Saturday, August 21, 2010
By Emma Collins
Creating a sound business plan is very important for both new and established businesses. If you are starting up a business, you will need to submit an impressive business plan to get the financing you need from lenders. On the other hand, if you are the owner of an established business, you need to update your plan regularly as it will serve as your guide in making important decisions for your growing business.
What are the contents of a business plan and how long should it be? The length of your plan will depend on the nature of your business. A typical plan can be five to ten pages including the following elements: Executive Summary, Company Description, Product or Service Description, Market Analysis, Strategy and Implementation, Management Team and Financial Plan.
You can follow the standard outline but the details you will include for each heading will depend on the type of you business you run. Let's define each element that you should include in your plan:
Executive Summary. The executive summary should explain the highlights or main points of your plan. This will be the first page of your plan so be sure to make your statements compelling. You can write the executive summary after you have completed all the other pages of your plan.
Company Description. Describe the legal entity of your business, your mission statement, and the history and background of your company.
Product or Service. What kind of products and services do you want to sell in the market? What is your purpose for choosing that/those particular product/s or service/s?
Market Analysis. Based on your marketing research, is there a demand for your chosen products and services in the market? Who is your target market? Be sure to include the demography of your defined market. What marketing strategies do you plan to execute?
Strategy and Implementation. This is the part of your plan where you should discuss how you plan to take on management tasks. Enumerate the steps you intend to do to achieve your short term and long term goals.
Management Team. If your business is Partnership, Corporation or LLC, who are the members of the management team? What are their specific roles and responsibilities?
Financial Analysis. Your financial analysis must include your previous accounts reports, financial projections, your plans on how to manage your cash flow, and how you plan to utilize the loan, if you are applying for one.
Preparing Your Business Plan
An effective plan is not necessarily a lengthy one. However, it needs to present a detailed, complete and accurate report about your business. Be sure to clearly define your objectives and goals. You do not have to include unimportant details but be sure you don't omit the essential facts.