The Key Elements Of a Sound Business Plan

There are no hard and fast rules that are set in stone when developing a business plan for your own business. It can be a little different though, if you’re chasing investors. However, this article is simply going to focus on some key elements your business plan can or should include when formulating a plan for a successful business. You may find you need to include some or all of these elements, or you may even come up with some new ones not listed here. This article is just a general guide to get you started.

A Summary Of Your Business Model

This is basically just a summary that briefly outlines what your business is all about, the goals you hope to achieve, how you plan to reach those goals, core values and objectives and so on. It gives you a chance to really think about what it is you want to do and when you write out your summary, you’ll start to have a much clearer picture of the direction your business is going to take.

A Section On Products Or Services

This is where you’ll be filling in detail on what products or services your business is going to provide. You can break this section up into subsections that detail the products or services individually, as well as your pricing models.

Another thing to consider in this section is defining who your target market is and where or how to reach that market.

Detail the Competition

Chances are high that your business isn’t entirely unique and you’re going to have competition out there. You want to learn as much about your competition as you can, what’s made them successful and what mistakes they’ve made along the way.

Once you know who your competitors are and have learnt more about them, it’ll then be time to define how you’re going to gain a competitive advantage over them. Will it be through cheaper pricing, add-ons, exceptional customer service, fast delivery? There are numerous ways you can gain an advantage once you know more about the competition.

Your Marketing Strategy

No business is going to be successful unless you know how to effectively market your products or services, so you can get your brand and offers in front of your target market’s eyeballs. Your marketing mix will likely include some advertising strategies, some paid and possibly some that are free to do.

This section needs a lot of thought and focus put into it, as it could be your marketing (or lack of) that ultimately makes or breaks your business.

Short Term and Long Term Business Objectives

This section is all about defining a clear vision of the direction of your business, the goals and milestones you want to achieve, including your financial objectives. List out your short term, medium term and long term goals. This actually gives you a guide to regularly look over so you can keep the business on course. It’s about first having a vision, setting goals and then working out how you’re going to achieve those goals and objectives.

A Section Devoted To Risk Management

No business plan would truly be complete without entering details regarding a risk management plan. All businesses are going to come face to face with risks along the way and the idea of risk management is to try and predict those risks and work out how you will prevent them from occurring.

Part of your risk management plan should include purchasing ERM software (Enterprise Risk Management software), which is an extremely handy business tool that will monitor your business and alert you to potential problems before they have a chance to escalate.

Perform a SWOT Analysis

SWOT stands for:

• Strengths
• Weaknesses
• Opportunities
• Threats

As you complete your SWOT analysis, you’ll gain a much clearer picture of where the strengths of the business lie, any weaknesses that need to be addressed, where your best opportunities will be, as well as anything that poses a threat to your business success (risk management helps with this last section).

The Takeaway

These are some of the essential elements you’ll want to cover in your business plan. Remember, it’s always better to have some form of a plan than nothing at all.