Four main components of a business plan

The following assumptions also are needed for our example. Be sure to read all assumptions since they will be referred to as we explain the components of the balance sheet. Assumptions For Our Example:

Four main components of a business plan

Your business model describes the way your company makes money. The products or services that you offer bring in revenue, and your business spends some of this income to create those offerings, and also to pay for its infrastructure, including rent, utilities and taxes.

If you're running your business successfully, you'll have some money left over at the end of the day for personal income. The components of your business model cover the different phases of earning money, spending it, and netting a profit.

The Products You Sell The products you sell are at the heart of your business model.

four main components of a business plan

Whether your company manufactures soap or slings fast food, you must offer something your customers can buy. It must have sufficient value or perceived value for them to be willing to pay, and their user experience must be positive enough to generate repeat sales and word of mouth interest.

Because business and customer needs evolve over time, a successful business model will focus not only on specific tangible deliverables, but also on the general need or niche.

As music technologies have evolved from vinyl, to compact disks to digital downloads, the companies that have survived and succeeded have focused on the musical content itself rather than any specific method for delivering it.


The Money You Spend Your business must spend money to make money. Your expenditures include direct costs, or purchases that go directly into the physical product your customers purchase. They also include indirect costs, or other expenses your company incurs for operations, such as payroll accounting and business licenses.

Creating a successful business model requires margins that keep all of these costs low enough for you to earn a profit, but not so low that you compromise quality. Managing costs includes identifying reliable sources of essential materials, keeping inventory at sustainable levels and proactively arranging finance strategies so your company has the capital you need and you don't incur high interest charges.

four main components of a business plan

The Systems You Use Your business model relies on systems to keep your company running smoothly and profitably. Your systems represent the collective intelligence that makes your products worth buying and your operations efficient and smooth.

4 Key Components of a Successful Business Continuity and Disaster Recovery Program

Successful systems reduce waste and keep payroll affordable by using employee time as effectively as possible. Operational systems that can contribute to successful business models include closed loop production, which aims for zero waste, and lean manufacturing, which keeps inventory levels as low as possible.

Quality control is an important element of business model operations as well. It ensures that your products are well made, consistent and safe.

References 2 Future Enterprise: Business Model Innovation Series 4: In she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative.

She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.SAMPLE BUSINESS CONTINUITY PLAN PREFACE The purpose of this plan is to define the recovery process developed to restore [your compnay]’s critical business .

There are seven major sections of a business plan, and each one is a complex document. Read this selection from our business plan tutorial to fully understand these components. § Implementation of Texas Essential Knowledge and Skills for Transportation, Distribution, and Logistics, Adopted (a) The provisions of this subchapter shall be implemented by school districts beginning with the school year.

I think Rich’s overview is very good. For people looking at joining, I think one extra piece of advice that I gave my younger brother several years ago when he was first looking to join a “big 4″ firm (or “big 5″ as it was then).

For a startup business, creating a business plan is like creating a game plan in sports. You need to scout out all the information to create a winning strategy for the game. While business plans. A business plan is a detailed blueprint for the activities needed to establish a business (i.e.

the details of a product or service, the market for that product or service, and the management of the business providing that product or service).

How to Write a Business Plan for Farming and Raising Livestock