Important Aspects of a Good Business Plan

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Yellow Belt
The executive summary

The executive summary should go first in your business plan, even if you don't write it until the end. As it goes first, it could be considered the most important part. If you don't impress your reader with it, they may never bother to even move on to your next points.

What is it?

The executive summary is a synopsis of the key points of your entire plan. It should include highlights from each section of the rest of the document - from the key features of the business opportunity through to the elements of the financial forecasts.

Its purpose is to explain the basics of your business. If, after reading the executive summary, an investor or manager understands what the business is about and is keen to know more, it has done its job.

It should be concise - no longer than two pages at most - and interesting.

What is it not?

* A brief description of the business and its products. It's a synopsis of the entire plan.
* An extended table of contents. This makes for very dull reading. You should ensure it shows the highlights of the plan, rather than restating the details the plan contains.
* Hype. While the executive summary should excite the reader enough to read the entire plan, an experienced investor or businessperson will recognise hype and this will undermine the plan's credibility.

Your business, its products and services

If you want other people to invest in your business you must be able make it clear to others what it is your business does,
Who are you, what do you do, what have you to offer, and what's your market?

Start with an overview of your business:

* when you started or intend to start trading and the progress you have made to date
* the type of business and the sector it is in
* any relevant history - for example, if you acquired the business, who owned it originally and what they achieved with it
* the current legal structure
* your vision for the future

Product Description

* why is it different
* what benefits it offers
* why customers would buy it
* how you plan to develop your products or services

Obviously, you understand your business. But, your reader may not.If you use jargon you cold lose him, and if he doesn't understand what it is you're trying to say, how's he going to invest in you?

Your markets and competitors

Define your market; what is your position in it and who are your competitors?. If you've done any market research mention the results.

Demonstrate that despite the competition you have something they don't.

Key points:

* your market - its size, historical data about its development and key current issues
* your target customer base - who they are and how you know they will be interested in your products or services
* your competitors - who they are, how they work and the share of the market they hold
* the future - anticipated changes in the market and how you expect your business and your competitors to react to them

Most business have some form of competitor, whether it is just one, or thousands.

Do you know your competitors' strengths and weaknesses? Have you analysed them? Have you considered what will happen if/when, your customers' needs change, how will you adjust to meet those needs? Write all your answers down as part of your business plan in this section.

Marketing and sales

Often the weakest links in business plans is having thought of specific activities you intend to use to promote and sell your products and services. Above all, be realistic.

* how do you plan to position your product or service in the market place?
* who are your customers? Include details of customers who have shown an interest in your product or service and explain how you plan to go about attracting new customers.
* what is your pricing policy? How much will you charge for different customer segments, quantities, etc?
* how will you promote your product or service? Identify your sales methods, eg direct marketing, advertising, tele-marketing, email, website.
* how will you reach your customers? What channels will you use? Which partners will be needed in your distribution channels?
* how will you do your selling? Do you have a sales plan? Have you considered which sales method will be the most effective and most appropriate for your market, such as selling by phone, over the Internet, face-to-face or through retail outlets? And do you have the right skills to secure the sales you need?
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