9 Elements and components of a business plan
The elements and components of a business plan are necessary tools or guidelines. Before starting a business, a good businessman should be equipped with these tools or guidelines. A good business plan is the blueprint or vision of the company. The elements and components of a business plan are also very important, no matter what challenges and crises your business faces in the future; in the face of adversity, it will not waver or panic. Why these components are important in a business plan?
The elements and components of the business plan enable business partners to adapt to the times as smoothly as possible, even under the impact of competition and emerging businesses and emerging markets.
The executive summary outlines the key parts of the plan, such as the company’s mission and vision, brand image, target market, products and services, competition, marketing strategy, and financial aspects. A good executive summary is attractive and concise, with only the first two pages persuading the reader to read the entire business plan. In fact, your executive summary is the main factor in determining whether your business plan will be read or dumped in the trash.
Company description provides your company’s overview, history, driving factors, working principles, and operating methods. This is the company’s mission statement, which is said to be concise and straightforward to explain its business purpose.
The targeted market is components of a business plan
A detailed description of the target market section; your company’s customers, brands, and products. This identification of the target market will greatly affect the company’s other businesses, such as marketing, manufacturing, etc.
The specificity of the market profile is very important because the company’s success depends to a large extent on identifying and meeting the needs of the target market. At this time, it is very important to answer the following questions:
- Who are the company’s customers?
- What is the value the company gives to customers?
- How can the company help customers realize such value?
Another important element of a good business plan is competitive analysis. To write a good business plan and successfully start your startup, you must determine the competition of the business. This is beyond the profile of these competing companies and brands. It should also include their advantages and disadvantages.
This is where SWOT analysis is need. It is important to clearly understand the challenges faced by the company so as not to be complacent. This section should be able to identify primary and secondary competitions, the differences between their value propositions and your company’s own value propositions, and the company’s competitive advantages and disadvantages.
Marketing strategy is components of a business plan
Your marketing strategy is another component of the business plan that addresses the five marketing options; this is a product, price, people, location, and promotion. Your company may have a good product but without an effective marketing strategy, everything is in vain. To develop a good marketing strategy and plan, you need to answer the following questions:
- What are you selling?
- How much does it cost?
- What is the target market?
- How will the product be distributed?
- How does the target market know and be lured to buy the product?
Another part of elements and components of the business plan is the Operations part, which describes the workflow of the business. It may not be specified in the business plan, but it should have a structured view of the company’s workflow.
Management and organizational structure
Management and organization Determine the organizational structure of your company, including key managers. This part is very important, especially when it comes to seeking funding because investors will be interested in the background of the company’s management team and the corresponding salary scale.
long term plan
Long-term development is another important part of a business plan. It shows in detail your company’s long-term plan, considering its future profits and growth. It provides a timeline for these plans and sensitivity or risk factors. This part of the plan provides a visual chart of the business situation for one, three, five years or more from now.
Finally, if there is no financial plan, the elements and components of the business plan will not be complete. This part clearly understands the company’s financial forecasts for the first few years. This part includes income statement, expected profit, cash flow analysis, and breakeven analysis.
In short, I hope you understand that one of the potential factors in creating a strong business plan is your ” precise or specific ” details. Investors are busy people, so respect their time and hold their heads, but make sure not to overlook important details or information.