5 Parts To A Perfect Business Plan
Business plans are classified as instructive and informative statements that establish the goals, hopes, descriptions, and mission of a business – both new and/or preexisting. In many cases, business owners and employees alike depend on their business plans to provide a map or navigational system that conducts the flow and direction of a business. Although there does not exist a definitive standard for business plans, traditional business plans consist of multiple components that express and illustrate the key functions and goals of a business.
Components of a Business Plan
1. Mission Statement
A mission statement consists of a brief statement, summary, and conclusion that is under 20 words. A business plan’s mission statement is used to present a quick overview of the intended measures of a business. Due to the brevity of a mission statement, the content should be memorable, to-the-point, and informative. In most cases, a mission statement will be the first item read on a business plan, and as a result, ample time and effort should be put forth in its construction.
2. Background Information
Background information reflects the history of a business, often illustrating biographies on the founders, the history of the business, and the timeline documenting the development of the business. In lieu of directly meeting with the business owners or personnel, the background information located in a business plan can shed light on pertinent details reflecting the inception of a business.
3. A Plan of Operations
A plan of operations found in a business plan elucidates the intended results, hopes, goals, and plans that the business in question hopes to meet and achieve. A plan of operations consists of both an agenda, as well as a goal-rundown.
An agenda illustrates the daily operations performed by the business on a regular basis. In many cases, agendas are subdivided in order to properly and explicitly denote the various departments within a business, as well as the tasks, responsibilities, and operations for which they are responsible.
A goal rundown is an illustration of the goals set forth by a business, ranging from long-term goals to short-term goals. In many cases, business plans contain monthly, quarterly, and yearly goals and expectations. Oftentimes, business plans will include five-year and ten-year plans.
4. A Financial Plan
A business plan’s financial plan is a projection of both current and future finances, as well as a salient provision of financial requirements, solubility, and liability. A financial plan should reflect realistic and valuable information that conveys projections to potential investors and current employees alike. It is not uncommon for businesses to be considered or discounted based on their respective financial plans.
5. Sales and Marketing Strategy
The sales and marketing (S&M) strategy in a business plan illustrates the measures that a business takes to ensure profitability. Through sales and marketing, a business retains the potential to establish themselves in the professional world.
The Legality of a Business Plan
Due to their importance, business plans should be created in a meticulous fashion. False or misrepresentative information can be grounds for legal ramifications. Individuals constructing business plans are encouraged to hire an attorney for the review of their business plan both for its authenticity, as well as its viability.