Business Plan Concepts

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  • Executive summary

The executive summary, or statement of purpose, succinctly encapsulates the business's reason for writing the business plan. It tells the reader what the business want and why, right up front.

The summary or statement should be no more than half a page in length and should touch on the following key elements:

  • Financial requirements state how much capital is needed for start-up or expansion, how it will be used and what collateral is available.
  • Business concept describes the business, its product, the market it serves and the business' competitive advantage.
  • Major achievements points out anything noteworthy, such as patents, prototypes, important contracts regarding product development, or results from test marketing that have been conducted.
  • Financial features include financial highlights, such as sales and profits.
  • Current business position furnishes relevant information about the company, its legal form of operation, when it was founded, the principal owners and key personnel.
  • Mission statement
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A mission statement is a key tool that can be as important as the business plan. It captures, in a few succinct sentences, the essence of the business's goals and the philosophies underlying them. Equally important, the mission statement signals what the business is all about to the customers, employees, suppliers and the community.

The mission statement reflects every facet of the business: the range and nature of the products the business offer, pricing, quality, service, marketplace position, growth potential, use of technology, and relationships with the customers, employees, suppliers, competitors and the community.

  • Company background

The company background, which follows the executive summary, more details history of the company. This will vary, depending on how the business is developing. History of a start-up is clearly different than an existing company.

Here are a few points that you should be sure to include in this section:

  • The origin of the idea for the business
  • The progress so far
  • Issues the business has faced so far
  • Short-term development plan

Overall, this section of the business plan should provide an investor is interested a better idea of ​​who you are and how this business idea came about. Again, keep it brief and avoid personal information not relevant

  • Product description

Description of business may be a few paragraphs to a few pages in length, depending on the complexity of the plan. If the plan is not too complicated, keep short business description, industry described in a paragraph, in a product, and the business and its success factors in two or three paragraphs better.

When describing business products or services, ensuring readers now have a clear idea about what was said about business. Explain how people use the product or service and talk about what makes a product or service different from others available on the market. Be specific about what the business placed outside the competition.

Then explain how the business will achieve a competitive advantage and why the business will be profitable. Describe the factors that businesses think that will make it successful. If the business plan will be used as a financial proposal, explain why additional equity or debt will make your business more profitable.

Other information to solve here is a description of the experience of other key people in the business. Anyone reading the business plan will want to know what vendor or business experts talked about the business and their reaction to the idea of ​​the business. They may even require businesses to clarify the choice of business location or reason for selling this particular product.

  • Marketing plan

A thorough market analysis will help businesses identify potential customers and help enterprises establish pricing, distribution and promotional strategies that will allow the company to be successful with competitors’ competition, both in the short and long term.

Start analyzing your market by identifying market in terms of size, demographics, structure, growth prospects, trends and sales potential. Next, determine how often the products or services will be purchased by the target market. Then seek out potential buyers annually. Then find out what percentage of this amount annually, or enterprises with or can achieve. Market share will be a benchmark for how your business is doing in light of market forecasts to plan.

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Businesses will also have to describe your positioning strategy. How companies differentiate a product or service from that of all competitors and then identify niche markets to fill is called "positioning". Positioning help establish the product or service in the eyes of the identity of the buyer. A positioning statement for a business plan is not a long or complicated, but it should be pointed out who the target market is.

How business prices of products or services may be an important marketing decisions possible. It is also one of the most difficult to do for most small business owners, because there is no formula immediately. Many methods are available to build value for the business, but this is one of the most popular.

  • Cost-plus pricing is used mainly by manufacturers to ensure that all costs, both fixed and variable are covered and the percentage achieving the desired profit.
  • Price needs to be used by the company sells products through a variety of sources with different prices based on demand.
  • Competitive prices used by the company are entering a market where a price has been established and it is difficult to distinguish the two drugs.
  • Mark-up prices are used mainly retailers and is calculated by adding the desired profit of enterprises with the cost of the product.

Businesses will also have to determine distribution, which covers the entire process of moving products from the factory to the end user. Be sure to analyze the distribution of opponents before deciding whether to use the same type or an alternative channel can give you a strategic advantage.

