Sections of a Business Plan
There are 8 primary sections of a business plan, as follows:
1. Executive Summary
2. Business Overview
3. Management Team
4. Operations Plan
5. Marketing Plan
6. Industry Analysis
7. Financial Plan
8. Risk
Executive Summary
It is important to note that while the Executive Summary is the first page of a business plan, it is written last. The executive summary is a broad, yet specific, recap of your entire business plan. The objective of the Executive Summary is to grab the readers attention to make them want to read more about your business.
The Executive Summary should include the following:
1. Business name and where it is located
2. The products or services
3. State your Mission and Vision
4. Specify the intention of your plan (seeking capital, establish strategy, etc.)
Business Overview
As implied, this section provides an overview of your business; the who, what, when, where, and how. You should answer the following questions:
- Who are you?
- Who are the major players of your business?
- What product or service are you offering?
- When?
- is this business already operation? if so, how long? etc.
- is this a new venture? When do you plan on getting it off the ground?
- Where are your operations?
- How will you operate?
Additionally, this section should include information on the following:
- Type of business (business legal formation - Corporation, LLC, Sole Proprietorship)
- History and nature of your business
- Financial highlights and growth projections (summarized)
- Short and Long-term business objectives
Management Team
This section should provide an outline of your organizational structure. Provide insight on who owns the company, the management team, and if your business is, or will be, a corporation mention the Board of Directors. It is important to note that you do not need to create, or provide, resumes or CV's. An overview of the primary leaders of your business, with background information that emphasizes their professional experience will be sufficient.
You will want to include the following:
- An org chart (the hierarchy of leadership with department managed)
- If it's a partnership ensure the percentages are noted, by owner
- discuss level of involvement of the partners as well
- If you have advisors mention them and the role they will play
Operations Plan
Your operations plan provides insight on how you will operate to implement your sales and marketing strategies. You'll want to address the 'obvious'; hours of operation, number of employees, where your facility is located, what strategic benefit exists based on facility location, etc.
The following should be in your operations plan:
- Business promotion strategy (answer the question, how will you draw customers and how will you gain a foothold in the market?)
- Your distribution and logistics plan/strategy
- Acquisition strategy (suppliers/vendors)
- Discuss operations from supplier to customer (A to Z)
Marketing Plan
There is a lot of information that goes into the marketing plan section of your business plan; you will want to do thorough research and convey that you have a solid understanding of your industry. This is so important because you can have the best product or service, but without a marketing approach to establish yourself and reach customers, that product or service won't be profitable.
A marketing plan should include the following:
- The benefit your product/service will provide to your customers
- Market segmentation (groups of customers identified by defined characteristics)
- Industry competing in to include the outlook
- Past/Present/Future data for the market you are competing in
- SWOT analysis (strengths, weaknesses, opportunities, threats)
- Identify competitors and how you will compete with them
Industry Analysis
An industry analysis conveys an in-depth overview of the industry you are competing in. Here you may refer to Porter's Five Forces model to complete a full evaluation of the industry. You will want to elaborate on your product or service and how you will differentiate yourself from competitors.
This section of your business plan should include:
- Industry description
- Size and attractiveness of the industry
- Industry trends
- Profit potential
- Your company's competitive position
Financial Plan
The financial plan of a business plan provides financial data on how your business has operated (if you're already in business). If you are a new start-up, you will have to do research on similar businesses that are already operating and make realistic estimates.
A financial plan should include:
- Pro Forma Balance Sheet
- Pro Forma Income Statement
- Pro Forma Statement of Cash Flows
Risk Section
Once you have completed your research you should be well aware of many risks that exist with your business and the industry/market you are entering. Here you should be able to identify these risks and come up with how you will mitigate them.
Visit Business Plan Examples for examples of each section of a business plan.