A business plan as we saw in our earlier post is a blueprint that helps entrepreneurs to be better caretakers of their businesses and today we’ll look at some of the basic elements of a business plan that you can include when coming up with yours.

Given that I wouldn’t want to mislead you into thinking that a business plan should only be prepared when starting a business, let’s first take a minute or two to look at when you should prepare a business plan then we’ll proceed to look at which the basic elements of a business plan are.

Basic Elements Of A Business Plan: When To Prepare A Business Plan

1. At Start-up
2. During business expansion
3. When applying for a loan
4. When evaluating business performance

Basic Elements Of A Business Plan #1: Executive Summary

It’s normally the part last after the other parts/chapters of the business plan. It consists of a summary of the other chapters from the Business Background to the Action Plan

Basic Elements Of A Business Plan #2: Business Background & Objective

This is where you give the name of your business, location of your business, products and services that you provide to your customers, characteristics of your products and/or services and the business history.

This is also where you list the objectives of your business.

Basic Elements Of A Business Plan #3: Marketing Plan

This is where you list data about your target market, market share and competitors (along with their strengths and weaknesses)

You also need to come up with a marketing strategy e.g. pricing, product mix etc.

Basic Elements Of A Business Plan #4: Organization & Management

Here you can draw a chart showing the organizational structure of your business as well as other factors pertaining to its management e.g. academic qualifications, remunerations, staff benefits and incentives just to mention a few.

Responsibilities and duties should also be clearly defined here.

Basic Elements Of A Business Plan #5: Production Plan

This is where you list all the products, materials, equipment and other things that are required for the operation of your business.

You should also give the costs of everything you need plus how the production process will take place.

Basic Elements Of A Business Plan #6: Financial Plan

This is where you need to give:

• The total capital required for the running of your business plus a breakdown of how you’ll use it e.g. innovations, rent, legal fees, insurance costs, utility bills etc.
• Your monthly expenses
• A projection in terms of income and expenditure e.g. a monthly, annual or 3 year projection
• A projected cash flow e.g. for 3 years
• A projected balance sheet e.g. for 3 years

Basic Elements Of A Business Plan #7: Crisis Risks & Planning

This is where you need to give the solutions to identified problems. Make sure to leave no stone unturned 🙂

Basic Elements Of A Business Plan #8: Action Plan

This is where you can have a table showing the activity and number of hours that you intend to work on your business e.g. during the first three months, I’ll work on product creation etc.

Basic Elements Of A Business Plan #9: Appendices

This is where you give a brief reference of what is contained in your business plan e.g. key points to note, explaining the words used in a given chapter etc.

My Take On The Above Basic Elements Of A Business Plan

The above basic elements of a business plan are mainly meant to guide you as to how you should go about writing a proper business plan that touches on the key aspects of what your business is about and how you intend to make it a lasting and successful brand.

It would however be good to note that although there are variations to the above basic elements of a business plan as compared to other formats of a business plan that you might come across, there are some key elements of a business plan that should never miss from yours e.g. the Executive Summary, Financial Plan etc.

If you found value in the above post on the 9 basic elements of a business plan, then please leave a comment below and don’t forget to share 🙂

(Basic Elements Of A Business Plan/Elements of a Business Proposal: Images above courtesy of Freedigitalphotos.net)