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Developing an Effective Business Plan

Business plans vary significantly depending on their primary purpose. When you’ve collected all the information you need to create a plan, you should then tailor the plan to its intended audience.

Business plan structure

A business plan typically comprises four major parts.

1. executive summary — The executive summary is an abstract of your business plan. It lists everything you’ll detail in subsequent sections of the plan. It describes your proposed idea — whether it be a new product or service, a new process, or some kind of expansion. It then summarizes the purpose, management, operations, marketing, and finances for this idea.

2. market opportunity — The market opportunity describes the unmet need or want your product, service, process, or expansion will fulfill. It also presents evidence that there is consumer demand for whatever you are proposing. This section typically includes credible market research about your target market. This section should also describe ways of testing the potential popularity of any product or service you want to introduce.

3. implementation — Implementation is the how-to section of your business plan. It details steps you’ll take in the areas of marketing, operations and finances, and people. Your marketing subsection builds on market research presented. Your financial plan will include costs to launch, operate, market, and finance the idea, along with realistic estimates of revenue for the coming few years. The people section describes key personnel and why they’re suitable for their roles.

4. contingencies — In the contingencies section, you’ll outline those things that are most likely to go wrong as you implement your plan. It also includes details of how you’ll respond to any problems that arise. While you can’t plan for every contingency, this section illustrates your willingness and ability to deal with unforeseen adverse circumstances.

When creating your own business plan, consider each of the major parts in turn and be clear about what each comprises. You must then present each of the major parts in a way that’s effective for your audience.

Business plan review

Effective business plans capture their audience’s attention. This increases the likelihood a plan will be accepted.

They capture their audience by presenting a compelling narrative. Instead of lists of facts or figures, they tell a story the audience wants to hear.

Such documents don’t need to be very long. What’s most important is that they’re focused and clear, with the most relevant issues addressed succinctly.