perspectives in business plan preparation

Different Perspectives on Business Planning: Creating the Right Plan for Your Audience

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The Stakeholder Perspective on Business Planning

There are as many different perspectives on business planning as there are stakeholders. This is because each stakeholder naturally needs to answer the question “what’s in it for me?” so they all bring with them their unique perspective. Take a look at some of the possible different perspectives on business planning below.

The Entrepreneur’s Perspective

Naturally the entrepreneur wants the business to get off the ground and turn into a success, but a business owner’s perspective on planning might be more focused on processes and operational issues because this is what would occupy their time in actuality. Making a profit and getting strong financial indicators are also important to the entrepreneur at the planning stage, but they may have more faith in their ability to personally drive the business. This means they may not be that worried about lower profit margins or the risk that cash flows might run dry.

The Lender’s Perspective

If the business is going to be financed with borrowed money, the lender needs to have access to the business plans to ensure the viability of the business. If the lender is not convinced that the idea will succeed, or if they feel the processes appear to be weak, they may predict trouble ahead. The lender would, therefore, prefer a business plan that is geared more toward ensuring that revenue figures look healthy and the cash flow appears to be buoyant . if this is not the case, they may be hesitant to release funding.

The Investor’s Perspective

Investors are similar to lenders in that they want to see that the business plan is focused on generating profit. However, some investors may be more willing to take a risk if they can be convinced that abnormal profits lay ahead. Investors are traditionally less conservative than lenders and so they may pay more attention to the novelty of the idea and the softer issues involved that can make the business a success.

Since the business planning process is not static but rather changes and grows as the business grows, additional stakeholders may be added along the way. Suppliers, customers, and even employees may all eventually have an opinion on what should be included in the business plan for the business in question.

The Time Perspective on Business Planning

It is also possible to have different perspectives on business planning that are based on time.

Past Perspective on Business Planning

When preparing a business plan, an entrepreneur must consider the industry’s history. Market research is undertaken to get an idea of what has been successful and what did not work and why. This information shapes the final outcome of the business plan .

Future Perspective on Business Planning

Forecasting is one of the basic skills needed in preparing any business plan. The entrepreneur must be able to make predictions or calculated estimates of future sales, costs, and other factors to be able to plan ahead. This is yet another factor that affects how a business plan is eventually shaped.

Present Perspective on Business Planning

Finally, the entrepreneur must engage in putting the plans for the future into action. The present is essentially involved with implementation and measuring actual performance against what was predicted, so that improvements can be made and rewards can be shared for good performance.

Therefore, there are a variety of ways to look at business planning. Each one is valid and useful in its own right and none of the perspectives outlined in this article deserves to be underplayed.

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How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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Knowledge at Wharton Podcast

How entrepreneurs can create effective business plans, march 2, 2010 • 16 min listen.

When an entrepreneur has identified a potential business opportunity, the next step is developing a business plan for the new venture. What exactly should the new plan contain? How can the entrepreneur ensure it has the substance to find interest among would-be investors? In this installment of a series of podcasts for the Wharton-CERT Business Plan Competition, Wharton management professor Ian MacMillan explains that business plans must contain several crucial elements: They must articulate a market need; identify products or services to fill that need; assess the resources required to produce those products or services; address the risks involved in the venture; and estimate the potential revenues and profits.

An edited transcript of the interview appears below:

Knowledge at Wharton: Professor MacMillan, thank you for speaking with us about the necessity of entrepreneurs writing business plans. To start with a basic question, what exactly is a business plan?

Ian MacMillan: A business plan to me is a 25-page, maximum 30-page, document, which is a description, analysis and evaluation of a venture that you want to get funded by somebody. It provides critical information to the reader — usually an investor — about you, the entrepreneur, about the market that you are going to enter, about the product that you want to enter with, your strategy for entry, what the prospects are financially, and what the risks are to anybody who invests in the project.

Knowledge at Wharton: Could you explain some of these elements in a little more detail and describe how entrepreneurs can develop an effective business plan?

MacMillan: Let me start by saying that you probably want to avoid developing a detailed business plan unless you have done some initial work. Basically what happens is that by doing a little bit of work, you earn the right to do more work. The first thing I would do before you start a business plan is think about a concept statement. A concept statement is about three to five pages that you put together and share with potential customers or investors just to see if they think it’s worth the energy and effort of doing more detailed work.

