Entrepreneurs start a business to fulfill a purpose that has meaning for them. The business becomes an instrument for the entrepreneur to do what s/he wants to do. Your business plan describes what you want your business to do. It must comprise the following elements:
A. Strategy – In this part of the business plan, you first describe your Business Definition: Vision, Mission, Values and Business Opportunity. Your business plan begins with a one or two paragraph description of your vision statement. It should clearly articulate your picture of the business and the direction in which you are taking it. The vision statement answers the question, “Where are we going?” The mission statement describes your purpose and answers the question, “Why are we here?” Your value statement answers the question, “What is important to us?” Values are the things or conditions you consistently want to express. The final element in your Business Definition is the answering the questions, “What is the business opportunity?”
After articulating your Business Definition, you then move to setting objectives. An objective is a specific, measurable result, within a stated timeframe. Typically, the objectives include revenue and profitability and the starting point in setting objectives is to identify your three year key objectives. Then, you work back to identify your one year objectives. The final step is to analyze where you are today. This is known as a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats). Strengths and weaknesses are inside factors that affect the viability of the firm and opportunities and threats are outside factors that affect the viability of the firm.
B. Structure – At this point, you are in a position to prepare your resource plan. This plan looks at the resources you will need in order to reach your objectives. The final step in the strategy segment of your business plan is to identify major tasks and potential roadblocks. In any given timeframe, there will be a small number of tasks that are critical to your business success. Failure to focus on these major tasks can lead to business failure. Finally, the identification of potential roadblocks can help you to anticipate how you will adapt if circumstances change.
C. Systems and Processes – Your systems and processes comprise the operational strategies necessary to realize your objectives. The first step is to prepare your Marketing Plan. The plan details what marketing activities you will initiate to build your brand and create a unique identity in your chosen market(s). The next step is to prepare your Sales Plan. The sales plan outlines who you will sell to, what you will sell them, and when you will sell them. The service plan describes the service activities you will engage in to get and keep clients. Your service plan also highlights your value proposition. Once you have completed your marketing, sales and service plans, you can determine how to integrate these activities and assess the resources you will need to fulfill each aspect of your business plan.
D. Financial Management – The last part of the business plan deals with the financial aspects of your business. To be successful as an entrepreneur, you must take the time to fully comprehend the business financial statements. The business plan will include historical information about the business, and a pro-forma analysis to show where the business is going.
E. Executive Summary – The purpose of the executive summary is to overview the key components of the business plan in a dynamic manner. It is often the last part of the business plan to be written and, if necessary, can be presented as a summary document. The summary should be between one to three pages in length and serve to motivate readers to review the business plan for more detail.A Business Plan is a snapshot of a moving picture. For entrepreneurs, it is important to view business planning as an iterative process. Since change is the only constant, you need to schedule time on an ongoing basis to review and update your Business Plan.