Executive summary
The
context of a business plan should contain the “Executive Summary”. Just as the name suggests, this is a summary of all the key points in
the plan from a point of authority (also the commissioning author). It should introduce all the parts that make up the
sub-divisions in the plan. A good executive summary is a critical
success determinant because it is all that most people will read before
they can decide to venture further into the contents therein
Description of project
Once
you have summarized the contents of your business plan, you should then
begin by describing the business or project in details. Start by
explaining the reasons behind your choice of the project. The project
description should also contain an explanation of the business process,
mode of operation, the intended size, location, labour and or machinery
requirements.
Project costs
In conjunction
with the project description, the reader or user of the business plan information wants to know about the estimated project costs. There
are many ways of determining accurate project costs. However, it is
recommended that one should hire the services of professionals to
calculate the exact project costs. The costs include, among others, the
costs of acquiring equipment, supplies, buildings, labor costs, legal
fees, and set up costs. Always remember to provide for contingencies.
People
The
business plan should also give an account of the people associated with
the project. From the founders to those who will be running the
project/business. The reader wants to know about their academic
qualifications, previous duties and career successes as well as their
ability to perform and deliver on the new project.
The management
team is the central focus. Therefore, include details of the C.E.O and management team. Attach the relevant credentials detailing their
qualifications. The readers of the plan will keenly scrutinize the key
line managers i.e. the Finance, I.T and Marketing executives. The reason
why information about these people is important is because they are the
backbone of any business venture. Whether a project will take off and
run smoothly depends on the people at the helm.
Financial aspects
A
business plan should identify the people who will finance the project.
This is categorized under the financial plan. The financial plan
indicates the capital mix. Explain the proportion of debt to equity funds
in the project's capital structure. Similarly, it should document the
intended uses of the funds in the implementation of the project. It is
important to also indicate the interests that all the providers of
finance and sponsors, have in the project. For example, indicate the
percentage of ownership (if any) by the providers of start-up capital
Related
to this is the financial projections section. A good business plan
should explain the expected returns from the business venture. The best
way to do this is to attach a list of Pro forma financial statements.
Budgets are also vital tools used to explain the
expected future performance of a business.
Market Attributes
Perhaps the most
sought after component of a business plan is the market attributes section. You should indicate
the size of the target market, the suitability of your goods and
services, distribution channels, advertising models, the competition and
their share of the market, pricing strategies and the ease of entry.
There
is nothing in the business plan that is as convincing as the flow of
production process. This is to say that readers of the business plan
would like to know how practical the execution of the business is.
Therefore, the business plan should detail the production process. It should endeavor to portray the completeness of the business project
and facilities.
Finally, explain about the legal
requirements of your business. You should also point out the legal
challenges you expect to encounter while setting up of your project. For
example, disclose the number of licenses that must be obtained before
the business is registered. Other factors governing the establishment
should be disclosed such as the circumstances under which the law might prevent smooth operations.