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July 17, 2011

Components of an Effective Business Plan

You have to look at the ten areas of a business plan not only as a part of your due diligence, but also as a chance to grab the attention of investors. Each area has a special goal in mind.

Executive Summary: This is the lure of your business plan. This areas in a short summary describes your product, the market size, the market demand and you business’ ability to supply that demand. The most effective executive summaries make investors want to read the remainder of the business plan.

Click here to download your business plan template <==== Company Analysis: Your chance to put your achievements in the spotlight. This is the history of things that you have accomplished that can prove that you business or executive team have done during a previous executed plan. It also talks about your company's unfair competitive advantage. Industry Analysis: This proves that you know all there is to know about your industry. The includes the many different overlapping areas that your company might compete in. Put in any industry figures from credible data resources and trends. Be very specific when providing this information. Customer Analysis: This is an outline of your customer relationships. In this section you must prove that you really know your customers better than other people do. Put in stats about the niche, demographics and other information that is helpful . Competitive Analysis: This proves that you know all about your competition. Your competitors are not only public companies that do business in your niche. Your real competitors are the ones who are able to supply a customer need the same way that you can. Also emphasize the pros and cons of your competition. Marketing Plan: The four Ps of product, promotions, price and place are in this section. Completely explain your product, how you are going to market the product, the pricing, and the channels of distribution. Be very specific and show investors that you know how to get your product directly to your customers. Operations Plan: A description of how you will help your customers. Put in the everyday activities of your company. Put in the dates of future product releases, income forecasts, venture partnerships, new customer contracts, future funding rounds and IPO and employment news. Also, this is where investors will want to see the context for payouts for their investment. Click here to download your business plan template <==== Management team: This is the backbone of your company's success. Put in the biographies of your executive team members and the Board of Directors. Put in previous achievements that show their ability to act on the plan and build up the company. If there are holes in the executive team that are important to the beginning stages of the company, plug them up before finishing your business plan. Financial Plan: Investors will pay most of their attention to the financial area of your business plan. It show how your company plans to reward them. Your statement of future projections has to have dates that you will be entering the market, operating margin, employee numbers, acquisitions, mergers and IPOS. Make sure that your projections are realistic. Business Plan Appendix: Extra documentation. This section supports the claims that were made in the executive summary, financial plan, and the rest of the business plan. Put in the graphics, patent information, customer letters, partner letters, competitors and important customers.

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