For the success of your business it is crucial to know the answer to the following questions:

• What is needed for your business to exist?

• How much money is needed to start your business?

• Who will be your customers and how will you attract them?

• Will you be able to compete with already existing businesses?

• What are your plans for your business?

And to answer those questions, the best solution is to create a business plan. 

A business plan is an extremely important strategic instrument for an entrepreneur, which points out potential weaknesses and ensures the realization of the short-run and long-run goals of your business. In addition to that, an effective business plan has a critical role in the process of acquiring finances for your business and gives business owners the opportunity to evaluate the value of the initial capital.

A business plan can have many different forms, however, all kinds of business plans include the following elements: 

1. Resume

2. Description of the company

3. Market analysis

4. Analysis of competitors and their positioning in the market

5. Description of product or service

6. Marketing strategy

7. SWOT (Strength, weaknesses, opportunities, and threats) analysis

8. Operational plan

9. Management and staff

10. Financial plan and the discussion of the budget with financial documents/tables

To make sure that your business plan is efficient, it is important to discuss every component individually.

1. Resume

A business resume consists of two main parts. First of all, try to give the information about the following topics to the reader shortly and clearly:

• Company name

• The organizational and legal structure of your company (for example, indicate if your company is a sole proprietorship or limited liability company)

• Business owner/owners

• Contact information, if needed

• Date of the project 

Following that, the major part of the resume should be a short description of the project. It would be easier to write the resume part after the general business plan is written to ensure that the resume includes all the important aspects and sums up the whole document. Generally, a resume should not be more than two pages long and must include a very short explanation of all parts of the business plan. 

2. Description of the company

The major elements of company description are the mission and the vision of the business. Exactly, those two statements emphasize the identity and goals of your business. 

The efficient presentation of a company's vision makes it easier to communicate the values of the company to investors, employees, and customers. The vision statement points out the long-term goal or target of the company. For example, Microsoft's initial vision was “computers in all offices and houses”.

While the mission of the company should depict the strategy of the business in a direct and short manner. It must present the major goal of the company and the target customer base of its product or service. Establishing a mission of the business at the beginning phase makes it much easier for the company to plan its operations accordingly.

At the same time, it must also be taken into consideration that the mission and vision statements should be both realistic and ambitious. While the business plan should indicate all the steps that the company is willing to take to reach its long-term targets. Despite that, be ready that as the business develops you will have to overlook and broaden your mission and vision. 

Apart from that, while describing the company it is important to inform the readers regarding the governing board of the company. For example, presenting some facts about business owners and managers (in form of CVs) can also benefit the company during the process of acquiring credit for the business, as the experience and knowledge of the business owner can convince the investor/lender regarding the success of the business. This can additionally increase the chances of receiving funds for your business. 

3. Market analysis

Before starting the business, it is extremely important to analyze trends in the market. The market analysis will help you evaluate current opportunities, which will, in turn, give you the ability to use those opportunities to increase the chances of business success. 

While developing a business idea, try to look at your product or service from the perspective of the customer to make sure that your business really fits the interests and preferences of the customers. Market analysis is the major instrument for answering that question. After conducting an effective market analysis, you would know the needs of the customers, which will assist you in developing your business idea and utilizing already existing opportunities.  Moreover, you would be able to understand the challenges and threats prior to entering the market, which will prepare you for potential problems throughout the operation of the business.

In addition to that, to ensure that your product is demanded on the market, you can carry out primary research (for example short survey of potential customers) and analyze the results. It is also an option to create the prototype of your product and launch it so that you will be able to improve your product or service according to the feedback of the first customers. That practice is very common. For example, beginner manufacturers of food products often organize degustations and observe the responses of the customers. Additionally, to make sure that the potential customers receive information about your product or service, you can utilize the events or locations, where they generally reside. In the case of food products, one of the places where you can introduce your product are so-called food market events. It must also be noted that receiving public feedback may even benefit your business development pace. 

4. Analysis of competitors and their positioning in the market

Analysis of competitors makes your business plan much more effective. After evaluating the products or services provided by your potential competitors, you would be able to distinguish how your product is different from others and how you improve customer experience. Above mentioned elements make the success of your business more convincing for the investors.