The concept statement has a few pieces to it. You are going to have a description of the market need that has to be fulfilled; a description of the products or services that you think are going to fulfill that need; a description of the key resources that you think are going to be needed to provide that product or service; a specification of what resources are currently available; an articulation of what you think the risks are; and then a sort of rough and ready estimate of what you think the profits and profitability will be.

The idea is to put together this concept document and begin to share it around with people who are going to have to support your venture if you take it forward. This allows you to rethink as a result of feedback that you get. You might get word back from the various stakeholders — like potential customers or distributors — that this really wasn’t such a good idea after all. That saves you the energy and effort of putting together a big business plan.

Knowledge at Wharton: Assuming the concept statement works out and you want to move towards the business plan, what else would you need? And where can you find the information? Some information can be hard to locate, especially about your competitors.

MacMillan: It’s really important to go out and speak to your potential customers. You need to find the people who you think will buy your product and talk to them about what dissatisfies them with their current offerings. You should get a sense from them about who is providing the alternative at the moment. Remember, the world has gone for maybe 100,000 years without your idea — and people are getting by; they’re not dying. Something out there is servicing their need. So what is the closest competitive alternative to what you want to offer?

That is what you need to find out — and that involves talking and listening. And for all the enthusiasm you have for your venture or your idea, you really need to listen to people who are eventually going to write a check for it.

Before you go on to write a business plan, you have to do some more work. If the concept statement looks good, then the next step is to do a 15- to 20-page feasibility analysis. This means we are now going to take this idea to the next level. We’ve learned from potential customers and distributors. We’ve learned who the major competitors are. We’ve shaped the idea more clearly, and now we’re digging deeper.

The next challenge you face is to say, well, if you start this business, what evidence do you have that the market actually wants it? Who do you think would write a check for your product? You need to articulate what makes your product or your service feasible. What has to be done in order to make this thing real? You need a description of how you intend to enter the market, a description of who the major competitors are, a preliminary plan — a very rough plan — which specifies what you think your revenues and profits are going to be, and an estimate of what you think the required investment will be. And only then, once you have articulated that, and once again shared it with your stakeholder community, will you perhaps be able to go and write a business plan.

Knowledge at Wharton: Once you have done your feasibility analysis and assuming you get the go ahead from your stakeholders, what is the next step?

MacMillan: The idea of the business plan is to convince the stakeholders. First, what we need to do in a business plan is show that we understand the needs — the unmet needs — of potential customers. Second, we need to understand the strengths and weaknesses of the current most competitive offering out there. Third, we need to understand the skills and capabilities that you and your team have as entrepreneurs. Next we need to understand what the investors need to get out of their investment, because they have to put their money in and they need to have some kind of sense of what they are going to get in terms of returns. In addition, the investment needs to be competitive with alternative investments that the investors might make.

The most important idea in the business plan is to articulate and satisfy the different perspectives of various stakeholders. This process sets in motion some basic requirements in the business plan — to tee up right from the start — evidence that the customer will accept it. Probably a third of the ventures out there that fail are because some person came up with the right product that they thought the world would love and then found out that the customers couldn’t care less. What you want to try to do in a business plan is convince the reader that there are customers out there who will in fact buy the product — not because it’s a great product, but because they want it and they are willing to pay for it.

Moreover, you need to convince the reader that you have some kind of proprietary position that you can defend. You also need to convince your readers that you have an experienced and motivated management team and that you have the experience and the management capabilities to pull it off. You need to convince potential investors that they are going to get a better return than they could get elsewhere, so you need to estimate the net present value of this venture. You need to show that the risk they are taking will be accompanied by appropriate returns for that risk. If we look at the contents of a typical business plan, you need to be able to articulate all these issues in some 25 to 30 pages. People get tired if they have to read too much.

Now let’s look at the various components of the business plan document:

First, you need an executive summary that grabs the attention of the potential investor. This should be done in no more than two pages. The executive summary is meant to convince the potential investor to read further and say, “Wow! This is why I should read more about this business plan.”

Next, you need a market analysis. What is the market? How fast is it growing? How big is it? Who are the major players? In addition, you need a strategy section. It should address questions such as, “How are you going to get into this market? And how are you going to win in that marketplace against current competition?”

After that, you need a marketing plan. How are we going to segment the market? Which parts of the market are we going to attack? How are we going to get the attention of that market and attract it to our product or service?

You also need an operations plan that answers the question, “How are we going to make it happen?” And you need an organization plan, which shows who the people are who will take part in the venture.