Finally, your promotion strategy should include all the ways you communicate with your market to make them aware of the products or services you. To succeed, your promotion strategies need to address advertising, packaging, public relations, sales promotion and personal selling.

  • Competitor analysis

The purpose of competitive analysis is to determine:

  • The strengths and weaknesses of competitors in the market.
  • Strategy will give you a distinct advantage.
  • Barriers can be developed to prevent competitors entering the market.
  • Any weakness can be exploited in the product development cycle.

The first step in a competitor analysis is to identify both direct competitors and indirect businesses, both now and in the future. Once the group now has competitors, start analyzing marketing strategies and identify vulnerable areas by examining the strengths and weaknesses. This will help businesses identify distinct competitive advantage.

Anyone reading the business plan must be very clear on who the target market is, what the segment is exactly how the business will stand apart from all competitors, and reasonable why the business will succeed in doing that.

  • SWOT analysis

S.W.O.T analysis is a method can help the business to evaluate the internal as strength, weakness and the external like opportunity, threat.

Strength is the advantages can help the business to achieve the goals; weakness is the disadvantages can obstruct a development and improvement of the business; opportunity is the factors may be able to help the development of the business and exploit to its advantages; threat is the factors external may be make a challenge for the business’s activities.

S.W.O.T analysis helps a business to concentrate on those areas that present the greatest opportunities and those competencies in which it is strongest. That business look into ways to diminish its weaknesses, develop strategies to defeat threats.

  • Operations

The operation and management components of a business plan are designed to describe how the business functions on a continuous basis. Planning and logistics activities of prominent organizations, such as the responsibilities of the management team, assigned tasks for each department in the company, and capital requirements and costs related to the operation of the business.

  • Financial planning

After identifying the products, markets and operations, the next area to turn attention to the three financial statements are the backbone of the business plan: income statement, cash flow statement and balance sheet items.

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The income statement is a report on a simple and straight forward about the cash generating capabilities of the business. It is a transcript of the financial performance of the business reflects when sales are made and when expenses are incurred. It draws information from various financial models developed earlier as revenue, expenses, capital, and cost of goods. By combining these factors, business results shows just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at an outcome together, which is a profit or loss. In addition to the earnings report, including analysis of the results noted. Analysis should be very short, emphasizing the main points of the income statement.

Cash flow statement is one of the most important information tools for businesses, because it shows how much money the business will need to meet obligations, when it will be required and where but it will come from. As a result, the profits will loss at the end of each month and year.

Cash flow statement brings both profit and loss transfer to the next month also shows the cumulative amount. Running a loss on the cash flow statement is a big red flag that there is not enough cash to meet the costs-something that requires attention and immediate action.

Cash flow statement should be prepared on a monthly basis in the first year, quarterly for the second year, and every year for the third year. As with the income statement, this will now need to analyze the cash flow statement in a short summary of the business plan. With the analysis is not only long and should include the highlights.

The final financial report is a balance sheet. Unlike the previous financial statements, balance sheets are generated every year for a business plan and are, more or less, a summary of all the information prior fiscal divided into three domains Location: assets, liabilities and equity.

Balance sheets are used to calculate the value of the assets of a business, individual by measuring assets against liabilities. If the business plan is an existing business, balance sheets from the last reporting period of the business should be included. If the business plan is a new business, trying to project the assets and liabilities of this business will end up planning process to determine which business owners can now accumulate in business. Received funding for a new business, the business will need to include personal financial statements or balance sheets.

In the business plan, creating need to analyze the balance sheet as well as the need for business to make the income statement and cash flow. Analysis of the balance sheet should be cut short and include key points.

  • Timeline

Timeline of a project or plan is a clearly time defined in a project or a program has been set up according to a predetermined plan. Timeline will be determined depending on the nature and objectives of the plan which aims to plan, if the timeline is inaccurate or not done is set the time over, which can lead to deviations in the results to be achieved or create other consequences.

Timeline will be set when the business plan was given; although this is short or long term of time, it will be determined by predicting the working process of how to achieve the goal. When implementing the plan need to pay attention to the timeline and ensure the implementation process must be completed before the timeline.

Purpose of timeline for the implementation is to try to urge the plan must be carried out and completed in accordance with the target set. Thus, there are benefits from the plan will be achieved as desired.