If you plan to offer a product, which is already available on the market, it is fairly crucial to show how competitive is your price, how are you planning to decrease the costs of production and make the business processes more effective. In this part of the business plan, you should also discuss what are the advantages of other businesses in the industry and try to explain the development plan of your business in that aspect. 

5. Description of product or service

In this part of the business plan, you must describe what kind of product or service you are offering to customers. Try to point out how your product satisfies the needs and desires of the target audience. 

Additionally, present the price and quality of your product. Apart from that, you could also discuss how different the quality or price of your product is from others. This part of the business plan can also be used to describe how your product is going to be delivered to your customers and how the packaging will look. For example, if you plan to use delivery services, explain how suitable your packaging is for transportation. For persuasiveness, you can include the product’s prototype pictures. 

6. Marketing strategy

A marketing plan will help you manage your business activities in a more efficient way, including informing the customers efficiently. Here, you should evaluate the already existing marketing situation in the industry, develop a marketing strategy and working programs, where you will also discuss the budget of the above-mentioned activities. 

Try to choose the customer segment correctly and only after that choose the marketing plan, which is most suitable for targeting them. Classification and segmentation of your potential customers will make your sales processes more efficient as you will be able to provide them with information about the product, create advertisements according to their preferences and use digital marketing tools to reach them.

While writing a business plan, including the marketing strategy in the project will present how you plan to reach your audience to potential investors. It must be noted, that without a well-defined marketing strategy the rate of success of businesses will decrease significantly, as the risks, challenges, and chances of failure increase, when the business is not ready for them. Finally, note that in this part of the business plan, one of the most important aspects is choosing the target market correctly, otherwise businesses will not be able to effectively sell their product. 

7. SWOT (Strength, weaknesses, opportunities, and threats) analysis

SWOT analysis is one of the crucial elements of the business plan. With the help of the  SWOT analysis, you will be able to correctly understand the strengths and weaknesses of your business and evaluate future opportunities and possible threats. 

While speaking about strengths, you can point out major advantages of your business and after understanding your business’ weaknesses, explain how you are going to address them to avoid future problems and decrease risks of failure.

Apart from that, in this part of the business plan, you have to realistically evaluate opportunities and threats that can be seen in the industry. For example, currently, another wave of restrictions related to tackling the COVID-19 pandemic is one of the major threats of the businesses that can be considered in SWOT analysis. 

8. Operational plan

The operational plan includes the whole chain of the production cycle, from the beginning of the product creation until reaching the audience. Thus, it is important to show how are you going to manage all the above-mentioned processes. 

The effective business plan must include the resource (including human resources) management strategy. This part of the business plan will make the issues related to business management clear and prominent. Apart from that, showing that the business is conscious of its resources and has a plan on how to use them, makes the success of the business more probable. 

9. Management and staff

A considerable part of investors and creditors think that the introduction of the strong management of the business plays a great role in evaluating the potential of the business. 

In this part of the business plan you can describe the structure of the enterprise:

• Managing team, their major responsibilities, and duties

• Number of employees

• System of training and incentivizing staff

• Budget for salaries

It must be noted that formulation and presentation of the structure of the business, will make it more clear and simple to manage business operations. 

10. Financial plan and the discussion of the budget with financial documents/tables

Financial projections and estimates help business managers, investors, and creditors in better evaluation of the business success potential. When trying to acquire external financing, financial analysis acts as one of the most crucial parts of the business plan.

A business plan must include a balance sheet, income statement, cash flow statement, operational budget, and break-even-point analysis. All of those components play an important role in ensuring the successful operation of the business. Apart from that, financial analysis helps you understand from which point your business will become profitable. 

Take into consideration that the projections must be as realistic as possible. Try to avoid extremely positive assumptions and work attentively on financial analysis. If needed, you can also use the services of professionals, as they will help you analyze the potential of your business more thoroughly and realistically evaluate the income and costs. It must also be noted that professional-looking financial documents will increase the chances of financing. 

Finally, it must be mentioned that all components of a business plan should be realistic, research-based, and convincing. Consequently, you will be able to effectively provide information about your business idea and plan to all interested parties. Apart from that, an effective business plan will increase the chances of acquiring funds and ensure the readiness of the business against future challenges and difficulties.