12 Components of a Business Plan 1. Executive Summary In executive summary its context is the entire summary of business plan. But it only can be compiled once the business plan is finished. It gives a short overview about the basic contents of the plan, and the most important details. 2. Founder and Business Leadership An important component of the business plan is the introduction of the founder(s). It is important to point out why this person should lead the business to success. 3. Product or Service The product (or the service) is the heart of any company. Characteristics and stages of development should be listed in the business plan. What makes the product one-of-a-kind, what is its socalled unique selling proposition? The product description should be easily understandable, even for laypersons. 4. Market and Sector A competent business founder should have a keen sense of the market and the competition. If you only see as far as your own nose, you will not get far. A market analysis is indispensible. Not only should you be aware of your competitors, you should also know your customers well. The easiest method of getting to know your potential customers is a survey or the questioning of other businesses of the sector. 5. Distribution and Marketing This is one of the most important points of the business plan. You can therefore divide distribution and marketing into offer strategy, price strategy, distribution strategy, and marketing strategy.The product offer is critical and presents an opportunity to set yourself apart from your competitors. The business plan should stress the difference between you and your competition and what makes your product special. Your strategy for further development should not be missing here. 6. Co-workers and business coordination Your business plan should outline your overall orientation regarding organisation: is there a strict hierarchy or do you prefer project teams? Where lie the responsibilities? The choice of co-workers and the suitable job description needs to follow accordingly 7. Legal Form A good business plan should also contain explanations about the chosen legal form of the company. 8. Chances and Risks The risks, but also the chances are the most interesting parts of the business plan for investors, loan creditors, and bankers. Risks are naturally a delicate topic. However, if you are honest and mature about them 9. Capital Requirement The seed capital has to come from somewhere. No one founds a business without any resources. In most cases, the equity capital is not enough. The business plan should therefore show, which capital goes where and for what it is used. 10. Finance Plan The finance plan is likely the most complex component of the business plan, because it is not easy to show where the money comes from, where it goes, and for what it is used. The equity capital is one component of the finance plan. The amount you contribute should be noted in the business plan, as banks appreciate it when personal resources support new-business loans. 11. Further Documents You should complete your business plan with other relevant documents, such as a CV, surveys, or drawings. 12. The Right Measure Many business plans are too extensive, as the authors (the business founders) believe they need to describe every small detail extensively. You should not lose yourself in flowery phrases but make precise statements. It is helpful to let friends, who are strangers to your line of business, read your business plan.
