🏗️ 👩🏻‍💼 🏳️‍🌈 The main sections of a business plan, its role and purpose 🌼 👛 📵

A business plan is a document that contains basic information about the implementation of a financial program. It is being developed to justify an investment project, as well as ongoing business management activities. The objectives of the activity, the ways to achieve them and the means are prescribed within the framework of the document.

Why do I need a business plan?

Before you understand what sections the business plan should consist of, you need to understand why this document is needed. So, its compilation has two key objectives:

It is a kind of manual or instruction for the direct manager of the enterprise. Returning periodically to this document, the manager understands whether the project is moving in the right direction.
It is the rationale for an investor who doubts whether it is worth investing in the proposed project. The document should contain convincing arguments, supported by mathematical calculations.

sections of the business plan of the project

What questions should a business plan answer

Drawing up a business plan is a complex long-term process that requires deep fundamental knowledge, practical skills and complete immersion in the process. Sometimes, a novice entrepreneur does not know where to start developing a document. First of all, you need to make a list of questions that a business plan should answer. Here are the key ones:

What type of business to do or what new type of products (services) to start producing within the framework of an existing organization?
Will the products (services) be in demand, how will the demand indicator change over time?
What resources (and most importantly - in what quantities) will be required to implement and launch the project on time?
Where to get the necessary resources for the production of products (services) at the best price?
What will be the sum of costs for the organization, direct production and marketing of products (services)?
What is the optimal price for manufactured products, and how does this indicator affect the external market environment and the activities of competitors?
What are the expected revenues from the project, and according to what scheme will they be distributed among the participants?
What are the expected indicators of production efficiency, as well as what measures can be taken to increase them?

Document Development Steps

Before proceeding to the characterization of the sections of the business plan, it is worth determining the algorithm in accordance with which the development and preparation of this document takes place. The process includes the following steps:

Collection and analysis of data on the demand for products or services that will become the basis of the investment project.
Development of a marketing strategy.
Analysis of available resources and potential sources of their income.
Building a financial strategy.
Development of the organizational structure of the enterprise and a review of personnel potential.
Grouping of received data and paperwork.

Title page

All sections of the business plan are preceded by a cover page. It may seem that this is a completely insignificant attribute. Nevertheless, it is precisely on the cover that the potential investor makes the first impression of the project. Of course, it will be superfluous to say that the title page should be drawn up clearly and accurately. It is more appropriate to mention that it should be informative. So, the following should be indicated on the cover page:

Name of organization or project.
Full legal address of the company.
Contact information for contacting management (telephones, e-mail, fax).
Full name of the head of the enterprise and the compiler of the business plan.
Date of compilation of the document.
Name of investor (if the document is submitted for consideration to several potential partners).

Section No. 1 "Summary"

The first section of a business plan is a summary. In fact, this is a shortened generalized version of the document itself, which fits on 3-4 pages. Despite the fact that the resume is at the beginning of the document, it is compiled after the entire plan is ready. Thus, the investor can quickly get acquainted with the main provisions. The summary should include the following points:

The purpose and strategy of the project.
The means by which these goals will be achieved.
Description of products (or planned to be released) products or services.
Comparison of products (services) with similar positions on the market.
Financial indicators at the current moment and in the future.
The need for material resources, as well as the direction of their use.
Forecast on the volume of output and sale of products (services), the level of return on investment and the expected period of their payback.

Section No. 2 "Description of the enterprise"

The second section of the business plan is a detailed description of the enterprise itself and the specifics of its activities. The following points should be highlighted in this paragraph:

Name of the enterprise (full and abbreviated).
Date of state registration.
Description of activities.
Form of incorporation and form of ownership.
State share in the capital.
Parent body.
Legal and actual address.
Geographical scale of business development.
Information about the stage of development (not indicated for newly formed enterprises).
Brief information about the product range.

Section No. 3 "Products and Services"

In the third section of the business plan, describing goods and services, you must prove to the investor their exclusivity and attractiveness. Here is what should be discussed in this section:

Physical characteristics of the product and methods of its use.
Attractiveness to the potential consumer.
Properties that distinguish a product or service from similar ones on the market.

Section No. 4 "Marketing Plan"

Section of the Marketing business plan convinces lenders or investors that the product or service will be in demand in the market. In fact, the result of this section should be a financial design for sales in general, and for each assortment unit. Here are the components a marketing plan includes:

Target market research with identification and description of target segments.
Assessment of the degree of competition with the determination of the share of each "opponent" in the target segment.
Description of the marketing strategy of the enterprise with a display of the mechanism for achieving the desired sales volume.
Description of advertising tools. Determination of the key parameter of financial calculations (as a rule, this is the volume of sales by assortment and price).
Justification of the forecast value of sales and prices.
Detailed price structure and consideration of its fluctuations in dynamics.
Determining sales prospects.
Activities to best meet the needs and requirements of consumers.
A specific list of potential buyers of products.
Sales promotion activities.
Development of several sales scenarios, depending on the possible conditions of the internal and external environment in the future period (pessimistic, optimistic and realistic plans).

