Business Plan

A business plan sets out key aspects of a business and how the owners intend it to develop
The main aim of producing a business plan is to reduce the risk associated with starting a new business and help the owners to raise finance
- Producing a business plan forces the owner to think about every aspect of the business before they start which should reduce the risk of failure

Common Elements of a Business Plan

Having carried out research to support the plan, the business will be well-informed about the potential problems and chance of success and can select the most appropriate source of finance based on this information
A well-written business plan can help a business to obtain finance
- Lenders (e.g. banks) and other investors will be able to explore the plan and make an informed decision about whether the business is credible and worth the financial risk
- Investors (e.g. venture capitalists) will use the business plan to explore whether there is an opportunity to increase the value of their investment and make a worthwhile profit
- The business, having carried out research to support the plan, will be well-informed about the potential problems and chance of success and can select the most appropriate source of finance based on this information

A business plan should be a regularly-updated working document
- As the business grows plans are likely to change as it faces new threats and opportunities

Key Elements in a Business Plan

Element

Explanation

Executive Summary

This section provides an overview of the business idea, its unique selling proposition, target market, and financial projections
- It should be concise yet compelling enough to grab the reader's attention

Company Description

A description of the business mission, vision, and values
Information about the legal structure, location and any unique advantages or intellectual property the business may have

Market Analysis

A thorough analysis of the target market including its size, growth potential and key trends
Identification of target customers and their needs
A competitor analysis to understand their strengths and weaknesses

Products or Services

A detailed explanation of the products/services the business will offer, highlighting their features, benefits and any competitive advantages they may have

Marketing & Sales Strategy

A description of the intended marketing and sales approach including marketing channels, pricing strategy and promotional tactics
A description of how customers will be attracted and their loyalty captured

Organisation & Management

An overview of the organisational structure of the business and the key members of the team including their qualifications, experience and responsibilities

Operations & Implementation

A description of how the business will operate on a day-to-day basis including the production process, stock management and any key partnerships or suppliers

Financial Projections

A detailed financial forecast for the business including projected income statements, balance sheets and cash flow statements
An outline of funding requirements and any existing or potential sources of finance

Risk Analysis

A consideration of the potential risks and challenges the business may face and the intended strategies for mitigating them

Business Plan (SL IB Business Management)