The Key Elements of a Business Plan

Part B: Market Analysis and Planning

In this section, describe the market for your product or service, how you fit into that market and your plans for achieving a certain share of the market. Include the following:

• The total market and your target market
• The names, the market share, and your assessment of your competitors
• Your current and/or projected market share
• Your marketing advantages relative to your competitors
• Your pricing policy, including how you determine the cost of your products and services
• The size of your sales force, and how they will be paid (salary or commission)
• Your selling policy, including product price and what credit terms are available to buyers
• How you will distribute your product or service
• Your advertising and promotion plan
• Your planned customer service program
• How you will handle service problems and warranties

Part C: Financial Planning

1. Financial Plan

This is the nuts and bolts of your business plan. Investors and lenders will use the information in this section to evaluate the financial prospects for your business. Include the following:

• Start-up costs
• Income statements and balance sheets for as long as the company has been in operation (if applicable)
• Financial projections for at least one year (three years if possible), including projected cash flows, income statements and balance sheets. Also include break-even charts, if applicable
• Sources of funding, including friends, relatives, other private investors, lending institutions, credit from suppliers, government grants and loans
• Loan repayment schedules

2. Summary of Risks and Assumptions

In this section, you will list the critical assumptions you made when formulating this business plan. You will also identify major risks to the success of your business and indicate what steps you are taking to avoid or minimize these risks.

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