The Business

Plan
 Executive Summary
• A Business Plan identifies key areas of your business so you can
maximize the time you spend on generating income.
• Key investors will want to look at your Business Plan before
providing capital.
• A Business Plan helps you start and keep your business on a
successful path.
• You should prepare a Business Plan, although, in reality, many
small business owners do not.
 What is a Business Plan?
• A Business Plan is a written document that defines the goals of
your business and describes how you will attain those goals.
• A Business Plan is worth your considerable investment of time,
effort, and energy.
• A Business Plan sets objectives, defines budgets, engages
partners, and anticipates problems before they occur.
 10 Reasons Why You Need a
Strong Business Plan
1. To attract investors.
2. To see if your business ideas will work.
3. To outline each area of the business.
4. To set up milestones.
5. To learn about the market.
6. To secure additional funding or loans.
7. To determine your financial needs.
8. To attract top-level people.
9. To monitor your business.
10. To devise contingency plans.
 How Detailed Should
Your Plan Be?
• Business plans differ widely in their length, appearance, content, and the
emphasis placed on different aspects of the business.
• Depending on your business and your intended use, you may need a very
different type of Business Plan:
• Mini-plan: Less emphasis on critical details. Used to test your
assumptions, concept, and measure the interest of potential investors.
• Working Plan: Almost total emphasis on details. Used continuously to
review business operations and progress.
• Presentation Plan: Emphasis on marketability of the business concept.
Used to give information about the business to bankers, venture
capitalists, and other external resources.
 Assembling a Business Plan
Every Business Plan should include some essential components:
• Overview of the Business: Describes the business, including its products
and services.
• The Marketing Plan: Describes the target market for your product and
explains how you will reach that market.
• The Financial Management Plan: Details the costs associated with
operating your business and explains how you will pay for those costs,
including the amount of financing you may need.
• The Operations and Management Plan: Describes how you will
manage the core processes of your business, including use of human
resources.
 Seven Common Parts of a
Good Business Plan
Business plans must help investors understand and gain confidence on how
you will meet your customers’ needs.
Seven common parts of a good Business Plan are:
1. Executive Summary
2. Business Concept
3. Market Analysis
4. Management Team
5. Marketing Plan
6. Financial Plan
7. Operations and Management Plan
 Part 1: Executive Summary
The Executive Summary of a Business Plan is a 3-5 page introduction to your Business
Plan.
The Executive Summary is critical, because many individuals (including venture
capitalists) only read the summary.
The Executive Summary section includes:
• A first paragraph that introduces your business.
• Your business name and location.
• A brief explanation of customer needs and your products or services.
• The ways that the product or service meets or exceeds the customer needs.
• An introduction of the team that will execute the Business Plan.
• Subsequent paragraphs that provide key details about your business, including
projected sales and profits, unit sales, profitability, and keys to success.
• Visuals that help the reader see important information, including highlight charts,
market share projections, and customer demand charts.
 Part 2: Business Concept
The business concept shows evidence that a product or service is viable and
capable of fulfilling an organization's particular needs.
The Business Concept section:
• Articulates the vision of the company, how you plan to meet the unique
needs of your customer, and how you plan to make money doing that.
• Discusses feasibility studies that you have conducted for your products.
• Discusses diagnostics sessions you had with prospective customers for your
services.
• Captures and highlights the value proposition in your product or service
offerings.
 Part 3: Market Analysis
A Market Analysis defines the target market so that you can
position your business to get its share of sales.
A Market Analysis section:
• Defines your market.
• Segments your customers.
• Projects your market share.
• Positions your products and services.
• Discusses pricing and promotions.
• Identifies communication, sales, and distribution channels.
 Part 4: Management Team
The Management Team section outlines:
• Organizational Structure: Highlights the hierarchy and outlines responsibilities and
decision-making powers.
• Management Team: Highlights the track record of the company’s managers. You
may also offer details about key employees including qualifications, experiences, or
outstanding skills, which could add a competitive edge to the image of the business.
• Working Structure: Highlights how your management team will operate within your
defined organizational structure.
• Expertise: Highlights the business expertise of your management and senior team.
You may also include special knowledge of budget control, personnel management,
public relations, and strategic planning.
• Skills Gap: Highlights plans to improve your company’s overall skills or expertise.
In this section, you should discuss opportunities and plans to acquire new information
and knowledge that will add value.
• Personnel Plan: Highlights current and future staffing requirements and related
costs.
 Part 5: Marketing Plan
The Marketing Plan section details what you propose to accomplish, and is
critical in obtaining funding to pursue new initiatives.
The Marketing Plan section:
• Explains (from an internal perspective) the impacts and results of past
marketing decisions.
• Explains the external market in which the business is competing.
• Sets goals to direct future marketing efforts.
• Sets clear, realistic, and measurable targets.
• Includes deadlines for meeting those targets.
• Provides a budget for all marketing activities.
• Specifies accountability and measures for all activities.
 Part 6: Financial Plan
The Financial Plan translates your company's goals into specific financial targets.
The Financial Plan section:
• Clearly defines what a successful outcome entails. The plan isn't merely a
prediction; it implies a commitment to making the targeted results happen and
establishes milestones for gauging progress.
• Provides you with a vital feedback-and-control tool. Variances from
projections provide early warnings of problems. When variances occur, the
plan can provide a framework for determining the financial impact and the
effects of various corrective actions.
• Anticipate problems. If rapid growth creates a cash shortage due to
investment in receivables and inventory, the forecast should show this. If next
year's projections depend on certain milestones this year, the assumptions
should spell this out.
 Part 6: Financial Plan
The Financial Plan is the most essential part of your Business Plan. It shows
investors the timeframes you have scheduled to make profits.
Some elements of the Financial Plan include:
• Important Assumptions
• Key Financial Indicators
• Break-even Analysis
• Projected Profit and Loss
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios
• Long-term Plan
 Different Financial Planning Options
 Short-term Forecast: Projects either the current year or a rolling 12-month
period by month. This type of forecast should be updated at least monthly and
become the main planning and monitoring vehicle.
 Budget: Translates goals into detailed actions and interim targets. A budget
should provide details, such as specific staffing plans and line-item
expenditures.
– The size of a company may determine whether the same model used to
prepare the 12-month forecast can be appropriate for budgeting.
– In any case, unlike the 12-month forecast, a budget should generally be
frozen at the time they are approved.
 Different Financial Planning Options

 Strategic Forecast: Incorporates the strategic goals of the company into

the projections. For startup companies, the initial Business Plan should
include a month-by-month projection for the first year, followed by
annual projections for a minimum of three years.
 Cash Forecast: Breaks down the budget and 12-month forecast into
more detail. The focus of these forecasts is on cash flow, rather than
accounting profit, and periods may be as short as a week in order to
capture fluctuations.
 Part 7: Operations and Management

The Operations and Management section outlines how your company will operate.
The Operations and Management section includes:
• Organizational structure of the company. Provides a basis for projected
operating expenses and financial statements. Because these statements are
heavily scrutinized by investors, the organizational structure has to be well-
defined and realistic within the parameters of the business.
• Expense and capital requirements to support the organizational structure.
Provides a basis to identify personnel expenses, overhead expenses, and costs
of products/services sold. These expenses/costs can then be matched with
capital requirements.
Thank
You!