Business Plan: Components

The cover sheet of a business plan provides identifying information about the business including the business name, address and phone number. It also provides the names of the principle players in the company. In a home-based business, this is often only one or two people.

The executive summary needs to prove your credibility and integrity in the company. This component summarizes what is detailed in the rest of the business plan and should be one or two pages in length. And because it is a summary of the business plan, the executive summary should be written after the rest of the plan is complete.

The table of contents is a list of what is included in the business plan. It should precisely name each section of the plan and indicate where the reader can find each section.

This component provides the history of the business including information on the owner and other key management players. The idea for the business and what has been done to date in regards to starting the business should also be discussed here. If the owner has had other business in the past, this should be explained, as well as why they are no longer in that business.

This section explains what the business is all about. It will detail the company’s purpose, products, and services. This component should tell readers what your company does or will do.

This component will take some thought and may be one of the more difficult parts of the business plan to develop. However, this is also one of the most important pieces of the business plan as it explains who your customers are or will be as well as the area that your business will serve. This section will also explain any competition or weaknesses in you business.

This is the area where you will explain your existing or planned products or services. You will want to mention any research you have done into developing the product and any patents, trademarks, etc. that has been put into place (or will be). You may want to include visual images of your product as well.

This component will explain the management structure of your business and the expertise of key players. Explain the education and experience of the management team as it relates to the business. If you will have employees, explain your employee policy and procedures.

This component explains what it is you want to accomplish with your business. Describe your sales goals, quality assurance, advertising strategies and future plans. Also describe when and how your goals and objectives will be completed.

The financial component of the business plan is especially important if you will be seeking financing through outside lenders, such as a bank or the Small Business Association (SBA). This area of the plan will tell potential lenders why they should invest in your company. If your business is new, it is okay to use educated guesses and assumptions in this area. You will want to include sales forecasts, expenses and future market conditions.

The final component to a business plan is the appendixes. This includes resumes for the management team, financial charts, brochures, letters of recommendation, photographs, or any other relevant documentation.