How to write a Business Plan?

Business Plan Writing The basics MI BUSINESS MANAGEMENT SOLUTIONS LTD.

Business Plan Outline

Typical Table of Contents

  • Executive Summary
  • Company Summary
  • Products
  • Market Analysis Summary
  • Strategy and Implementation
  • Management Summary
  • Financial Plan
  • Appendices
  • The Executive Summary
  • Apart from the fact that it appears first, The Executive Summary is actually the final section to be written.
  • The executive summary should be two pages’ maximum.
  • It summarizes the entire plan.
  • Make it lively and exciting to capture and keep the reader’s interest.
  • Write it as if you were a consultant who was hired to write this plan for another.
  • Contains approximately a paragraph about the other 7 sections.
  • It is written in the third person, just like the rest of the text.
  • Not everybody reads the details.
  • Make sure that your Executive Summary is easy to understand, clear and concise.
  • Market yourself here.
  • The Company
  • Within this section introduce the business in more detail.
  • Outline the type of business.
  • Include company History
  • Explain each product and Service available within the company
  • Break this section down into subsections
  • General Business Overview
  • Company Structure
  • Location
  • Key Personnel
  • Goals and Objectives
  • Strengths and Weaknesses
  • Mission and Vision Statements
  • General Business Overview
  • Give a description of the business and where it fits into the marketplace
  • Describe what needs the business will be filling and how
  • Describe the markets that will use your business and any business history

REMINDER

  • Write your plan in the 3rd person. DO NOT use I, we, our, mine, my or any other possessive terms when writing your business plan
  • Refer to the business, the owner, ABC Company, The Company, The Store etc.
  • Accentuate the positives
  • Avoid “Wishing and Hoping” Change words like “think” to “Know”, change “if” to “when”, change “hope” to “will” etc.
  • Company Structure
  • Are you a sole proprietor, partnership or an incorporation?
  • Outline the corporate structure u List any shareholders, partners and incorporation information.
  • Location
  • Describe the location
  • its benefits
  • amenities and accessibility to customers
  • Explain why you chose this location Indicate freight routes, traffic statistics (municipality), area demographics (newspaper) and growth rate
  • Details of parking and zoning
  • Cost of Lease or Mortgage plus taxes & utilities
  • Outline any renovations or alterations to be done.
  • Goals and Objectives
  • Outline the goals and objectives of the company.
  • Identify if these goals are long or short term and approximately how long it will take to achieve them
  • Make them smart and sensible goals.
  • Strengths and Weaknesses
  • SWOT Analysis
  • What are the strengths of the business?
  • Stress where & why you excel
  • Discuss any weaknesses and vulnerabilities of the business and what the plan is for mitigating or overcoming them
  • DO NOT include marketing strengths and Weaknesses as they will be covered in the marketing section
  • Mission and Vision Statements
  • The Mission Statement describes your company philosophy. This should only be approximately a couple of lines, sometimes only a sentence or a small number of words is needed.
  • The Vision Statement describes how you see your company in the future.
  • A Mission Statements is uniquely yours, try looking at other companies within your field to help think of an idea.
  • The Mission Statement shows your commitment to the business and its customers and provides a written promise for you to keep.
  • This is the end of section 2 of your business plan and might be a good place to review what you have written up to now. Edit and refine it before moving on.
  • Get someone else to proof your work for you.
  • Make all your corrections and save to your computer AND your flash/hard drive.
  • Save as often as possible and keep it up to date.
  • Check for & eliminate all the I, we, us, own, our references. Remember to write in third person
  • Products and Services
  • Product Description
  • Describe your products and/or services.
  • List the Benefits of your products or service.
  • Describe your advantages and how you are above the competition
  • Realistically assess the amount of work you can do. (Out put)
  • Describe the business developmental stage.
  • List any potential or current contracts, as it demonstrates already potential income
  • If you have orders or letters of intent include them in the appendix
  • Cost of Sales
  • Give detail of your profit margins on individual products and services.
  • Show how much your products sell for and the cost of raw materials, emphasizing profits
  • If you are a reseller, quote the cost to you including freight, packaging, wages, etc.
  • Argue the expected profit margins and don’t forget to explain how the business will maintain them through expansion and/or market fluctuations.
  • Future projections
  • Include this information if you plan any future expansion or development
  • List any possible threats and/or opportunities.
  • Legal Concerns
  • If your business involves legal considerations like copyrights, patents, trademarks or special licenses, include it here.