You need to list the key events that will take place as the plan unfolds. What are the major things that are going to happen? If your plan happens to be about a physical product, are you going to have a prototype or a model? If it happens to be a software product, are you going to have a piece of software developed — a prototypical piece of software? What are the key milestones by which investors can judge what progress you are making in the investment? Remember that you will not get all your money up front. You will get your funds allocated contingent on your ability to achieve key milestones. So you may as well indicate what those milestones are.

You should also include a hard-nosed assessment of the key risks. For example, what are the market risks? What are the product risks? What are the financial risks? What are the competitive risks? To the extent that you are upfront and honest about it, you will convince your potential investors that you have done your homework. You need to also be able to indicate how you will mitigate these risks — because if you can’t mitigate them, investors are not going to put money into your venture.

After that, what you get down to is a financial plan where you basically do a five-year forecast of what you think the finances are going to be — maybe with quarterly data or projections for the first two years and annual for the next three years.

You need a pro forma profit and loss statement. You need a pro forma balance sheet if you have assets in the balance sheet. You need to have a pro forma cash flow. Your cash flow is important, because it is the cash flow that kills. You may have great profits on your books but you may run out of money — so you need a pro forma cash flow statement. And you need a financing plan that explains, as the project unfolds, what tranches of financing you will need and how will you go about raising that money.

Finally you need a financial evaluation that tells investors, if you make this investment, what is its value going to be to you as an investor. That is basically the structure of the plan.

Knowledge at Wharton: Let’s say you have written a business plan and presented it to your investors. How closely do you have to be tied to the plan? Does it mean that once you are executing against the plan, you should reject new opportunities you find because they are not part of your plan? Or should you build in some flexibility that allows you to explore emerging opportunities?

MacMillan: Is this an opportunity for me to speak about discovery-driven planning?

Knowledge at Wharton: Of course.

MacMillan: Okay. The thing about most entrepreneurial ventures is that your outcome is uncertain — because what you are doing is very new. It is very, very hard to predict what the actual outcome is going to be. One of the most fundamental flaws is that in the face of unfolding uncertainty, you single-mindedly and bloody-mindedly pursue the original objective.

The reality is that the true opportunity will emerge over time. What venture capitalists do is they will put a small amount of money into the project, allow the entrepreneur to enter that market space and then — contingent on performance and contingent on what apparent traction you can get in that market space — completely re-plan to find out what the true opportunity really is. It is insanity to insist that people actually meet their plan as it was originally written.

This doesn’t mean you compromise your objectives. The idea is that I want to keep on trying to meet my objectives, but how I meet them must change as the plan unfolds. That’s basically what led to all the work that Wharton has done in the last few years on discovery driven planning. It’s a way of thinking about planning that says, “I’m going to make small investments. If I’m wrong early, I can fail fast, fail cheap and move on. But as I find out what the true opportunity is, I can aggressively invest in what this opportunity is.”

Knowledge at Wharton: Could you give an example of a company that has used this discovery-driven planning process to take its business to the next level?

MacMillan: One company that has done the most in this area is Air Products. What they have been able to do is use discovery-driven planning to unfold completely different businesses from the ones that they were in. Air Products makes things like carbon dioxide and oxygen and nitrogen. It is a very old-line company. Using discovery-driven planning, they have been able to move aggressively into, for instance, the service sector. Once they recognized that they were able to deliver reliably and predictably in the face of uncertain demand, they developed a set of skills that allowed them to enter the service business where the return on investment and return on assets are far higher than putting a huge plant in place.

Knowledge at Wharton: Professor MacMillan, thanks so much.

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Practical Business Planning

Understanding the components of future success.

By the Mind Tools Content Team

Business planning is perhaps the most critical element of a successful business. It is also the element that many business owners neglect, or spend too little time on.

Why? Because it's a whole lot of work, and when you're in the throes of starting a new venture, there are probably far more pressing, or glamorous and exciting, things to be doing.

Yes, finding a great space to rent can be important. And yes, figuring out what to charge customers is essential too. But if you don't do those things within the context of the larger picture – the total business plan – you are likely to miss critical details that have the potential to doom your whole venture to failure.

Some people consider writing a business plan a necessary evil in order to get financing from a banker or investor, but this can be missing the point. A business plan is far more than a fancy sales tool; it is a powerful management tool to help you focus on your goals, set objectives and avoid potential pitfalls. The process of writing a business plan forces you to consider all the aspects of starting your venture, or taking it to the next stage; from identifying opportunities, to exploring risks, to putting figures to ideas.

