Do you need to start a business, apply for funding, or grow your current business? Then you know that a business plan is one of the first things you need. It is a document that describes everything about your business, its offerings, and its customers. It may sound complicated but in reality, it’s not something you’d need a business or accounting degree to write. Here's a simple guide with seven elements that will help you write one. 

1. Executive Summary

This is an overview of your business and the plans you have. It should briefly describe the problem that you are solving, how you are planning to solve it, and why it should be solved. It is usually referred to as the elevator pitch, as most businesses rely on the executive summary to grab the attention of potential investors. Failure to do so may make your entire plan fail, regardless of how well researched and presented it is. It can also include a description of your team and financial requirements if you're applying for funding. 

2. Market Analysis

Market analysis or competitive analysis is the perfect opportunity to showcase all the information about your potential customers. This includes describing the target market as specifically as possible and analyzing the growth of the business and the competition you are likely to encounter. 

For a business plan to be effective, you must be able to provide tangible data and information to demonstrate to potential investors and partners that the market trends support your business. 

3. Organization and Management

Investors require entrepreneurs with great ideas and the technical ability to deliver on goals, so they want to understand how you and your management team will execute business tasks effectively. This is the part where you describe your current team and list the qualities of your prospective employees. 

You can also include brief bios of your team members to show their experience and what they bring to the table. A business structure is also crucial at this stage to let the investors know that the business is in safe hands. 

4. Products and Services

When developing a business plan, you need to clearly explain the products and/or services that you are planning to address with your business. You should take the chance to highlight why consumers need the service or product, how it will address their needs, and what is unique about it. Here is where you can also outline your competition, that is, similar businesses that offer the same products, and why yours will be hard to replicate. 

5. Marketing and Sales

After reviewing your products, the business plan also has to expand on your marketing and sales plan. This details how you intend to reach the target market and make them aware of your product, your pricing strategies, and the partnerships you need to make to get the products and services to the customers.

6. Funding Request

The funding request section outlines the future funding requirements of your business. You need to provide information about the company’s future in terms of funding requirements at various phases and the different sources of capital. Usually, limit the time scale to the next five years, especially when you're starting a new business. 

7. Financial Projections

This is the part that most entrepreneurs find daunting, but it doesn't have to worry you. Your financial plan should include sales and revenue projections, profit and loss statements, cash flow statements, and balance sheets. It is usually based on assumptions according to the industry you are in. The more you keep your projections realistic, the more you are set up for success. 

Appendix

The appendix in a business plan is not an essential component. However, you can use it to provide supporting documentation for the other essential chapters. It is also a great place to include tables or charts you couldn't fit in the main body.