out how they attract these customers, or what their unique selling points are. This type of information allows you to know where you stand in the market and what you can do better to gain a competitive edge and stay ahead of your competition. A SWOT analysis is ideal for this type of information.
Organization and Management
Outline the structure of your business and list out the people in charge of your business operation. Thoroughly describe the role of each person in the management team and how their experiences align with their responsibilities within the organization. Details of ownership should also be mentioned in this section of the business plan.
Sales and Marketing
This section is crucial to any business plan as sales and marketing are the main revenue-generators of your business. Below are some components that should be included:
Unique Selling Point/ Unique Value Proposition: Think about what sets you apart from your competition. Whether it's your top-notch customer service or your high-quality product, the key is to be able to provide a solution to a problem that exists within your niche.
Pricing Strategy: Whatever pricing strategies that you may opt for, make sure that they make financial sense and keep you competitive in the marketplace.
Distribution Plan: Think about how you will offer your products/services? Will it be in-store, online, or both? Will you involve third-party warehousing and distribution?
Financial Projections
If you are seeking investments, this section is probably the most important one. This is where you set your financial goals and forecast the financial growth of your business in the first five years. Specifically, with the first year, you'd want to break it down into quarters and clearly indicate the expected expenses and financial projections. If you've already been in business, make sure to include documents like income statements, balance sheets, cash flow statements, etc.
First Liberty - Your Top Small Business Loan Brokers
With years of experience in finance, we can't stress enough the importance of a business plan. It helps entrepreneurs make important decisions and envision the future of your business. Understanding that every business is different, we're here to help you perfect your business plan and potentially provide you withcreative financial solutions. We take the time to listen and find out exactly what is necessary to make your vision possible on your way to success.