Bottom line, the business plan makes you think, quantitatively and qualitatively, about why, what and how you are to proceed. It helps you think about the highs and the lows, the advantages and the disadvantages, the potential for success and for failure. While you might have a successful business without a business plan, it is far more likely that if you fail to plan, you will also fail to succeed.

Of course, you may find that when you look at your business idea in this detail, it simply doesn't stack up. Disappointing as this might be, it's far better to find this out on paper than suffer the cost and consequences of finding it out in practice.

Business planning is just as important for new projects as it is for new businesses. In this context, the "business plan" is usually called a "business case". The discipline of justifying what you plan to do in terms of what it will achieve, and how you will do it, will contribute greatly to the chances of your project succeeding.

What Will a Business Plan Show?

A Business Plan will help you examine your business concept and intentions for viability and sustainability. Along the way, you will discover invaluable information that you'll use over and over again. Here are ten of the top discoveries you will make as you write your business plan:

• Exactly what your business will provide.
• Who your customers are, and how able you are to meet their needs.
• Who you competitors are, and what are their strengths and weaknesses are.
• Potential obstacles to your success.
• The capabilities of your core business team.
• A well-defined marketing strategy to capture your share of the market.
• Benchmarks and goals.
• Financial projections and returns on investment.
• How much money you need to start up.
• What your investors will get out of the deal.

What Goes Into a Business Plan?

A good business plan contains dreams and ideas that are backed by facts and figures, and it's usually presented in a fairly standardized format. The following eight items are common sections in a business plan – once you have sufficient detail for each of these elements, you'll have the basis for a comprehensive and complete business plan.

• Executive Summary.
• Business Overview.
• Products and Services.
• Industry/Market Overview.
• Marketing Strategy and Implementation Plan.
• Operational Infrastructure.
• Management Team Summary.
• Financial Plan.

Each of these business plan sections is described briefly in the sections below. (Bear in mind that this is an introduction to business planning: you'll find links to more detailed – and country-specific – information at the end of the article.)

Depending on the nature of your business, and your own areas of expertise, you may need to call on other people's help and expertise to build you business plan, for example in marketing or financial planning. We also provide links to additional resources to help your business planning in more detail.

1. Executive Summary

It's the first thing people read, and it's the last thing you prepare. The aim of this section is to sum up your entire plan in such a way that leaves no doubt as to your business's viability and profitability, and your capability to manage it. An executive summary can be as short as a few paragraphs, and as long as two pages. Regardless of length, it must highlight the key points and conclusions from each of the sections that follow in your Business Plan.

2. Business Overview

The purpose of the Business Overview is to provide readers with an overall feel for what it is you are trying to accomplish and give the reader a more detailed look at your vision. The elements you provide details about are:

• History – what led to your idea and this business concept?
• Mission Statement – what are you in business to achieve?
• Goals and Objectives – what are you striving for within the first year, and longer term horizon?
• Ownership – are you a proprietor, partner, or corporation?
• Location – what facilities will the business use?

3. Products/Services

Most businesses sell products or provide services. In this section your goal is to define clearly what you are providing to your customers, and how your offering is different or unique. It includes:

• Products and/or Services – what are you selling and/or providing?
• Production and/or Service Delivery – how will you acquire or provide those products or services?
• Competitive Comparison – why will customers buy your products, and not that of someone else (this is really important, and we look at it again below.)
• Future Products and Services – how do you expect your products/services to evolve and develop over the next year to five years?

4. Industry/Market Overview

This section is a summary of market research that helps determine if your business idea is profitable and sustainable. It defines your industry, discusses trends, outlines the customer/market needs that exist, examines buyer behavior and also looks at the competitive outlook in your market.

To address these points, you will of course need to conduct some market research. This enables you to back up your proposition with evidence. The marketing issues your research should address are:

• Industry analysis – what's happening and what's changing in you industry? A good way to do this analysis is to use the PEST analysis tool, which looks at Political, Economic, Socio-Cultural and Technological factors. Another is to use Porter's Five Forces Analysis , which helps you think about the balance of power in the industry.
• Market analysis – what are the characteristics of the market you operate in, what customer needs are being fulfillled, and how can this market and these customer needs be sub-divided?
• Trends and outlook – what shift in consumer behavior may affect your business?
• Buying behavior – how are purchases made and what influences buying decisions?
• Industry participants – what are the main characteristics of the key players in your industry? Consider using SWOT Analysis to understand their strengths and weaknesses, and the opportunities and threats they face.
• Competitive analysis – How will you offer a sufficiently different product or service to persuade customers to buy from you, and not from these already-established competitors? Consider using USP Analysis to think about your competitive position.

