Opening a business can be daunting, but it does not need to be. With a well-written plan in place, you will be able to remain focused and organized when starting out your own business. It’s also important to create a business plan if you would need to secure financing from banks or other traditional lenders. In this article, we will discuss the 7 key parts of a business plan, so you can start writing your own today.
- Executive Summary
First of all, note that you will be submitting your business plans to prospective investors, business partners, and money lenders, who may not have to read a complex, lengthy document. Hence, you should start with a good summary of your franchise business, the products offered, and your strategy.
Your executive summary should be between 250 and 300 words. Make sure to include a few data and concentrate on what sets your business apart. Although this might be the first section in the plan once it’s completed, you may want to write this section last when creating a business plan.
- Company Description
The next section will contain a short overview of your company. Maintain a high-level tone as you did with your executive summary. In the sections below, you will have to provide details about your products, management, and strategy.
Here, you will concentrate on::
- Your business structure (i.e., a corporation, LLC, sole proprietorship, etc.)
- A short history of your business
- A brief description of your product and/or services
- Your target audience
- A summary of your long and short-term business goals
As with the first section, you don’t need to include details here. Just ensure that you understand your goals when opening a business for the very first time.
- Description of Your Products and Services
Here, you will provide a more comprehensive description of your products and/or services. This section needs to include:
- How the customers benefit from your product or service
- How your company differs from your competitors
- Any important information about copyright, patent, or trade secret
- The possibilities for introducing new products or services
Don’t forget to include key information about project supplier costs since these expenses will be important when tabulating your financial data.
- Market Research and Analysis
In this section, you will demonstrate your knowledge of your industry by discussing your target customers and how you plan to contact them.
Consider things such as:
- The size of your target market
- Trends and outlook for the industry
- Historical, present, and projected marketing data
- Comparative analysis of other similar companies, highlighting their weaknesses and strengths
This section may contain a lot of data. If this is the case, consider putting detailed findings in an appendix at the end of the business plan.
- Sales & Marketing Strategy
This section will provide more explanation about the one before it. Here, you can concentrate on what you will be doing when your business begins operation, like:
- Working hours
- Commercial real estate needs
- Marketing strategies and promotional materials
- Sources of labor and the number of workers
You will also want to include cost estimates for each of these items, so you can better tabulate the operating costs.
- Organization & Management Team
In this section, you will discuss the ownership and management team of your establishment. This implies that you will talk about your top executives and explain their specific role(s) in the business. It also helps to include a short description of their background and why they would make a great addition to your management team.
Even if you are a sole business owner, you will still have to include a description of your history to showcase why you think you will succeed in your target industry. You also need to include the names of advisors or other professionals who might have an influence on your decisions, like accountants, attorneys, etc.
- Financial Plan and Projections
The last part of a business plan should discuss your financial projections for the start-up. Begin with your expenses, which you would have included above. Other possible expenses include:
- Taxes
- Business Insurance
- Debts and loans
- Business permits
- Professional licensing and many more
After this, you will want to state the financial plan for the business. If your business is already up and running, it’s good to include financial statements for the previous 3 months, so you can showcase how your business has been growing.
So, you have to at least tabulate the income you will require to stay in business. Make sure to include any funding requests, as they might be crucial when applying for a business loan.
Franchise Makes Creating a Business Plan Easier
While you will still need to create a business plan even when buying a franchise, it can make the whole process a lot easier. In most cases, the franchisors will give you templates and data to help you create the document more quickly.
