What are the elements of a business plan?
A business plan is an extensive document, so it isn’t always obvious to start one.
A business plan doesn’t have a fixed structure, but usually there are recurring elements. Below you will find an overview of 5 elements that you should definitely include in your plan:
- Main activity & elevator pitch
- Mission, vision and strategy
- Market and competitive analysis
- Marketing plan
- Financial plan
Tip: It’s not easy to start writing a business plan straight away. First elaborate on your business idea using a business model canvas
Main activity and elevator pitch of your business
What is your main activity that your business is going to focus on? It’s important to make that crystal-clear. Also practice your elevator pitch, or how to present your business in 30 seconds - the equivalent of an elevator ride.
Objective of your business
Consider the following questions in this section:
- What products or services will you offer?
- How do you see this evolving?
- Broadly speaking, where do you see your business in the short and long term?
Provide a clear description of your idea and plan. If you explain it briefly, we will get to the elevator pitch. This is how you set up a strong elevator pitch
Mission, vision and strategy
By means of your mission, vision and business strategy, you can clearly express why customers are choosing you, and not a competitor. However, these terms are often used interchangeably, but we will explain them for you:
Difference between mission and vision
Do you know the difference off the top of your head? These terms are very often used interchangeably. Your mission is the raison d'être of your business: how do you want to make a difference in society? Your vision is an extension of that but in the shorter term, over 3 to 5 years. In your vision, you make your mission much more concrete by linking it to objectives.
Your business strategy
Just as your vision is a more concrete manifestation of your mission, your strategy is to turn your vision into an action plan. How do you want to realise your vision (and mission)? Think of SMART objectives in the short and medium term.
Here are a few examples:
- Achieve a turnover of 60,000 euros in 6 months.
- Be able to sell your product in 24 shops within 1 year.
- Recruit a first employee in 2 years
Carry out a market and competitive analysis
No matter how one looks at it, a market and competitive analysis is a lot of work. The former focuses on whether your business has a place in the market, and the latter on how your competitors do it. If you have no competitors, either you have found a market niche or it isn't a viable activity. It’s only by carrying out the necessary research that you will find out.
Market analysis questions:
- Is there a market for your product?
- Are consumers ready for your idea?
- Can your project be profitable?
Competitive analysis questions:
- Which other players are on the market?
- Why are they competitors?
- How do you make a difference?
The answer to both analyses will influence your business plan, as you may discover new opportunities or factors which set you aside from competitors. Either way, you get to know your market and sector better, and that's an added value.
Tip: In addition to researching potential customers or competitors, spend time with suppliers.
Draw up a marketing plan
In this section you will examine the following question: 'How are you going to position yourself in the market and attract your first customers? Explore where and how you are going to offer your services or products. You are actually going to make your strategy a little more concrete.
It goes without saying that a good market and competitive analysis is the basis for a sound marketing plan.
5 P's of a marketing plan
A common expression is the 5 P's:
- Product (and/or service): write down in detail what you do, down to packaging and/or warranty.
- Price: what price do you charge and how do you arrive at it? Include all your costs (overhead, production, ...).
- Place: where do your customers come across your product or service?
- Promotion: what message are you going to use to address your customers? For example, will you advertise (online)?
- Personnel: which tools do you need to offer your product or service, and how does that fit in with your costs?
Besides your financial plan, your marketing plan is the item you will most often need to adapt.
Drawing up a financial plan
It’s an important item, and probably the first one a bank or potential investor is going to look at.
Answer these questions:
- What turnover do you expect?
- What are your costs?
- How do you think turnover and costs will evolve over time?
Other things you can include are possible support measures, how you are going to organise your bookkeeping (think of possible machine depreciation, ...) and how much money you actually need to turn your plans into reality.
You will need to update your business plan regularly, just like your marketing plan. Having a good overview of your business’ financial situation is the basis of entrepreneurship. You should always be able to say how much profit or loss you make.
Would you like more information? Read more about drawing up a financial plan.
A business plan is the blueprint of your company. It involves a fair amount of time and effort to create, but it will save you from many headaches during the course of your business.
