The 7 Elements of a Successful Business Plan (Template Available!)
When you are ready to get to work on your dreams and write your business plan, it can be helpful to have a guide to get the ideas flowing and make sure you have your bases covered for your business. In this guide, we’ll provide a high level overview of the 7 essential elements of a successful business plan.
If you are ready to jump right into business planning, you'll find the template here.
1. Executive Summary
The executive summary describes the overall mission of your business. It's the 60 second elevator pitch or short paragraph on the who, what, when, where and why for your business. Keep in mind who you are writing the executive summary for. If your business plan is being used to secure investment, make sure to tailor it towards what an investor or bank would want to see.
In a few sentences, are you able to catch their attention? There is no room for fluff in the executive summary. Get to the meat and bones of your business in a precise manner.
2. Business History, Background and Objectives
For people to get to know your business, it's very helpful to know where you have been and what your experience is. This is the place to talk about how long you have been in business, what your previous experience is, how your business has evolved overtime and where you plan on taking it. If you are new to your industry, this is a way to get ahead of any hesitations or objections and explain how your experience prepares you for this new role. This is also a great way to lay out your key objectives, setting the scene for the rest of the business plan.
3. Products and Services
Now it's time to talk about your products and services. This is where you can list out the various ways that you plan to generate revenue. You can start off by listing out all of the products and services that you provide and then dig deeper. Describe your product and services in detail. What makes your products unique? Why are people going to pay you for these services?
4. Marketing Planning
The marketing plan is an important part of your business, so much so that we think it deserves probably deserves it's own handbook (keep following us, and you might just find one!) However, for the purpose of the business plan, you can keep the marketing section concise. By now it’s clear that you have a great product, but how will you get the word out to the people that would purchase your products? The best way to start is by asking, who is my ideal customer? Where do they hangout? What do they do? What do they like?
Once you know and understand your customer, it makes it much easier to figure out the rest of the marketing plan. Use what you know about your customer to develop your branding statement, decide on what channels to market your business and types of promotions to invest in.
Some aspects of the marketing plan include:
Ideal customer profile - Who is your ideal customer, where do they live, what do they do, etc.?
Branding - what are the values of your business and what does it stand for?
Channels and promotion - through what channels will you market and promote your business?
Location - where are you and your customers located? Is e-commerce an important aspect of your business plan, or will all of your sales take place in person?
There are a lot of little things that you can do to boost your marketing for little to no cost: creating a social media presence, registering your business on google, asking your friends for a shoutout, or attending a local farmers market.
For example, imagine a yoga studio: How do people typically find yoga studios? They might ask a friend or search on Google, so think about how you can position your company on Google to take advantage of all of the people searching for yoga studios. Or, you might setup a referral program so that your current customers are more likely to tell their friends to come to yoga with them.
In today's world, there is no doubt that consumers have options. You have to find a way to differentiate yourself.
The first thing that you want to do is scope out your competition. Try to find out more about their business. What products and services do they sell? Who are their ideal customers? Then start to think about what the gaps in the market are. What is missing in your community?
One easy way to scope out the competition is to put yourself in the shoes of your potential customer. For example, if you are starting a pizza shop, search Google for “pizza shops near me.” Check out each company's website, menu and maybe even visit the store.
Identify the strengths and weaknesses of your competition. Think about how your business can fulfill the gaps in the market. Differentiating your business is easier than taking your competition head on, and makes you appear more trustworthy.
6. Operational Plan
The operational plan is laying out the “how” of your business. Explain the logistics of your business, starting from the beginning of your supply chain. Where do your supplies, ingredients, and equipment come from? How do you turn those inputs into your final product? What employees and resources do you need to deliver your product?
While you are thinking through your operational plan, look at your supply chain and find places where you can optimize it. Where can you save time or money? How can you be most efficient? Coming up with creative ways to save money through your supply chain can be a competitive advantage, but you must also weigh savings against potential loss of quality. Bear in mind that if you have a great concept but fail to outline a solid operational plan, you may want to spend more time solidifying how you’re going to turn your business into a reality before pursuing financing.
7. Financial Planning
Financial planning can be tough for new businesses. It requires a lot of research. The key to financial planning is finding reliable data to work off of. The easiest part is figuring out your costs. What equipment, supplies, ingredients, etc. do you need to be able to run your business? You can find the price of your inputs by calling a supplier or doing a quick web search.
To estimate how much revenue you will make is a bit trickier. You have to start by listing out the different ways that you can generate revenue. Then, figure out how much you will charge for each product or service. Then, estimate how much of each product or service you intend to realistically sell per day, per month, or per year. This is where you need to get creative. If you are opening a brick and mortar shop, you can look at the foot traffic or you can look at a similar shop nearby. How many people pass by your shop? How many will likely come to shop? How much will they spend? What will they buy?
If you're able to answer all of the questions we've laid out, and create a plan that addresses fully each section, you'll be in a much better position to get your business off the ground. You can always reach out to the Mainvest team for help and direction towards resources, and you can use our template to write your business plan.