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The Importance of a Business Plan

Creating a good business plan will not only serve to guide you through the various phases of the development of your business but can also serve as a management, planning and communication tool.  Careful time and consideration needs to be devoted to writing your business plan and there are fundamental components that should be present.

1. Executive Summary: Simply a one page explanation of what your business is, the industry you are competing in and work to set your apart from the competition. Include what is sold & who you sell to.  You will want to include a brief financial overview, and key points from the marketing, operational and financial planning sections of your business plan.  It’s easiest if you prepare this last and also think of it as your “elevator pitch”.
   
2. Company Description: Legal establishment, history, start-up plans, etc.
   
3. Product or Service: Describe what you’re selling. Focus on customer benefits.
   
4. Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.
   
5. Strategy and Implementation: Be specific. Include management responsibilities with dates and budget.
   
6. Management Team: Include backgrounds of key members of the team, personnel strategy, and details.
   
7. Financial Plan: Include profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.
   
8. Strategic Plan:  Project where you want your company to be in years to come; say the next two to five years.  Nothing too long term as it becomes quite impossible to project particularly in the e-commerce world. Include Strengths and weakness affecting your business, opportunities and threats impending. (SWOT – we’ll discuss this a bit later)