Although many entrepreneurs have great business ideas, they are often left stagnant because the individual does not know how to begin. A solid and effective business plan should provide all the information needed for an investor to be sold on the potential business idea. Below are the key sections of an effective business plan.
Executive Summary
This portion of the business plan is an introduction and will give the basic framework or outline of the company in a few words. Think of this as the elevator pitch. Include employees, founders, and owners where applicable.
Company Description
Go into a little more depth about what the company does, including products or services that it trades. This is the time to make the business shine. Explain what it does and why.
Market Analysis
Include a synopsis of the competition as well as the current market analysis for the industry. This will include demographic information about where the business will operate and who else does a similar business in that area. Explain what sets this business apart from the competition.
Organization and Management
Every company and organization needs an effective organizational chart. This section should include the growth plan and a responsible management system. While this may not seem important for an investor to consider, it actually shows whether a company is likely to enjoy longevity in the marketplace.
Product or Service
This part of the business plan will detail exactly what the product or service is about. This is not a sales pitch, but should paint the product or service in the most positive viewpoint.
Marketing and Sales
What is the plan to market the good or service? Explain in detail what marketing systems will be used and include an outline for anticipated sales leads and execution of those leads.
Funding Request
This section will be adjusted for banks, private lenders, investors, and grant donors. Explain what you are asking for, why, and how it will be used.
Financial Projections
Where will the company be in one year? Five years? Explain in rational detail with supporting figures and sources how and when this company will turn a profit.
Appendix
This section is very short and just pulls everything together into an organized cross reference of information.