Describe the components of a business plan

Purpose
This is a short 2-3 paragraph section explaining why the plan is being written. For a plan to be used in application for funds, it should clearly be stated:-
- The types of the funds being sought
- Whether loan or grant
- The reason for the funds

For loans funds should be indicated:-
- Amount required
- How the funds are to be used
- For how long the loan is required
- Proposed repayment pattern
- Security available
This section helps to understand the rest of the business plan

Executive summary
This is a short section summarizing the key points about the plan. It explains in brief the whole plan and it should obviously be written after the writing of the whole plan is completed.
Business description
For an already existing business, the details would include;
- Business form and ownership
- When started
- Past performance, success and failures
- Reason for the required assistance

For a new start up business, it would include:-
- Mission of the new venture
- Your reasons of going into business
- Why you think you will be successful in this venture?
- What development work has been completed to date?
- What are your products or services? Describe them including patent, copyright or
trademark status.
- What is the location of the business and your reason for choosing the location?
- Is your building new? If it needs renovation state the cost of the renovation.
- Is the building leased or owned? (State the terms)
- What office equipment will be needed?
- Will the equipment be purchased or leased?
- What experience do you have to help you successfully implement the business plan?

Marketing plan
The marketing plan is based on the market data received in the market research
activities. The marketing plan describes the marketing conditions, and strategies
proposed for positioning the products and services. It also gives description of pricing
distribution and promotion policies. It will include;
- A description of goods and services being produced or to be produced and their
uses.
- Present market situations and their products.
- Target market and expected market share.
- Advantages of your products against competing goods or services proposed price
and distribution channels.
- Expected future market growth.

Management plan
It gives details on;
- The owner/manager and other key people in the business
- Their qualifications, skills and past experience
- Their role ability to successfully carry out the proposed business or any
training required.
- Their salaries and benefits.

Production/operation plan
It gives details of the manufacturing process and operations of the proposed venture. It
indicates what items to be subcontracted, the cost and the time frame. It also provides the
production details such as physical plant layout, the technology, the requirements of the
equipment’s, raw materials and the cost of manufacturing.
If the proposed new venture is not manufacturing type but service oriented; in that case, the
operational plans are made. The operational plans describe in details the chronological steps
involved in the business operations. Questions for productions plan include;
- Will the new venture be responsible for all part of the manufacturing operation?

- If some manufacturing is subcontracted, who will be the subcontractors? (Give names
and addresses)
- On what basis will sub-contractors be selected?
- What will be the layout of the production process?
- Which raw materials will be needed for production? And which are critical?
- Who are the suppliers of the new materials and what are the appropriate costs?
- What are the cost of manufacturing the product?
- What are the future capital equipment needs of the venture? And why?

Financial plan
It gives projections of important financial data that determines the productivity of the venture
and financial investments required for the venture. The financial figures are drawn by the
entrepreneurs from the forecast sales and production ventures. It also indicates the projected
balance sheet giving the financial conditions of the business, giving the details of assets and
liabilities investment by entrepreneurs. The financial plan includes;
- Estimated cost of the proposed business
- Purchase of fixed assets including any building and machinery
- Working capital including purchase of stock, raw materials, running costs, wages, power,
transport.
- Proposed sources of required funds
- Amount to be contributed by owners
- Required loan/grant

Expected performance
This section should show the expected future performance of the business in profits and
increase or decrease in the business asset. This section should be prepared with the help of an
accountant or consultant.
Action plan
This section gives details of the actions to be taken in implementing the business proposal
showing;
- What is to be done?
- When
- By whom
- How long will it take

Appendices
This is attachment of the necessary documents in support of information contained in the
business plan. This includes;
- Projectile income statements, cash flow statements and balance sheets
- Copies of past performance records
- Copies of plot maps, title deeds, allocation letters, building plans
- Copies of cvs certificates

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Titany answered the question on November 10, 2021 at 09:24