Although a business plan must be tailored to suit the specific industry or company, there are elements that are common to all business plans:
This includes personal data of the company.
Table Of Contents And Table Of Appendices
Complete index with sessions and sub-sessions.
Executive Summary : The most important part, as it is the first section to be read by possible partners and investors. It should include the marketing plan as well as give some expected profits and revenues.
Body of Business Plan
- Background and Purpose – Brief history of the company, current status and business objectives
- Market Analysis – Analyzes the market in which the company acts, competitor and sales forecast
- Product or Service Development – Addresses issues of quality, productions and copyrights
Information concerning the marketing strategy, including the overall marketing strategy, pricing, sales tactics, advertising and promotion
Includes key points, such as location, facilities and improvements, strategy and plans, as well as labor force
Organizational Structure And Management
Asserts the professionals involved internally with the company and how their roles are divided
Data that is commonly found on a balance sheet plus some ratios and expectations.
Writing a business plan is not intuitive. Sometimes it is hard to know where to begin, with which information to proceed, and what is most relevant. Therefore, a few suggestions could help you get started. The figure below summarizes the process of the first steps.
As mentioned above, it is important to include and consult with many individuals when writing a business plan since it is not a sole person’s task. You may consult with professional consultants, partners, lawyers, accountants, friends and family.
The question arises, though, as to whether your team of peers should consist of like-minded or diversified-thought individuals. Make no mistake: times are tough, the markets face daunting challenges, and superficial business plans will not be as effective. It follows that you will need more diversity at the table, so that you can see the picture from a 360-degree angle. It does not mean diversity strictly in terms of gender, race, ethnicity or sexual orientation, but rather the diversity of thought that can come only when people with vastly different backgrounds and perspectives come together and look at familiar problems in new ways. This means people with varied experiences, individuals from various groups, men and women with different skills, outlooks and perspectives. They might notice a flaw in the business plan that was missed and bring a solution from their perspective.
Keep in mind that your “company’s face” is your business plan at this stage. It will be viewed by people from a variety of backgrounds and you will target it to appeal to them all.
You should also try to avoid the dangers of “groupthink” – the decisions born of groups too similar in background to establish an effective business plan and write it accordingly. Gathering a more diverse team can enable a group to address changes needed, and approach difficult problems in creative ways.
Having presented the reasons to use the aid of a diversified-thought team, it is valuable to keep in mind that an entrepreneur should have a clear structure in mind of his/her business plan. You should use the ideas presented by peers and consult with them, but in moderation. Your vision is essentially what should guide the composition of the business plan.
Depending on your main purpose, your business plan will take a different form. Business plans are also called strategic plans, investment plans, expansion plans, operational plans, annual plans, internal plans, growth plans, product plans, feasibility plans, and many other names. These are all possible business plans.
In all these different varieties of business plan, the plan matches a specific situation. Consider the scenario: you are developing a plan for internal use within the company only, not for sending out to banks or investors. Consequently you may not need to include all the background details that you already know. Description of the management team is very important for investors, while financial history is most important for banks.
A frequent question that arises concerning a particular type of business plans is its length. The length of a typical business plan document will vary from 10 to 100 pages. Ultimately, of course, it depends on the intended use of the plan and its audience. An internal business plan for your company will exclude areas such as management team experience, though it will elaborate more on the implementation of goals. A basic plan will usually amount to 20 or more pages, including the financial data. As a general principle, the executive summary should not exceed three pages and a summary with all the key points should stay brief, with approximately two pages. Remember, the business plan should be concise and precise so as to be used as a working document.
A Start-up plan is the most standard business plan, which defines the steps for a new business. It covers standard topics including the company, product or service, market, forecasts, strategy, implementation, milestones, management team, and financial analysis. The financial analysis includes projected sales, profit and loss, balance sheet, cash flow, and probably a few other tables. The plan is a blueprint for the company that starts with an executive summary and ends with appendices showing monthly projections for the first year.
An Internal plan is not intended for outside investors, banks, or any other third parties. It might not include detailed description of the company or the management team. It may or may not include detailed financial projections that become forecasts and budgets. It may cover main points as bullet points in slides (such as PowerPoint slides) rather than detailed texts.
An Operations plan is normally an internal plan, and it might also be called an internal plan or an annual plan. It is generally more detailed in the sections of specific implementation milestones, dates, deadlines, and responsibilities of teams and managers.
A Strategic plan is usually also an internal plan, but it focuses on high-level options and setting main priorities than on the detailed dates and specific responsibilities. Like most internal plans, it might not include different sections such as company descriptions, detailed financial projections etc.
A Growth plan (Expansion plan or New-product plan) focuses on a specific area of the business, or a subset of the business. These plans could be internal plans or not, depending on whether or not they are being linked to loan applications or new investments. For example, an expansion plan requiring new investment would include full company descriptions as well as a start-up plan for investors. An internal plan, used to set the steps for growth or expansion funded internally, might skip these descriptions, but should at least include detailed forecasts of sales and expenses for the company.
A Feasibility plan is a very simple start-up plan that includes a summary, mission statement, keys to success, basic market analysis, and preliminary analysis of costs, pricing, and probable expenses. It is good for deciding whether or not to proceed with a plan and to tell if this is a business worth pursuing.
More info on Entrepreneurship coming soon.
Source: Swiss Management Center