4 Key Sections of a Business Plan

Strategy Plan One

January 25, 2012 

When considering business plan development, there are 4 key sections or components to business plans:

 

1.       Business Plan

 

Your first emphasis should be on the content / body of the business plan.  This section of the full document contains the descriptive body of the business or venture.  As you develop this, add in content from research, outside consultations, and your own views, opinions and information.  Keep in mind to write this as objectively as possible, rather than your own biased, subjective views.  It may be easier to write each section separately to begin with.  Later link the sections together.

 

To make the business plan stronger, research all elements thoroughly before writing.  Sources of information include info from successful business people, the internet, library, local business development agencies or business advocacy group, competitors, industry expects, or consultants.  Strengthen your business plan by quoting your source of information.  In a logic sense, you should support any outlining assumptions with factual information.  Use clear and plain language that your reader will understand and will grab his/her attention.  As you work on sections of the business plan, write out ideas completely and clearly, otherwise you may get lost, loose direction or focus.

 

In your own process, you should write drafts first, then edit for a final product.  For the final draft, ensure the product in smooth and error free.  An error-filled document shows incompetence or unprofessional work.  Proof read to eliminate errors, typos, of confusing grammar.

 

2.       Financials (In pro-forma format)

 

The four essential financial documents:

–          12 month cash flow projection

–          3 year cash flow projection

–          3 year projected balance sheet

–          3 year projected income statement

Funding agencies, investors and lenders will need these documents to base a funding or investment decision on.  These documents will demonstrate if a project is projected to be viable, profitable, and/or meet financial goals.  Financial ratios and indicators are important financial measurements of the business.

 

3.       Executive Summary

 

The executive summary is the upfront section of the business plan that highlights key features of your business.  This section summarizes the body and financial sections of the business plan.  It is the first section of a competed business plan intended to grab the attention of the reader.  It should summarize sections in bold, colorful, and brief wording.  Usually a page or two, the executive summary will highlight the merits and benefits of your business or project.

 

4.       Appendices

 

The appendices contain the supporting documents, such as resumes, certificates, diplomas, letters of reference, equipment and supplies quotes, letters of intent, partnership agreements, Articles of Incorporation, maps, photos, product/service samples, and other documents that will support your business plan.  Organize this section, labeling each appendix.  Make references in your business plan to the specific appendix.

Financial funding agencies and, commercial lending institutions want to ensure that you are actively involved in the business planning process, especially if you acquire the assistance of a professional or consultant to help you develop a business plan.  You should fully understand the business plan and its implications as a guiding tool for you.  As a final note, business owners who develop and write business plans have a better chance of succeeding than those individuals who did not.

 

Strategy Plan One

© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur

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