8 Essential Components of a Successful Business Plan
Today we are talking about the 8 components of creating a business plan. Starting a business is both exciting and challenging. You can design your own career, be your own boss, and pursue your passion. But, according to the Small Business Administration, only two-thirds of businesses survive at least two years. About half survive at least five years.
Want to know the secret to start off on the right foot? It’s a killer business plan. You need to define your strategy and tactics for establishing a business with a strong financial foundation.
Are you feeling unsure or overwhelmed about how to get started? Don’t worry. Momentum CFO can help. Let’s start by learning the 8 essential components of a killer business plan.
1 | Executive Summary
The Executive Summary is the first section of your business plan. It’s a concise and compelling summary of all the other sections of your plan. It’s the first content section of your business plan, but it should be the last thing you write. Make it short and sweet. Give the reader the big picture of what your business is all about.
2 | Business Description and Mission
Second, describe your business and its mission. Why are you starting the business? When will you launch it? What is your mission? Your vision? Describe your business goals. Make sure your goals are SMART: specific, measurable, achievable, realistic, and time bound.
Provide this information, along with facts about where your business is located, how it’s organized as a legal entity, and your contact information.
3 | Products and Services
Third, the Products and Services section is where you describe the products and/or services you’ll sell. What is their purpose? Why are they unique? How will you price them?
New business owners often initially set their prices by “gut feel”. They don’t do the research and analysis required to ensure that their pricing is profitable. Pricing analysis is complex. But, it’s also crucial to the success of your business. Engage an experienced CFO to develop a profitable pricing framework.
4 | Market Research and Competitive Analysis
Fourth, use the Market Research section to describe a problem or need exists in your industry and how your business addresses it. What are the key attributes of your ideal customer? Be specific. The more specific you are, the easier it will be to design a targeted marketing and sales strategy.
Analyze your main competitors. How long have they been in business? What is their market share? What advantages do they have over your business and vice versa?
5 | Marketing and Sales Strategy
Fifth, the Marketing and Sales Strategy section details your plan for acquiring new customers. New business owners are often overly optimistic about how many customers they can bring on in their first year. That’s why is vital to develop a comprehensive sales and marketing strategy.
In this section, describe your overall marketing strategy. Explain the specific tactics you’ll use to drive brand awareness and sales. How will you reach your target customers? What advertising and promotion channels will you use? Will you develop an awesome website? Ensure it’s optimized for search? Run social media marketing campaigns? Use print or online ads?
Think about this carefully. You need enough customers to have a viable business.
6 | Organization and Management
The Organization and Management section is up next. Provide information about yourself and your leadership team here. Lenders and investors want to be assured that leadership is competent.
Describe your education and experience. What are your notable achievements? Are you a member of relevant professional organizations? What makes you suited to run this business? Highlight your accomplishments. Next, do the same for other key leaders in your organization.
7 | Financials
The Financials section is an extremely important part of your business plan. How will you fund your business?
Some business owners “bootstrap”, putting their own money into the business. Others seek funds from friends and family. Business owners with larger capital requirements may seek angel or private equity investment. Still others will apply for small business or personal loans.
Are you seeking capital from outside sources? Know that lenders and investors will scrutinize the Financials section. It helps them decide whether to lend to you or invest in your business. Include schedules such as a profit and loss projection and a cash flow projection.
There are several important parts of the Financials section. Don’t have a financial background? Engage a CFO to help. It’s important to get this section right. You can’t run a profitable business without a detailed financial plan.
8 | Finishing Touches: Table of Contents and Appendix
The final subject in our 8 components of a business plan: include a Table of Contents at the beginning of your business plan. Add an Appendix section at the end. Next, include important supporting documents. These may include your financial projections, business licenses, the resumes of you and your leadership team, etc.
Final Thoughts
In conclusion, starting a new business is exciting! It takes careful planning to do it well. Momentum CFO’s startup planning and implementation services put you on the path to achieving long-term success.
Our Smart Start Strategy service includes a tailor-made road map for successfully starting your business. It covers:
- Smart Start checklist of crucial startup tasks
- One-on-one financial strategy sessions
- A comprehensive written business plan
- Financial projections for your first year in business
- Recommendations for financing your business
Ready to get started? Book a free consultation today!BOOK YOUR CONSULTATION
Be sure to check out our other resources for small business: https://momentumcfo.com/cfo-resources/embed/#?secret=DrIUkEHE8W
