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The Ten Essential Elements for an Effective Business Plan

Guest post by: Mimi Ward

Article Overview: A good business plan contains the essential elements that testify that the research has been done and that the owner thoroughly understands his market. There are identifiable sections which, when researched and written properly, give the reader enough information to make a decision about the potential of the business.

The Ten Essential Elements for an Effective Business Plan

A good business plan contains the essential elements that testify that the research has been done and that the owner thoroughly understands his market. There are identifiable sections which, when researched and written properly, give the reader enough information to make a decision about the potential of the business. The sections are outlined below.

1 Define the Problem

For a business to survive and remain profitable, it must solve a real problem. The first part of the plan must be a clear statement of the issue that is being addressed. This should be substantiated with quantifiable evidence of the nature of the problem. When possible, the cost in terms of money and time should be addressed.

2 Define the solution

The next section of the plan includes a general description of the solution and a description of the benefits of this particular solution. This is a summarization of the product, not a detailed specification.

3 Describe the overall market

This section describes the general market for the particular niche product. It should show market trends and dynamics from as much research as possible.

4 Describe the Business Model

This section should clearly show how the income will be produced, what expenses are involved, and what kind of profit can be expected. It should clearly show the potential of the investment.

5 Describe the Competition

All of the competing products and suppliers should be listed, along with pricing descriptions and comparisons wherever possible. The benefits of one product over another should also be detailed.

6 Describe Your Marketing Strategy

This section details the plan of advertising, pricing, distribution channels, and partnerships that will get the product to the customers. It can include a rollout plan and key milestones.

7 Describe Your Management Team

This should include a brief bio of each member of executive management. This section is a key element in the success of the plan. It should be clear how each of the members will provide business savvy and knowledge.

8 Describe the Current Financial Picture

It is very important to show exactly how much is being invested in the company and what additional financial needs are being requested. The initial investments can also describe the 'sweat equity' investment of the founders.

9 Describe the Financial Projection

This should be a five year projection of the revenue and expenses. The break-even point must be identified. If there is historical data, the past three to five years should be included in this section.

10 Describe the Exit Strategy

This section is necessary when you are seeking investors who need to know how and when they should expect to reap their rewards. It may be and Initial Public Offering, a proposed sale, or other strategy.

Remember, a good business plan will answer any question a potential investor has. It will also serve as a roadmap and checklist to the owner

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Article Tags: business loan application, Business Plan, effective business plan, how to start a business, Successful Entrepreneur
Referred by: http://jaykubassek.com



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