QUESTION NO.

24

Contents of a Business
Plan

SUBMITTED BY:
MANIKA SEHGAL
MBA III SEM
#107698
INTRODUCTION
A business plan is a formal statement of a set of business goals and the plan for reaching
those goals. A business plan is also a road map that provides directions so a business can plan
its future and helps it avoid bumps in the road. The time you spend making your business
plan thorough and accurate, and keeping it up-to-date, is an investment that pays big
dividends in the long term.
A business plan should conform to generally accepted guidelines regarding form and content.
Each section should include specific elements and address relevant questions that the people
who read your plan will most likely ask. Generally, a business plan has the following
components
Definition: A written document describing the nature of the business, the sales and marketing
strategy, and the financial background, and containing a projected profit and loss statement.
Why Entrepreneurs Start Businesses???

Funding Sources
Savings
Friends and Family
Financial Institutions / Banks
Angel Investors
Venture Capital


Capitalize
on an
Invention
Be Their
Own
Boss
To Get
Rich
Pursue a
Passion
Outline of a Business Plan
Executive Summary
Table of Contents
1) Statement of Purpose
2) Company History
3) Business Description
4) Products and Services
5) Market Analysis
a. Customers
b. Competition
c. Marketing Strategy
6) Development
7) Personnel
8) Management
9) Operations
10) Financial Plan
Executive Summary
The executive summary, or statement of purpose, succinctly encapsulates your reason for
writing the business plan. It tells the reader what you want and why, right up front.
The summary or statement should be no more than half a page in length and should touch on
the following key elements:
Business concept describes the business, its product, the market it serves and the
business' competitive advantage.
Financial features include financial highlights, such as sales and profits.
Financial requirements state how much capital is needed for startup or expansion,
how it will be used and what collateral is available.
Current business position furnishes relevant information about the company, its legal
form of operation, when it was founded, the principal owners and key personnel.
Major achievements points out anything noteworthy, such as patents, prototypes,
important contracts regarding product development, or results from test marketing
that have been conducted.

CONTENTS:
A mini-business plan in one or two pages
Highlights the most important points of your business plan
It is NOT an introduction to the plan
It must grab your reader, and entice him/her to read further
Identify the company, its background, structure and location
Describe what the company does, and the market it serves
Outline the backgrounds and experience of the top management team
Describe the funding required, the purposes for which it will be used, the collateral
available (if for a lender), and the expected outcomes
Describe the market potential for the companys products and services, market trends,
etc.
Statement of Purpose
The business plans objectives: financing or operating guide
Financing
How much money is needed?
What will the money be used for?
How will the funds benefit the business?
Why does this loan or investment make business sense?
How will the funds be repaid?
Operating guide
Who will use it?
Will it layout strategy plans?
How will it be updated?
Becoming self-sufficient


Company History
Mission Statement
Basic product description
Names of principals and brief background on each
Legalities: business type
Company location
Number of employees
Customer highlights
Awards and merits
Company milestones (business formation, opening date, hiring employees, revenue
levels/ growth)
1-3 year plan future milestones to reach (sales goals, hiring employees)
Business Description
The business description usually begins with a short explanation of the industry. When
describing the industry, discuss what's going on now as well as the outlook for the future.
When describing your business, say which sector it falls into (wholesale, retail, food service,
manufacturing, hospitality and so on), and whether the business is new or established. Then
say whether the business is a sole proprietorship, partnership, C or Sub chapter S corporation.
Next, list the business' principals and state what they bring to the business. Continue with
information on who the business' customers are, how big the market is, and how the product
or service is distributed and marketed.
It includes:
Basic product or service description
New, takeover, expansion, franchise
General strategy plan
List of planned milestones (business formation, opening date, hiring
employees, reaching certain revenue goals)
Planned strategic alliances
Work already done
Experience in the business
Products/Services
The business description can be a few paragraphs to a few pages in length, depending on the
complexity of your plan. If your plan isn't too complicated, keep your business description
short, describing the industry in one paragraph, the product in another, and the business and
its success factors in two or three more paragraphs.
When you describe your product or service, make sure your reader has a clear idea of what
you're talking about. Explain how people use your product or service and talk about what
makes your product or service different from others available in the market. Be specific about
what sets your business apart from those of your competitors. It includes:
Products / Services
What does it do?
Uniqueness
Competitive Advantage
Technology
Brief description
Applications
Commercialization Status
Brief overview
Market Analysis
A thorough market analysis will help you define your prospects as well as help you establish
pricing, distribution, and promotional strategies that will allow your company to be
successful vis--vis your competition, both in the short and long term.
Begin your market analysis by defining the market in terms of size, demographics, structure,
growth prospects, trends, and sales potential. Next, determine how often your product or
service will be purchased by your target market.
Your market share will be a benchmark that tells you how well you're doing in light of your
market-planning projections. It includes:
Market Definition
Primary Market
Secondary Markets
Market Size and Trends
Current total revenues

