Business Plan Essentials - The Key Elements, Structure, and Importance

1. Lesson 3.2What Goes into a Business Plan? Goals • List and describe the basic elements of a business plan. • Describe how to pull a business plan together. Chapter 3

2. Terms • pro forma financial statement • cover letter • statement of purpose • executive summary Chapter 3

3. Basic Elements of a Business Plan • The three basic components of a business plan are: • introductory materials • the main body • the appendix Chapter 3

4. The main body of a business plan contains the following elements: • Introduction • Marketing • Financial Management • Operations • Concluding Statement Chapter 3

5. Introduction • The introduction should contain the following information: • A detailed description of business goals • short, medium, and long-term goals Chapter 3

6. The legal structure of the business, including ownership • sole proprietor, partnership, or corporation • Your applicable skills and experience • paid, volunteer, and hobbies Chapter 3

7. The competitive advantages of your business • Performance • Quality • Reliability • Distribution • Price • Promotion • Public image or reputation Chapter 3

8. Marketing • The marketing section of the business plan should describe: • Products and/or services • Market • Industry • Location Chapter 3

9. Financial Management • Identification of Risks • It is reassuring to lenders to know that you have proactively defined risks and that you have a plan for dealing with them. Chapter 3

10. Financial Statements • pro forma financial statement • a financial statement based on projected revenues and expenses • Funding Request and Return on Investment • personal investment • loan based financing • anticipated return on investment Chapter 3

11. Operations • daily business management • staffing • facilities • buy or lease • equipment Chapter 3

12. Concluding Statement • Summarize goals and objectives. • Emphasize your commitment to the success of your business. Chapter 3

13. List the elements of the main body of a business plan and explain why each one is important. Chapter 3

14. Complete the Business Plan • Introductory elements • cover letter • a letter that introduces and explains an accompanying document or set of documents Chapter 3

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16. Title Page • Table of Contents • Statement of Purpose • a brief explanation of why you are asking for a loan and what you plan to do with the money Chapter 3

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18. Executive Summary • a short restatement of the report • An executive summary should: • compel the reader to continue reading • describe your business concept • include financial projections • identify physical needs • state the requested loan value Chapter 3

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20. Appendix • includes supporting documents that provide additional information to support the body of the report • Put It All Together • The business plan should be: • neat • attractive • well organized • inviting to read Chapter 3

21. Why should you include supporting documents in your business plan? Chapter 3