Components of a Business PlanFor most business owners, the thought of drafting a business plan sounds like paperwork—something you should do, but just can’t get excited about because you have a business to get off the ground or run.

However, a business plan should be exciting. Why? Because it can be a roadmap that leads you more quickly to the path of success. It allows you to run your company with a complete and cohesive vision, and it is how you will drive the future growth of your business.

How exactly does a document play such a key role in guiding your business? Let’s start with the basics.

Why Have a Business Plan?

Having a business plan sparks action. For one, it forces you to consider all aspects of your company, which means nothing will get overlooked and ignored. When you begin digging into all the information included in a business plan, you’ll uncover factors that demand to be addressed, including your mission statement, value proposition, customer personas, marketing assumptions, operations plan, financial plan, employment plan, and more. A business plan also helps ensure you’ll be prepared for anything because it will point out layout a plan of action to tackle problems before, during and after they occur to avoid serious disruptions and pitfalls.

Are you a goal-driven person? Business owners usually are, and a solid business plan will create and set goals for your business. You can use it to monitor progress, hold you and other stakeholders accountable, and ultimately help control the fate of your business.

When the time comes to secure equipment financing, a well-written business plan is an absolute must. Equipment financing lenders need to see clearly the pathway to your success because they’ll want to evaluate their risk. When the time for financing equipment to further business growth comes, you’ll be glad you have one ready to go versus having to fit developing one into your already busy schedule.

A written record of your company goals—paired with a track record of delivering against those goals—will let equipment financing lenders know that you fully understand your business and industry and will be able to deliver the results that you’re promising. Equipment financing lenders want to know that you’re serious and have thought out and planned your business strategy.

What are the Major Sections of a Business Plan?

Now that you understand why a business plan is crucial, you need to know what to include in the plan. Generally, there are seven components of a strong business plan. These include:

  1. Executive Summary – An overview of your business, which includes the most important ideas from the other sections.
  2. Business Description – An explanation of what your business is and what it does. Location, year founded, and other details should be included.
  3. Market Analysis – A description of your market as a whole, where your business fits within it, and why you feel your company is superior to competitors.
  4. Organization Management – The bios and experience of your impressive leadership and/or management team.
  5. Sales Strategies – An explanation of your current and future marketing plans, and how you plan to generate revenue.
  6. Funding Requirements – A presentation of the amount of money required to fund the business (and essential equipment).
  7. Financial Projections – A summary of your successes up to this point, including forward-looking projections.

Each of these sections are extremely important when writing your business plan. They’ll help you as your business progresses and grows day by day, and they will also come together to form the clear concept and vision that will help secure potential equipment financing lenders, like Global Financing & Leasing Services.

Having a business plan is absolutely necessary for any business. If you haven’t started yours yet, the time to do so is well before your business requires financing for equipment.