1. Competitors
The purpose of the competitive analysis is to determine:
the strengths and weaknesses of the competitors within your market.
strategies that will provide you with a distinct advantage.
barriers that can be developed to prevent competition from entering your market.
any weaknesses that can be exploited in the product development cycle.
It includes:
Predicted annual growth rate
Who are they?
Size and product breadth
Revenues and profitability
Strengths and weaknesses
Market shares
2. Customers
Customer Characteristics
Who are they?
Why do they buy?
Need satisfied by the product/service
How is the need currently filled?
What are the alternatives?
Who makes the decision to buy?
How frequently do they purchase?
3. Marketing Strategies
Product/Service Strategy
Pricing Strategy
Distribution Strategy
Advertising and Promotion Strategy
Sales Strategy
Marketing and Sales Forecasts
Marketing and Sales Plans
It mainly contains:
Marketing Programs
Direct Mail
Trade Shows
Advertising
Internet
Publicity/Public Relations
Marketing Budget
Pricing
Basis for targeted price point
Margins and profitability by volume levels
Statement of Opportunity
Marketing and Sales Objectives
- Existing Customers
Potential Customers
Prospects targeted
How prospects will be targeted and qualified
Sales Plan
Sales force structure (direct or reps)
Sales expectations/quotas
Margins given to intermediaries
Service and warranties
Sales Budget
Organizational chart indicating planned growth


Development
R & D Plan
Objectives
Milestones and current status
Difficulties and risks
Staffing
R & D Budget and assumptions
Personnel
Human Resource Plan
Staffing Objectives
Organizational Structure
3-5 year growth plan
Budget
Management
The operations and management component of your plan is designed to describe how the
business functions on a continuing basis. The operations plan highlights the logistics of the
organization, such as the responsibilities of the management team, the tasks assigned to each
division within the company, and capital and expense requirements related to the operations
of the business. The management in any business comprises of:
Company Organization
Management Team
Administrative Expenses
THE MANAGEMENT TEAM I NCLUDES:


Management
Team
President
VP
Finance
VP
Marketing
VP Sales
VP
Manufactu
ring
Board of
Advisors
Operations
Manufacturing/Production Plan
Objectives
Facilities
Staffing
Subcontractors
Quality Control
Budget / Operating Expenses
Financial Plan : How Much $$$/RS. Do I Need?
After defining the product, market and operations, the next area to turn your attention to are
the three financial statements that form the backbone of your business plan: the income
statement, cash flow statement, and balance sheet.
The income statement is a simple and straightforward report on the business' cash-generating
ability. It is a scorecard on the financial performance of your business that reflects when sales
are made and when expenses are incurred. It draws information from the various financial
models developed earlier such as revenue, expenses, capital (in the form of depreciation), and
cost of goods. By combining these elements, the income statement illustrates just how much
your company makes or loses during the year by subtracting cost of goods and expenses from
revenue to arrive at a net result, which is either a profit or loss. In addition to the income
statements, include a note analyzing the results. The analysis should be very short,
emphasizing the key points of the income statement. Determine start up costs and estimate
monthly operating costs to determine your working capital needs
Financial Plan: Startup Budget
Personnel (costs prior to opening)
Occupancy (lease, rent, or mortgage)
Legal/ Professional Fees
Equipment
Supplies
Salary/ Wages
Utilities
Payroll Expenses
Internet
Licenses/ Permits
Insurance
Advertising/ Promotions
Personnel
Lease/ Rent/ Mortgage
Loan Payments
Legal Fees
Accounting
Supplies
Salaries/ Wages
Dues/ Subscriptions/ Fees
Repairs/ Maintenance

10 Things Every Business Plan Should Contain
Whatever others may say to the contrary, a business plan should never be a work of fiction.
At the end of the day, you will only be fooling yourself because lenders, for whom the fiction
is usually generated, rarely lose! Here are ten headings you might use when writing or
rewriting your business plan.
1. Vision what is it that makes this business exciting and utterly irresistible to customers,
suppliers and most importantly, to you?
2. Background what has happened to you and in the world around you to make this
venture- the right thing for right now?
3. Goals success will look like this: turnover, profit, customer numbers.
4. People who is in your team and how are they perfect for the job?
5. Products what are you going to sell and how will your products or services evolve in
response to customer feedback/market change?
6. Competition whos already out there and how will you be different? The differences are
crucially important, without knowing them you will not succeed.
7. Marketing how are you going to communicate the benefits you offer to those you seek
as customers?
8. Funding how will you pay for it all and what can investors (if any) expect in return?
9. Measurement as well as stoking the boiler and steering the ship, you do need to find
time to check that youre on course. How will you measure performance?
10. Jumping ship a business, like anything else, has a natural life span. You need to plan
before you start for your exit. Will you sell? Give it to your kids? What?

























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ENTREPRENEURSHIP DEVELOPMENT
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