Parts of a Business Plan

An effective business plan must contain certain key parts that narrate various aspects of your business’s goals. These parts are essential whether you are looking to start a new business or expand an old one. Here is a list of the key elements to include in your business plan along with the important points each part should cover:

1. Your Business Proposal

• What is the exact nature of your business?
• What do you sell, or what service(s) are you providing?
• Who is your customer?
• What plans do you have for growth?

2. Unique Selling Point

• How will the goods or services you are providing improve your customers’ life or pain points?

3. Market Analysis

• What is your target market?
• Who are your customers or target audience? What demographic are they a part of?
• Who are your competitors and what are their strengths/weaknesses?
• What will be your distribution method(s)?

4. Organizational Structure

• What are your organizational values and company culture?
• Is it a sole proprietorship, or do you have business partners?
• Who is running the business? Think about the following possible positions: owner, manager, assistant manager, and employees.

5. Human Resources Requirements

• Will you need employees or more employees? If so, how many?
• How will you recruit and maintain your employees?

6. Premises and Capital Goods

• What will you need in terms of space, goods, or technology?
• Will you need to manufacture something? If so, what is your plan to meet this need?
• Do you need to have office space, or will your business be conducted online?

7. Key Financial Data

• What is the status of your personal and business finances?
• What is your personal and business net worth?
• What is your credit history? Are you or the business holding a large amount of debt?
• What are your assets? Do you own a space to run your business?
• Do you have access to the necessary technology, equipment, etc.?
• Do you have enough cash flow? What is your cash forecast?
• If you are trying to expand your business, are you making a profit? What are your margins?
• How do you envision your financial projection for the next two years?
• Do you have a budget plan in place? If not, what is your estimated budget, and how do you infer it?

8. Legal Structure

• Are you the sole owner of the business, or is it a partnership?
• If it is a partnership, how will you split the profits? Is the split 50-50? 70-30? Who owns what percentage of the business?
• If you are trying to expand your business, what is the state of your taxes? Do you owe anything to the government?
• Is there anything in your business that would be proprietary? Do you own any patents?

9. Executive SummaryThis part is typically always at the beginning of a business plan, but you should write it after you have finished writing the detailed plan. In this section, you want to give a one or two-page summary of your plan so that the bank loan manager or investor can have a quick overview of your business. Moreover, a good executive summary can make all the difference and be the deciding factor of whether the bank or investors would like to know more about your pitch or not. So, make sure you include snippets of all the vital information about your business here.

What to Avoid When Writing a Business Plan

You would want to avoid certain things when writing a business plan as they can affect the direction of your bank/investor’s decision. That said, it is best to think of your business plan as a proposal rather than a solid plan when you are drafting it. You can always look at a sample business plan if, at any point, you can’t decide whether a piece of information is essential or delicate. To make things easier, here are the three most commonly included points in business plans that you should avoid:

• Being overly ambitious about your future projections: Remember, you want to be confident but realistic about how you see your business working out. If you ask for a loan amount more than you can pay back, you will more than likely fail at securing that loan. Multiple loan rejections will also affect your probability of getting another one more difficult.
• Masking financial difficulties: It is better to be upfront about your financial issues with your loan providers or investors, as it can be detrimental to your relationship if these issues come up later. If you are not upfront about any financial issues from the beginning, you risk losing your funding down the line and will be seen as untrustworthy. Presenting and accepting your genuine financial situation when writing a business plan is extremely important for the success of your business.
• Providing inadequate information: When looking at a business plan, investors or bank loan managers are looking for as much detail as they can get to make an informed decision. So, make sure there is little to no space for any possible answered questions. If you ignore this and too many questions arise about the details of your business, then it is highly likely that you will not get the funding you need, and you will need to start from scratch.

Business Plan Template

Here is a business plan template that you can use when starting a new business or expanding an existing one. Remember the information given above when filling out this template, and feel free to modify anything to suit your specific business plans. Company Name Business Plan EXECUTIVE SUMMARY Proposal: Mission Statement: Overview: FINANCIAL OVERVIEW Current Financial State: Projections: Assets: Liabilities: PRODUCTS/SERVICE Description of products or services: Pricing: Sales to date (if applicable): Sale projections: MARKET ANALYSIS Our Customers: The Competition: Marketing Strategy: COMPANY OVERVIEW Organizational Structure: Human Resource Requirements: Legal Information:

Business Plan Template for PDF & Word

Using a business plan template can ensure you do not forget any vital information required for investors or bank loan managers.

*Indeed provides these examples as a courtesy to users of this site. Please note that we are not your HR or legal adviser, and none of these documents reflect current labor or employment regulations.