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What are the essentials of a business plan?
I’m glad you asked.
Crafting a proper business plan for your idea is not for the faint of heart. In fact, the real work begins after you have that epiphany for your company or solution to a common problem.
For something as important as a business plan, it’s never recommended that you “just wing it.” Rather, we’ve identified the 3 key business plan essentials you’ll want to incorporate most as you start that first draft.
What is a business plan?
A business plan tells other people what you plan to do with your company and how you plan to do it, according to Entrepreneur.com. Basically, a business plan is a written description of your business’s future.
If you’re looking for investors or a loan from the bank, you’ll want to have a business plan at the ready. This will provide those making the decisions to determine whether your company is worth the risk. Therefore, the better job you do in compiling information as accurately as possible–and identifying the value you bring to the table–the better your chance of obtaining your requested funds.
Now, let’s take this opportunity to dissect GrowThink’s business plan guide, 10 Key Components of a Business Plan. We thought the following 3 aspects were essential in building out your own business plan.
Executive Summary
The Executive Summary is your pitch. No, not the elevator pitch you make at a business event. Instead, it gives very busy people a quick run-through what your company is all about.
You’ll want to include some important elements in your Executive Summary. Most notably, you need the problem statement to identify what exactly you’re going after. It drives me crazy when I see entrepreneurs unable to identify the core problem they are attempting to solve!
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Customer Analysis
The next crucial part of your business plan is the Customer Analysis you provide. You must know your target customer as well as you know yourself. In fact, you may even use yourself as your target customer.
You’ll want to get pretty specific in terms of “demographic and psychographic profiles,” according to Growthink. Here’s what we mean:
- Demographic: discuss the ages, genders, locations and income levels of your target audience.
- Psychographic: discuss your customers’ lifestyles, interests, opinions, attitudes and/or value.
These profiles are valuable as you pitch investors because they’ll want to know who will be buying your product or service. This also will aid in the crafting of your marketing and advertising plan.
Related: Most Important Ways to Market Your Business
Management Team
What have you done? That will be one of the questions you’ll likely get from a potential investor. You need to show them your team’s track record of success–and failure.
Why failure? Because there’s no greater lesson in the world for entrepreneurs. Failure provides clear (and subtle) life and business lessons.
You’ll also want to feature the management positions required to expand the business and make it a success. Plus, don’t forget to include the advisors and mentors who will be assisting you–and providing critical feedback along the way.
Related: Top 3 Reasons Teamwork Matters
Conclusion: Business Plan Essentials
The Executive Summary, Customer Analysis, and Management Team are the 3 key ingredients to get right in your business plan. Get an investor’s attention with the summary, show them who you’re serving and what problem you’re addressing for that audience, and bring it home with an awesome team.
Good luck as you start–and grow–your business. We’re here when you have more questions and concerns.