Components of Business Plan

There are two main sections of a business plan.  The first section is the business plan narrative and the second section is the business plan financial projections. In this blog, I will describe the components of each section.

Business Plan Narrative

The business plan narrative have four sections, which are (A) business description, (B) market strategy, (C) managment and operations, and (D) risk analysis.

Business description illustrates overview of your business.  There are seven components of business description and they are listed below:

1. name of business
2. mission and vision
3. type of business
4. general description of business
5. history of business (if not a startup)
6. current situation
7. goals and objectives

Market strategy illustrates who do you sell it to and how do you sell it?  There are nine components of market strategy and they are listed below:

1. product/service description
2. customer description
3. industry description
4. pricing strategy
5. competitive analysis
6. advertising
7. media and PR strategy
8. distribution strategy
9. location description

Management and Operations illustrates who will managment the business, how will they manage it?  How you will product the products or services you deliver?  There are seven components of managment and operations and they are listed below:

1. details of day-to-day operations
2. management team with education, background, responsibilities
3. ownership structure
4. strategic partner and supplier discussion
5. human capital and personell needs discussion
6. insurance and risk managment discussion
7. facility overview

Risk analysis illustrates that you recognize risk and have taken steps to control them.  There are four components of risk analysis and they are listed below: 

1. market risk
2. financial risk
3. managment risk
4. technology risk

Financial Projection

Financial projection illustrates how much money is needed to make your business plan a reality.  There are nine components of financial projections and they are listed below: 

1. List of required funds and their uses
2. List of sources the required funds will come from
3. Sales forecast
4. Variable cost of sales
5. fixed-expense operating budget
6. projected profit and loss statement
7. projected cash flow
8. projected balance sheet
9. break-even analysis

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