Components of a Business Plan

Components of a Business Plan Articles

The task can seem overwhelming, but writing a business plan is an important step in helping your company launch, grow, and expand. Business plans provide vision and a clear strategy. They’re also critical for businesses seeking funding and even for the success of any company. The business plan works as a framework for the organization and provides benchmarks to see if the business is reaching its goals. This document presents a complete guide of the essential components of a business plan.

components business plan

Business Model

The business model is at the center of the business plan. This section of the business plan includes the business name and location, products and/or services offered and the mission and vision statements. The main goal of the business model is to draw readers in so they want to learn more about the company.

Business Summary

market positioning

Market Positioning

The market positioning section of the business plan describes how the company is positioned within its industry's value chain, and how it organizes its relations with its suppliers, clients, and partners in order to generate profits. This section translates this positioning in a series of strategic actions showing the industry knowledge, and presenting conclusions based on thorough market research.


team management

Operations Plan

This component of the business plan details the costs, pricing and distribution/logistics of the company. It offers an explanation of how the company will function, including the operations cycle (from acquisition of supplies through production to delivery), information on sources of labor and number of employees as well as the data on operating hours and facilities that will be required to operate effectively.


Marketing Plan

The marketing plan chapter of the business plan explains how the company is going to get new customers to buy its products and/or services. This part of the plan will be the roadmap the company will follow to get unlimited customers and dramatically increase revenues in the future.


trade shows

Market Segmentation

This section presents a sketch of targeted customer segments, including size and demographics for each group. The target market narrows down the total market by concentrating on segmentation factors that will determine the total number of users within the scope of the business products and services. The segmentation factors can be geographic, customer attributes or product-oriented.


business development

Promotional Strategies

The promotion strategy in its most basic form is the controlled distribution of communication designed to sell your product or service. In order to accomplish this, the promotional strategy encompasses every marketing tool utilized in the communication effort. This includes: advertising, packaging, public relations, sales promotions and sales channels.


Financial Projections

This last chapter of the business plan is developed along with professionals after completing a market analysis and goals for the company. Some of the financial statements that are part of the business plan include: historical financial data (if an established business is owned), including income statements, balance sheets and cash flow statements for the past three to five years and realistic prospective financial information, including forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets.


revenue projections

Revenue Assumptions

This section of the business plan presents the main sources of income for the company and the important financial assumptions undertaken to calculate such estimations.


budget forecasts

Projecting Expenses

This section of the business plan is a component that includes all overhead and labor expenses associated with the operations of the business. Direct and indirect costs will be explained in this part of the business plan along with tactics to keep the major ongoing expenses in balance to remain profitable.


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