Compose A Winning Business Plan

Key Components of A Business Plan

As the saying goes, an entrepreneur who fails to plan plans to fail. A winning business plan helps you put every aspect of your business into focus, and avoid costly mistakes. Although no two business plans are exactly the same, all should include at least the following five essential sections:

1. Executive Summary, identifying the legal structure of your new venture, your needs (in terms of inventory, equipment, working capital and other resources), the amount and purpose of any requested loans, and projected timetables for repaying investors;

2. Business Description, providing a succinct overview of the kind of business you will start, its mission, financial projections, and how you intend to go about making your business a success;

3. Marketing Plan, identifying the target market for your offerings and the strategies you will use to generate customers. Includes market analysis, with demographic information about your customer base;

4. Competitive Analysis, focusing on the strengths and weaknesses of important competitors, and why your unique business will work where others have failed;

5. Financial Overview, specifying what income you have, the expenses you will accrue, and how much start-up capital you will need. Should also include a five-year financial forecast, consisting of a monthly forecast for the first year of operations, a quarterly forecast for the next two years, and annual forecasts for the two years thereafter.

Additional sections you may wish to consider, depending on your needs, include a Summary of Business Management, spelling out who will do what; expanded Product and Service Descriptions, especially if providing new or unfamiliar offerings; and a thorough plan detailing how you will design and develop new products.

Quality of presentation is key. Word processing is a must, and user-friendly charts, graphs and indexes are generally quite helpful. In addition, be sure to identify (and provide solutions for) your weaker areas, along with stressing your strong points. This shows potential investors and others that you have really thought things through.

Contact Sources

Art Printing Co., R.D. 3, Box 447, Rte. 64, Mill Hall, PA 17751, (717) 726-4470.

Just Cruises & Tours, (800) 547-7327.

Something Else by Peterene, (617) 293-6413.

Sterling Name Tape Co., P.O. Box 939, Winsted, CT 06098, (203) 379-5142.

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This article was originally published in the October 1996 print edition of Entrepreneur with the headline: Compose A Winning Business Plan.

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