An Analysis of The Components of a Business Plan

The purpose of this paper is to analyze the different components of a business plan. Each part will be described in a brief overview, with more focus being put on specific sections. The Small Business Association has outlined each of the documents that make up the proposal on its website. This guideline provides accessibility and reference for businesses to create a roadmap of their own.

One important document for any company to include in their business plan is an executive summary. This component informs readers of what your business does, where it is planning to go, and what will make the company successful. The contents of this abbreviated description varies depending on the stage of a business. A well-established company would include its mission statement; explaining what the business does and stands for. The executive summary would also contain financial information such as current investors, and increased growth/profits each year. A new business on the other hand, would describe the decisions and background leading to the startup of the new company as well as the owners’ experience. This information is intended to show potential investors why the company would succeed in its target market.

Another key aspect of a business plan is the company description which reviews the different aspects of a business. This is where a company will explain what market their services or products will satisfy a need. Typically following the company description is a market analysis which describes the industry and target market for your business. This is where a company will describe their strengths, weaknesses, and other components of the competitive landscape within their target market. After this, a business will explain its organization and management structure which is an overview of the company’s internal hierarchy. This includes a detailed description of the owner and management team, with resumes for reference to experience.

An extremely important part of a business plan is a company’s service or product line which explains their product or service and how it will benefit consumers. This section provides specific examples of how the business’s product or service will fulfill customers’ needs and why it supersedes any competitor’s products or services. Two important details to include in the service or product line is how long its life cycle is as well as any copyright or patents that have been obtained or are still pending approval. Along with copyright and patent information, it is imperative a company lists any legal agreements to be acknowledged by the public.

Following the service or product line, a company should state their marketing and sales strategies implemented to make their business successful. This information includes detailed explanations of marketing, growth, distribution plans in addition to strategic sales force and sales activities. Most companies seek financing from a variety of investors and therefor, must specify in their funding request, what this money will be used towards. Information listed in this section includes current and future funding requirements, intended use of the money to remain transparent with potential investors.

One of the last pieces to include in a business plan is the financial projections, this is a company’s opportunity to demonstrate its current fiscal data and forecasted projections for coming years. Important points to reference are financial details from previous years such as statements, income and expense sheets, as well as collateral to use for loans. Companies must ensure the projections match funding requests to prevent prospective creditors from finding inconsistencies. Using graphs to represent positive economic growth, most businesses are able to successfully showcase their initiative to potential investors. The final piece to include in a business plan is the appendix, which contains all reference documents, such as product pictures, credit history, licenses and permits, legal contracts, and reference letters.

To conclude, a business plan has multiple components that serve as an overview of a company’s proposal to attract customers and investors alike. Each section contains vital information to a business’s marketing and organizational analysis and strategies, funding requests, product or service features, and an overall company description. This plan provides detailed information regarding a company’s business model and future projections. The different information listed lends transparency between a business and the public.