A business plan is a document demonstrating the feasibility of a prospective new business and providing a roadmap for its first several years of operation.
Although the specifics may vary, here are the typical components of a business plan for a new business:
- The executive summary is a nutshell version of the entire plan, briefly covering the essentials.
- The business description describes the proposed new endeavor, explains its purpose and its target market.
- The plan’s market analysis section describes the industry and the market environment of the proposed business, including a profile of the competition.
- The organizational and managerial section explains how you envision the structure of your business, what types of positions and departments it will encompass.
- The products (or services) section details what you’re offering. This section should include a full description of the products you’ll sell and your plan for product lifecycle management (PLM).
- The marketing and sales section explains your strategies for branding, marketing and selling your product or service.
- The financial projection covers the expected performance and milestones over the first years of operation, usually five years. For an existing business, historical financial data should be included.
A business plan includes the business model. However, the latter is a representation of how an existing business works, rather than how a prospective business can work.