REMINDER TIME AGAIN

  • Don’t make speculations that cannot be backed up
  • Support any statements that you make with facts.
  • Quote your sources when citing demographics etc.
  • Include a copy of the source in the appendix
  • Add a note like “See appendix 3a” in brackets near the statement or insert numbered footnotes in the footer
  • Ensure your pages are numbered and your company name appears at least once on every page.
  • Marketing Strategies
  • Market Research
  • An analysis of today’s market and trends
  • Past and future industry trends
  • Your target market size and demographics
  • Your ideal customer profile
  • Your realistic projected market share
  • Geographic Boundaries
  • Seasonal Trends
  • Customer Service policies
  • Strengths and weaknesses
  • Market Survey Results
  • Use a synopsis version of your market survey here but include how many people you contacted, what questions you asked and what the responses were.
  • Convert answers into percentages.
  • Include a sample survey form in the appendix.
  • The Competition
  • Identify the current competition, their size and market share
  • Analyse the strengths and weaknesses of the competition
  • Demonstrate how you plan to overcome their strengths and target their weaknesses. Emphasize how this makes your company unique and stand out from the rest u Your Company’s SWOT analysis
  • What will it cost to remain competitive, are you still making profit?
  • Marketing and Sales Strategies
  • This is the plan within the plan. Outline exactly how you plan on finding potential customers.
  • A positive marketing plan includes a mixture of methods, including the use of various media, promotional methods, and a range of techniques.
  • Describe what promotional and media methods you plan on using
  • Outline any special services or policies
  • Define target market that each method is aimed at
  • What is the effectiveness of each method?
  • How frequently will you use which media & why?
  • How will you track results?
  • How will you sell your product or service?
  • Will you be wholesale, retail or direct sales?
  • Will you use representatives, agents, distributors or staff?
  • Incentives or sales bonus schemes?
  • What is the realistic potential reach of your sales force?
  • Operational Information
  • Overhead Costs
  • Explain your estimated overhead costs and demonstrate a break even point.
  • A detailed explanation will be included in your financial projections so don’t go into great detail here.
  • A brief summary of monthly expenses.
  • Suppliers
  • List your suppliers
  • What are their terms of credit?
  • How much lead time between order and delivery?
  • Make note of any personal guarantees you had to sign in order to obtain credit.
  • Quality Control
  • Describe your policies on quality control.
  • Describe any hazards or environmental risks and how you propose to deal with these obstacles.
  • Describe any special safety measures or procedures relevant to the production of your product.
  • Distribution
  • Outline how your products will be delivered or distributed and any competitive advantages to your methods.
  • Employees
  • List any staff positions along with their job descriptions, areas of responsibility and expected salaries.
  • Assets and Equipment
  • List any buildings owned.
  • List any equipment already on hand.
  • List any equipment to be purchased.
  • Provide a price and life expectancy for each asset.
  • Advisory Board
  • Identify the members of your advisory board & give their backgrounds & qualifications.
  • Insurance policies
  • List the various insurance policies that you will take out and their individual costs.
  • Liability u Fire and Theft
  • Worker’s Compensation
  • Employment Insurance
  • Key Management and/or Key Employee Insurance
  • Licenses and permits
  • List any licenses or permits that your business requires to operate and their assorted costs.
  • Include your business registration information.
  • Include your business permit.
  • Financial Information
  • The Viability of your business culminates in this section when you prepare projections of income & expenses, cash flow forecasts and when you review how much money you may require.
  • Even if you plan to be self funding, projections and cash flows facilitate making sound management decisions now and in the future.
  • Projections of income & expenses
  • Include a month by month estimation of sales and expenses
  • Include start up costs
  • Itemize by the month that revenue was generated and the month when the costs were incurred.
  • Be conservative with revenues and practical with expenses.
  • Make sure the bottom line indicates profits or losses.
  • Cash Flow Forecasts
  • A cash flow forecast differs from projections as it estimates when revenues will be received (as opposed to generated) and when expenses will be paid.
  • Includes income form loans and other sources.
  • Financial Statements
  • Banks require a projected balance sheet and at least 2 years of financial statements.
  • Capital Expenses
  • Include a list of capital spending such as asset purchases or building renovations (leasehold improvements)
  • Net Worth Statement
  • Net Worth Statements indicate the stability of the key management players
  • List the owner’s personal assets, liabilities & net worth
  • Funding Requirements
  • If you need to borrow, explain how much you need, what you are going to use it for and how and when you will repay the loan.
  • Explain how you plan to secure the loan and with what assets.
  • Show the amount borrowed in your financials and include the monthly payments in your cash flow projections.
  • If seeking an investment partner, indicate the share of the company available in exchange for investment.
  • When you need the money & how much
  • The type of loan you are applying for
  • The desired terms of payment
  • A breakdown of how you will use the funds
  • Any future funding requirements
  • Any expansion plans.
  • Appendix
  • Up to Date Financial Statements
  • Personal Statements of Net Worth
  • Letters of Reference or Letters of Intent
  • Product Photos and brochures
  • Relevant Newspaper articles or internet downloads
  • Resumes of Key employees or partners
  • Incorporation or business registration papers
  • Cash flow projections and sales forecasts
  • Permits
  • Licenses
  • Trademarks or Patents
  • Market Surveys
  • Equipment and Asset appraisals
  • Partnership or employment agreements
  • Insurance policies
  • Mortgages or Leases

Getting it done!

  • Review the various sections frequently
  • Save often u Save in more than one location
  • Get someone to proof read it and edit it
  • Get more than one person to proof read it
  • Present it to your advisory board and request feedback.
  • Spell check it
  • Print it on high quality paper and bind it in a quality cover.

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