A business plan is a written summary and guide to starting and running a business. A well-written plan creates a blueprint for success and can help entrepreneurs obtain financing, create strategic plans, follow marketing and sales plans. For many people, a business plan is the first step in the process of deciding whether to start a business – determining if the plan “fails on paper” first can help prospective business owners avoid costly investments.
A good business plan:
- Requires objective analysis and critical thinking – what seemed like a good idea can, under mature reflection, be exposed as a business lacking viability due to excess competition, a lack of sufficient funding, etc.
- Serves as a guide to operations for the first months and even years, creating a management blueprint.
- Communicates the company’s purpose and vision, management responsibilities, personnel requirements, marketing plans, and competitive environment.
- Creates the foundation of a financing proposal for investors, lenders, etc.
While each business plan is unique, all business plans share a few common elements. The following are some of the key components of a well-crafted business plan.
Executive Summary
The Executive Summary (sometimes called a Vision Statement) is a brief outline of the company’s purpose and goals. While it can be tough to fit on one or two pages, a good summary includes:
- Brief description of products and services
- Business objectives
- The market space the business will inhabit
- Justification for viability (including a brief look at competition and competitive advantage)
- Growth potential
- Funding requirements
For many people, the Executive Summary is the make-or-break section of a business plan. Companies solve customer’s problems; if the Summary cannot clearly describe how the business will solve a particular problem – and profit by doing so – in one or two pages, then it is very possible the opportunity does not exist… or the plan to take advantage of the opportunity has not been well developed.
In effect, an Executive Summary is where the sizzle must meet the steak.
***Note to readers: This is a four part series, wherein we will highlight every aspect of business plan ***
