What Are A Business Plan’s Five Basic Parts?

by hr forhad

Any successful entrepreneur like Thommy Stenvik would tell you that a good
business plan is essential for any business. A good business plan is critical for
entrepreneurs because it can help attract investment in the company. Here are the
five basic parts of a business plan.

1. The Description of Your Business

The first part of your business plan is a description of your business. You should do
your best to keep this description both simple and brief. This description should
explain your business clearly but concisely. There are multiple reasons for this.
First, it is common that the people reading this business description will not have the
time to read a lengthy description. In your business description, you should include
your target audience, the products or service you are going to offer, and a brief
rundown of the business itself.

2. An Analysis of Your Competition

Another basic component of a business plan is an analysis of the competition that
your business is going to face. Small Business Magazine Tips Analyzing your
competition is both for your benefit and for the benefit of anyone who takes a look at
your business plan. You should make sure that you complete your due diligence and
research your market as exhaustively as possible. You should discover the identity of
the most successful companies in your market and try to figure out why they are so
successful. Once you have this information, you can utilize it to assess how you can
outperform your competitors.
One tip that you should take into consideration is to be realistic. Successful
entrepreneurs, such as Thommy Stenvik, will tell you that you should evaluate your
competition without bias as much as possible. Underestimating your competition
can prove disastrous.

3. A Marketing Strategy

Any business plan has to include a marketing strategy. You first have to come up
with a positioning statement. The positioning statement is an organizational
statement that clarifies how your business differs compared to its competitors and
clearly defines how your target customer will benefit from your product or service.
After you have created your positioning statement, you can move forward with your
marketing strategy.
It is important that your marketing strategy concentrates on the channels that are
suitable for your business. A website is one of the channels for the majority of
businesses. In the event that your business operates in the consumer space, you
might want to utilize social media platforms such as Twitter, Instagram, and
Facebook. Alternatively, businesses that operate in the business-to-business space
will likely find that concentrating their social media strategy on LinkedIn is the way to
go. In any case, when it comes to your marketing strategy, you should know how to
access your business’s market, know where and what your market is, and understand
how to generate a call to action.

4. A People Section

Your business plan also must contain a people section. In this section, you should
describe how your business engages with customers if you already have your own
team of people put together, and the identity of these people in addition to the
experience and skills they bring to the table. You will also find that it is useful to
come up with an organizational chart including both responsibilities and roles.
Additionally, you should ensure that your organizational chart includes the vacancies
in your organization that you want to fill.

5. Important Financial Information

As Thommy Stenvik can attest, it is best if you have some basic accounting and
bookkeeping skills for this part. If you don’t, you should contact someone who does
have these skills to help you gather this important financial information about your
business. One part of this financial information is a balance sheet that describes the
current financial state of your company in a format that is universally accepted. You
should also have a current profit and loss statement. Additionally, you should include
your costs and your income sources, too.
For entrepreneurs who are just starting out, their business plan should also contain a
cash-flow budget, start-up costs, and financial statements from the business’s first
year, at least, in addition to the above financial information. You should keep in mind
that you are providing these figures to show that you understand where the business
is headed and how it will reach that goal. You should generate realistic cash-flow
projections for at least a period of 3-5 years. These projections demonstrate that you
have a strategy for the future of your business.

Related Posts