Components of the Business Plan

A business plan should be comprehensive enough to give any potential user a complete picture and understanding of the venture and will help the entrepreneur clarify his or her thinking about the business.

Although there is no generally accepted format of a business plan. A typical format would possess the following:

 1. Cover page:

It contains the name of the business, its owner(s), nature of the business, and the organization to which the business plan is to be presented.

 2. Executive summary:

Contains a brief summary of the main contents of the business plan. It is prepared after the entire plan is written. It summarizes every chapter of the page.

 3. Business description:

Contains a comprehensive description of the business and what it intends to accomplish

Example of information contained includes:-

  • Name of the business and its contact
  • Vision and mission of the business.
  • Form of ownership.
  • Major activity of the business.
  • Major customers.
  • Justification statements/viability
  • The goals of the business

4. Marketing plan:

The marketing plan outlines the specific action the entrepreneur intends to carry out to attract potential customers. The marketing segment is divided into two major parts:

  • Research and Analysis: describes the target market i.e. who the customers are, the size and its trends, the existing and po ssible competition.
  • Marketing strategy: This part describes the methods that will be used to market the product, price the product, make sales, advertise and promote the product and also the distribution channels that will be used.

5. Organization/ management plan.

This is the section that describes the key management personnel required, their qualifications, duties, salaries and incentives. The organization structure is also defined

  • It also identifies other employees needed, their duties, pay, training needs.
  • Other support services required are highlighted in this section e.g. banking services, legal services, management consultancy Etc.
  • Any licenses, permits or regulations affecting the business are discussed here.

6. Operational plan/Production plan.

This section describes the processes, activities, and requirements involved in realizing the operational goals of the business and required raw materials.

7. Financial plan

This section outlines the financial needs of the business and sources of raising the finances and also gives the projections of income and expenditure through such key statements as:

  • Cash flow statement
  • Income statements (trading, profit and loss account statements) among others.

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