Pulling It Together: The Business Plan Elements

The structure of a business plan is not random: It has a logical progression of thought. The marketing plan comes after the information on your product or service, but before your implementation and financial information. As for the other parts, the order in which they appear in your plan depends upon the best way you feel you can communicate and sell your business concept.

Certain parts of a standard business plan might not apply to your business. But all plans should answer two basic questions:

• Is this a product or service that people will buy?

• Are you the right person to make your idea a success?

Organizing your plan in a way that answers these questions will determine how successful your plan will be in garnishing resources and support.

Let's look at the basic elements that make up a business plan:

• Your executive summary

• Your company mission and objectives

• An overview of your company

• A description of your product or service

• Your management team

• Your marketplace

• Your marketing strategy

• Your competition

• The risks and opportunities of your business

• Your implementation plan

• Your capital requirements

• Your financial plan

• Any supporting exhibits

The executive summary is probably the most important section of your plan. Why? Because it's the first thing that is read but the last thing you write. That's because it is a short summary of all the most important parts of your business planit's meant to sell your idea to the reader. If you can grab readers' interest, they will be more likely to read the details of your plan.

Because this is a summary, you have to wait until you've written all the parts of your business plan before you write the executive summary. But remember, an executive summary is just that: a summary, not a Foreword. In effect, it's your entire plan in a nutshell.

The sections of your plan that deal with your company itself are the company mission and objectives, the company overview, and the management team sections. The company mission and objective details your company mission and vision statements. It describes what your business will do and why. It also lays out a vision of your company and where it wants to be in the future. The company overview provides a description of your companystart-up, existing company, legal form, and so onand its goals and objectives. The management team section lists the key personnelexecutives and key management and staffthat you propose to use to manage and operate your company.

The focus of what you intend to sell and how you will sell it is in the product or service description section of your plan. Here, you describe not only what you intend to sell, but also what human needs it fulfills. In other words, this section describes your product and service in detail and explains your unique selling position. Hand in hand with your product or service description is an analysis of the marketplace you will sell within and the marketing strategy you will use to market your product or service. Finally, the section on distribution channels explains the distribution or sales channels you will use to sell your product.

A Pollyanna approach to a business plan will not garner much interest or support. Yes, there are opportunities now and in the future that will help your business succeed. But to ignore the risks is to invite disaster. There are companies in your marketplace that will compete with your business. Every business faces risks from them and those of the everyday operations of a company. Sections in your business plan on competition and risks and opportunities must list and deal with these.

A business plan is not only a selling document, but a planning one, too. It represents a roadmap that your company plans to follow to implement your business idea. That's the purpose of the implementation plan. This plan describes step by step how you plan to carry out your business plan.

The last few sections of your business plan deal with money and resources. They list the capital requirements you need to launch and operate your company to reach a break-even point, and they describe a financial plan that provides a proforma (or assumptions) of revenue, expenses, profit, and loss.

Finally, you can include supporting exhibits in your plan. This can include your company or competitor's brochures, proposed advertising and promotion materials, industry studies, maps and photos of locations, magazine pieces or other articles, lists of equipment owned or to be purchased, copies of leases and contracts, letters of support from future customers, and other materials that support the assumptions of your plan. This section also includes the resumes of your management team, board of directors, and advisors.