The 10 Most Important Elements of a Business Plan

Before you get out and look for new customers for your business, you'll want to create a winning business plan that will impress lenders and investors. Your business plan needs to be thorough and it must discuss what makes your company stands out from competitors in your industry. Here are 10 of the most important elements of your business plan.

1. Executive Summary

This would be your business's elevator pitch to lenders and investors. You should use the executive summary to explain your brand, its mission, and why you believe the company offers the best services to customers. After you write a description of your company, you need to talk about your management team and administrative members and what their roles will be. The summary should then talk about your business's projected income and expenses.

2. Market Analysis

The next vital aspect of your business plan will be a market analysis of your company. You'll need to prove the demand and effectiveness of your products and services with evidence backed by the latest data. Show that you researched the industry and that you know what your competitors already offer your target customers. The analysis should include a detailed profile of your target customers and what their habits are. Finally, talk about how you can offer certain services better than your competitors as well as how you will do it.

3. Description Of Services And Products

When you prepare your business plan, there needs to be a description of services and products. Discuss the detailed ways in which your products and services will meet target customers' needs. Talk about why customers should choose your services over your competitors.

4. Talk Financials To Them

Investors and lenders want to know the financials of your company. If you've been operating for a few months or at least a year, you'll want to include a profit and loss statement. This statement must have your company's revenue, expenses, cost of goods and services, and operational costs. Also list depreciation and any earnings before taxes.

Also, include a balance sheet as part of the financials in your business plan. The balance sheet will have current and fixed assets. Mention any liabilities on the balance sheet. You'll also want to include a cash flow statement that has the amount of money coming in and going out of your business.

5. Competitive Analysis

Another crucial aspect of a business plan is a competitive analysis. This is a detailed overview of what your competitors are doing in your industry. It shows lenders and investors how valuable your business is when compared to your competitors.

6. Your Marketing Strategy

Every new business needs to promote itself, and your business plan must have a marketing strategy. What is your marketing budget? Which channels will you use to promote your business? Will you offer discounts on paid memberships or other promotional offers? Will you use direct mail marketing?

7. Operating Plan

Now you need to discuss your operating plan with lenders and investors. Discuss all logistics of your business such as where you will obtain the supplies, equipment and other tools to create the products. How will you save money on business expenses without sacrificing the quality of products and services?

8. Funding Requests

This is the section where you request funding from the lender or investor. In the request, you will discuss your specific funding needs and how you will use those funds for your business. This provides the transparency that lenders or investors need regarding how the funds will be spent.

9. Future Business Goals

As a business owner, you should always have a forward-thinking attitude regarding the direction of your business. The business plan needs to include your future goals for the company and how those goals match your overall vision for the business. Mention the timeline for reaching these goals and how you will evaluate progress along the way.

10. Discuss Your Team's Contributions

Finally, you should talk about your team members and the specific roles they play in the success of your company. What qualifications and experiences do the team members have that give them the ability to fulfill the roles you set for them?

With a well-crafted and organized business plan, it makes it easier to court lenders or investors for funding.