5 Top Elements of a Business Plan That Determines Success

Regardless of whether you are opening a small coffee shop around the corner of the neighborhood or planning to open an eco-friendly food utensils factory, you will have to understand how to write a business plan. Whilst industries are different and may not share exactly similar business plans, either small business or big business will more or less have the same elements of a business plan.

So what is a business plan and why is it important for you and your business? Is there any default business plan format you can just copy and use or do you need a professional to help you make it? Find out your answer by reading this article below.

What Is a Business Plan?

A business plan is an essential written document that provides an explanation and overview of one’s company’s future. You may have included a brief explanation of your business strategy as well as the key goals that will get you moving from your current starting point to the goals you have set from the beginning.

The business plan is an important part of a business, regardless of whether the scale is small, medium, or big business. There are usually some essential components of a business plan that should be included because it will help a business owner to lead their company to success.

Why Is it Important?

Have you ever wondered why the new coffee shop around your neighborhood that held its grand opening exactly one year ago suddenly closed down? Or do you just get info from the bank telling you that your loan request has been rejected despite the business having still been running smoothly and you have a good credit point?

The badly written business plan might be the culprit. A well-written business plan will give its owners clarity about the viability of their businesses and notify which parts of a business need to grow and prosper.

It also gives you an insight into what kind of resources you will be needed to nurture and grow your business, establish a clear timeline of when your company is expected to achieve the goal you set while determining the steps you should be taking to let your business expand into a new market and many more.

Read also: The Importance of Business Plan, Strengthen Yours Now!

In short, a business plan will help you navigate your business and lead them to the right path. Sometimes, we tend to forget our initial purpose of running a business hence the business plan is there to keep you on track and not walking too far away from your goals. Besides that, a great business plan will be beneficial for you to attract investors or approval for loan applications in the bank.

If this is your first time running a business and you are inexperienced in writing a business plan, you can always opt to download business plan sample and modify it to suit your business. Or, you can learn how to make the business plan on your own by including the important key elements of a business plan on your document. Scroll down to know more.

5 Elements of a Business Plan

Remember that a business plan is heavily related to the future of your business. It will help you to attract investors and gain financial autonomy to run your business. Hence, you should have included these few important elements of a business plan that will help potential investors, lenders, and partners to easily understand your company’s structure and goals:

Executive Summary

Highlight all the important points of what you intend to discuss in the rest of your planning. You can put the executive summary on the first page of your business plan although the Small Business Administration will often suggest business owners put this executive summary on the last page to recap the whole point of the business plan discussion.

Alas, you only have to keep in mind that your executive summary should be clear and concise while presenting all the main points in a formal tone. The purpose of this executive summary is to provide an overview of the information and objectives in the larger document. 

It should be able to stand alone and summarize the whole content of a business plan, including the essential information needed to be told, and conclude the point on the extensive parts of a business plan. 

A well-planned and well-written executive summary will be able to convey the purpose of your business plan and pique the interest of the reader’s curiosity so they can keep reading the whole body of your business plan. It should have been able to create value for the reader as a first impression. 

Before you begin writing the executive summary of your business plan, consider these few key points:

• Decide who is your target readers and what kind of information that will interest them more.
• Include the crucial information needed to support your objective.
• Conclude and make recommendations to the readers.
• Try to make your executive summary as impressive as possible while still serving the valuable information as it might be the only thing being read by the potential investors.

Read also: 8 Tips to Run Your Start Up Business, Increase Your Sales!

Company Description

Company descriptions will always appear on every sample business plan. It is the most important part where you can explain why investors, lenders, and future partners should be confident to choose your company among many others.

You will need to include key information about your business and goals, breaking down the strength value that your company has, the solution your company can offer to the market, as well as the competitive advantages that will give your business a chance to succeed.

Market Analysis

Convince your audience about your seriousness in running this certain business by making thorough research of the market you are going to enter. Substantiate the strength you have highlighted through your company descriptions with data and statistics that break down the current trends and themes of the industry.

Ensure that your market analysis succeeds in helping to visualize your target audience including their income, their buying behavior, what kind of service and goods they are looking for and wish to experience or had, as well as their personal preferences. 

Note that all of the numbers delivered on this certain page should be actual and valid. It also needs to portray how your company is going to be the answer that the market is looking for and how you can do better in the industry compared to other competitors.

Marketing Plan and Sales Strategy

After giving a visualization of your target audience, you should be able to describe how you are going to get your products (goods or services) to reach the target audience. Explain the approaching steps you are going to use along with how much budget you need to make the marketing strategy works.

Then after, describe how you will sell your product after it has successfully reached out to the target audiences. You can put in detail how many sales representatives you are going to recruit, how you are going to find your sales representative, and what strategy you will have to get them on board. On the sales strategy, you may also include how much is your expected sales target in numbers.

Read also: 10 Challenges in Online Business with Solutions to Cope with

The Request for Fundings and Financial Projections

Now if your business plan is aiming for financial aid and funding, you can explain the estimated amount you will need to set up your business along with your plan on how to use the capital given. Add a timeline to make it easier for your audience to decide whether or not investing in your business plan is worth their money.

Last but not least, break down your financial goals and expectations you have set based on the market research. Then, remember to report on your anticipated revenue for the first 12 months as well as annual projected earnings up to the fifth year of the business.

Conclusions

You have now understood how important it is to have a business plan before running your business as well as acknowledging what are the elements of a business plan that should be included in your paper.

Having an idea for running a business is a valuable thing but an idea won’t go anywhere without a solid plan and strong financial aid. Hence, make sure you have written your business plan as honestly and realistic as possible then project it to people who might be interested in joining your business.

Join Ginee Philippines!

If you are having a problem completing your market analysis or determining the most suitable marketing strategy for your business, Ginee is more than ready to help you out. Ginee is a multinational company known for its excellent ERP system. Up until today, this company has been entrusted by over 70,000 entrepreneurs across Southeast Asia to help them manage and level up their business one step ahead of others.

The advanced AI system and professional team in Ginee are a perfect combination that will help you analyze the market and create a marketing strategy and plan that are tailored for your business. Getting to know the demographics and shopping behavior of your potential consumer is no longer a nuisance with the help of Ginee.

If you happen to choose digital marketing to reach out to more consumers globally, Ginee Ads will help you to manage all of the advertisement accounts and monitor the ad’s performance in real-time while giving you a live report so you can evaluate your marketing strategy in the future.

Without further saying, just come visit the Ginee Philippines site and complete the free registration right away. You will be granted the chance to try all of Ginee’s amazing features for seven days free without any conditions. Change the game and be the lead in your industry alongside Ginee. Join Ginee Philippines FREE!