Business Plans

Planning as a Process

•  The business plan is not abstract, not uninformative, not theoretical, not mysterious.

• It is a document that convincingly demonstrates that business can sell enough of it’s      products and services to make a satisfactory profit.

• It is a selling document.

Simple

-          Easy to understand and act on

-          Does it communicate its contents easily and practically?

Specific

-          Is the plan specific?

-          Are the objectives concrete and measurable?

-          Does it include specific actions and dates of completion

-          Specific persons responsible and specific budget.

Realistic

-          Is the plan realistic?

-          Are the sales goals, expense budgets and milestones dates realistic

-          Achievable, doable

Complete

-          The requirements of a business plan vary depending on the context.

Use of a Business Plan

1.       Define and fix objectives

2.       To create regular business reviews and course direction

3.       To support a loan application

4.       To define agreements between partners

5.       To set a value on a business for sale, or legal purposes

6.       To evaluate a new product line, promotion, or expansion.

7.       To define a new business.

The Don’ts of Business Plan

1.       Don’t use a business plan to show how much you know about your business.

2.       Nobody reads long winded business plan, so limit it to 50 pages.

Importance of Graphics

•      Tables and charts present information in visual formats with greater impact the word alone.

•      Plans should include graphics, bar charts and pie charts to illustrate the following.

1.       Cash Flow- The single most important numerical analysis in a business plan

2.       Sales Forecast with break even information

3.       Profit or Loss statements or cost-benefit analysis

4.       Projected Balance sheet

5.       Market Analysis

Sample Business Plan Outline

1.       Executive Summary – write this last, a page or two of the highlights

2.       Company Description- History, establishment, start-up plans

3.       Product or Services- describe your selling focusing on customer benefits

4.       Market Analysis- you need to know your market, costumer’s needs, where they are and how to reach them.

5.       Strategy and Implementation- be specific, include management responsibilities with dates and budgets.

6.       Management Teams- backgrounds of key members of the team, personnel strategy and details.

7.       Financial Plan- Profit and Loss, Cash Flow, Balance Sheet, Breakeven Analysis, Assumptions, Business ratios