Section No. 5 "Production Plan"

Among the main sections of the business plan, the production plan stands out. Here, a significant indicator is calculated as the cost of production. It is important to work out each component in more detail, namely:

Description of the technological process.
Production capacity.
Raw materials (in terms of suppliers and prices).
Labor requirements.
After-sales service level.
Environmental responsibility and measures to minimize the harmful effects on the environment.

Section No. 6 "Management Organization"

Analysis of the sections of the business plan continues with a description of the organization of management. This is all related to the functioning of the enterprise or project described in the document. Here are some points to pay attention to:

Quantitative and qualitative assessment of existing personnel.
The need to attract new employees.
Description of the organizational structure that distributes responsibility between production and management links.
Clarification on the principles of selection and training.
Approach to the formation of wages.
Salary structure and material motivation system.
Estimation of costs for management personnel.

Section No. 7 "Capital and legal form"

The next section of the business plan (investment project) describes the legal form of the enterprise, as well as capital features. Here you need to focus on such points:

Justification and feasibility of choosing the current legal form of the enterprise.
The necessary amount of capital for the smooth functioning of the organization.
The main areas of capital use.
Identification of possible sources of capital increase.

Section No. 8 "Financial Plan"

The financial section of the business plan is the most time-consuming in terms of preparation. This is a key element of the document, which gives potential investors answers to questions about the appropriateness of investing. So, the financial section of the business plan includes the following items:

A financial analysis of the state of the enterprise in retrospect, taking into account 3-5 previous years of work (not carried out for a newly created enterprise).
Analysis of the current financial situation at the time of planning and preparing a new investment project (for a newly created enterprise, a description of the current financial base takes place).
Forecasting cash flows and profits.
Assessment of the effectiveness of the project.

Based on the analysis, three documents need to be developed and attached to the business plan:

income and expense plan;
cash flow plan;
balance of assets and liabilities.

Section No. 9 "Risk Analysis"

One of the essential sections of an enterprise’s business plan is risk analysis of entrepreneurial activity. It should contain the following data:

Assessment of the degree of uncertainty regarding the achievement of planned economic indicators.
The possible time, place and financial consequences of the onset of an undesirable economic crisis indicating the most likely causes.
The list of preventive measures to prevent risks or reduce losses from their occurrence.

Principles of goal setting

When considering the content of the main sections of a business plan, special attention should be paid to goals. This item plays one of the determining roles in the process of investor making a decision on the advisability of investing. Goal setting should be carried out in accordance with the following principles:

Specificity. The results of operations should have a specific numerical expression (for example, increase sales by 15% by the end of the reporting period).
Measurability. Indicators should be measured in monetary, percentage or physical terms. For example, it can be output, market share, net profit, and so on.
Reachability. The formation of goals is carried out on the basis of available resources and existing market conditions without any assumptions.
Realism. The goal should be commensurate with the level of development of the enterprise.
Snap to time. To achieve the goals, a specific time frame should be indicated.

The list of applications to the business plan

When the structure of the sections of the business plan is observed, you can move on to the "final touch", namely, the applications. Their composition and quantity is determined based on the focus of the project and the content of the document. But the following are mandatory:

Copies of documents certifying state registration (except for newly created enterprises).
Copies of documents characterizing the work of the enterprise or the qualifications of the author of the business plan (diplomas, certificates, and so on).
Demonstration materials giving an idea of a new product or service (graphic images, diagrams, photographs).
Documents attesting to the significance of the project (data from social surveys and focus groups, results of a study of the target market segment).
A brief description of the main competitors (preferably in tabular form).
Calculations, costing, estimates, schedules - everything that relates to the financial section of the document.
Catalogs, price lists (or their approximate layouts).
Resume of a project manager or a business plan compiler.
The conclusion of examinations and so on.

Useful Business Planning Tips

Properly prepared detailed business plan is already half the success on the path to project implementation. In order for your document to impress the investor, remember some useful tips:

Do not hope to do everything in one day. And even in one month you most likely will not meet the deadlines. Approach the issue in good faith, engage in theoretical research, constantly analyze and adjust already prepared sections.
Structure records. An investor will more easily perceive a document, divided into many logical points and subparagraphs, than a continuous "sheet" of text. In addition, it will be much easier for you to work as part of a detailed plan.
Do not neglect the design. A business plan should be easy to read, which means it should be printed in large enough font (12-14) with sufficient line spacing (one and a half). Charts and graphs are best done in color.
Read a few other business plans. Analyze these documents. Highlight what you like and dislike. The conclusions made must be put into practice.
Start with the simplest. Be the first to formulate the section of the business plan in which you are well versed, in the framework of which you have ideas and best practices. Build the remaining sections on the basis of the base.

The main sections of a business plan, its role and purpose