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Running head: ELEMENTS OF A BUSINESS PLAN 1

Elements of a Business Plan

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Institution of Affiliation

ELEMENTS OF A BUSINESS PLAN 2

Q1A: When starting a business, it is important for the entrepreneur to have a business

plan. The business plan forms the roadmap of the business (Hofer, 2016). Every business plan is

made up of elements which are unique to it and depending on many things such as the nature of

the business. However, in a general view, there are important elements of a business plan that

must be present and are universal to any business plan regardless of its nature. The most

important elements of a business plan include company description, an executive summary,

competitive analysis, market analysis, management and organization description, marketing plan,

the source of capital and financial projections.

Q1B: The executive summary provides a synopsis of the whole business plan. The

summary should be appealing and provide a description of all the information in the plan in brief

so that interested parties such as investors are able to have a general idea of the whole project

and make up their mind on finding more details in the document (Gordon, 2016).

Company description provides detailed information concerning all the components that

make up the company. This section is important as the reader is able to have a general idea about

the company including its location and the mission and vision of the business.

Market analysis part of the business provides information concerning the company's

activities in an area. It provides the potential market for its products and the gaps that the

company targets to address for that particular products and services (Baliga, 2015). Information

about the feasibility and viability of the business and why one can invest in such a business is

also provided in this section.

The management and organization section of the plan provides details concerning the

management structure of the new business. The section provides information on how the

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business will be run and who will be the decision makers and the processes to be followed in

making such decisions.

A marketing plan is an important component since it provides an outline on how the new

business will reach out to its potential customers. This part provides the exact methods that

would be used in attracting and retaining customers for the product. In addition, this section is

important to the investors as it can convince them that the company is capable of achieving its

objectives of selling the products and services to the potential customers.

The source of capital section provides information and details of how the business will

get funds to start and operate. It is in this section that the entrepreneur provides information of

whether the business will needs loans, investors or any other capital avenues (Baliga, 2015).

Also, the section provides information on how the business plans to repay any loans provided.

The financial projections section provides information about the plans and aspirations of

the company. It provides a framework for the projected achievement and this section attracts the

investors and it provides information on the return on investments formulas.

Q2A: Other components that should be a business plan for the sake of investors'

attraction include competitive analysis, a breakdown of the company products, and sales strategy

among others (Hofer, 2016). This component provides information that is needed to ensure that

the investors are convinced and ready to provide the much-needed funding. For example, the

competitive analysis provides information on how the company will have a competitive

advantage over the rest of the competitors and therefore control the market hence making sales.

Additionally, the sales strategy provides unique information on the methods that the company

will use to supply its products to the customers making it have more sales than the rest of its

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competitors. This information is important as it is of interest to the investors whose main goals is

to invest in a company that will provide returns for the capital invested.

Q3A: Accurate financial data is very important in a business plan and it provides

information concerning the expected financial performance of the business.

Q3B: The data should be accurate so that it provides the true reflection of the expected

profits and losses for the company for a certain period of time (Gordon, 2016). Through the

financial data and estimations, the company performance and any difficulties can be foreseen and

plan to alleviate such put in place. Moreover, the company financial position can be projected

using the data.

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References

Baliga, A. J. (2015). Business Plan-The Secret to Success. The International Journal of Business

& Management, 3(4), 210.

Gordon, J. M. (2016). A Business Plan for the Growth-Based Venture.

Hofer, C. (2016). The Evolution of Business Plans in International Business Plan Competitions.

In Models of Start-up Thinking and Action: Theoretical, Empirical and Pedagogical

Approaches (pp. 145-211). Emerald Group Publishing Limited.

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