5. Marketing Strategy

The data from your market analysis can now be used to formulate your marketing strategy, and define how you will sell the product, and to whom.

• Start by using SWOT analysis again, this time focused on yourself. What are the strengths, weakness, opportunities and threats facing the venture? This analysis shows you how you can align your strengths with the opportunities available and what contingencies you should prepare to deal with the weaknesses and threats you've identified.
• Target Market – Who is your ideal customer? What specific need do you fulfilll? And thus what segments of the market will you serve? Is there a specific niche you can exploit?
• Key Competitors – Who else is vying for you target market?
• Competitive Position – How will you best communicate the unique reason that people should buy from you? And where should you communicate this message?
• Pricing Strategy – What price will attract the customers you target? What price will make you the best profit?
• Promotion Strategy – How will you brand and promote your business? Where will market and sell?

6. Operational Infrastructure

In this section you set out details of the equipment and facilities you will use to create your products and serve your customers. Depending on the nature of your business, these will include all or some of:

• Premises – offices, workshops and storage facilities.
• Equipment and machinery.
• IT resources – Software and hardware, including accounting systems.

You should also include details of major suppliers on which you will rely for outsourced services as well as for key raw materials, and the nature of agreements you would make with them.

7. Management Team Summary

Here you explore your talents and ability to manage the business. This section includes an overview of the main people contributing to the day-to-day management of the business:

• How does your background/business experience help you in this business?
• Who will be on the management team? Include an organization chart.
• What is your management philosophy?
• What are your and your team's weaknesses and how can you compensate for them?
• What are their duties? Are these duties clearly defined?
• Do you have any personnel needs? If so, what is your plan for hiring and training?

8. Financial Plan

Don't let the numbers scare you – you don't need to be an accountant to be in business, but you do need to understand what you are reading and where the numbers came from. You financials will tell you whether or not what you intend to do will eventually be profitable. After all, there's not a lot of point to being in business if you can't make money. Make sure you cover:

• Start-up Funds – Do you have enough capital to carry you through until you start achieving a positive cash flow?
• Operating Budget – Where will you spend your money during the first year?
• Financial Assumptions – What are you basing your projected numbers on?
• Cash Flow Projection – Based on your educated assumptions, what income and expenses do you project? How long will it take to achieve a positive cash flow and when will you break even? See our article on Cash Flow Forecasting to find out how to do this.

If you feel a little uneasy about financial planning there are many sources of help available. Invest in one of many great books on starting a business, or consider asking for resources and advice from the small business manager at your local bank. Any new business venture needs good financial planning, and good ongoing financial management, so it's worth investing the time to learn these skills now, or getting someone involved with this expertise.

Business planning is an essential activity when thinking about a new business venture or project. By taking the time to discover all of the key facts and figures described in the seven business planning areas above, you'll gain an excellent grasp of how you're going to implement your ideas, and what financial investment, and gains, you can expect. If your business plan does not stack up, you can refocus your efforts now, on paper, and make the difference between business success and failure.

By learning the skills of business planning, you'll be in a great position to monitor and manage your business plan as your venture moves forward. The plan, and everything in, it is a moving feast, and you'll need to keep revisiting and challenging it as you progress. Your business plan is an essential foundation: keep building on it to ensure your business's success.

[1] Bplans.com. (2016). ‘Free Sample Business Plans’ [online]. (Available here .) [Accessed July 6, 2016.]

[2] Business.gov.au. (2016). ‘Business Plan Template & Guide’ [online]. (Available here .) [Accessed July 6, 2016.]

[3] Canadabusiness.ca. (2016). ‘Sample Business Plans and Templates’ [online]. (Available here .) [Accessed July 6, 2016.]

[4] Cranfield.ac.uk. (n.d.). ‘What Your Business Plan Should Include’ [online]. (Available here .) [Accessed July 6, 2016.]

[5] Gov.uk. (2016). ‘Write a Business Plan’ [online]. (Available here .) [Accessed July 6, 2016.]

[6] Icaew.com. (2011). ‘Writing a Business Plan’ [online]. (Available here .) [Accessed July 6, 2016.]

[7] Princes-trust.org.uk. (2016). ‘Business Plans and Templates’ [online]. (Available here .) [Accessed July 6, 2016.]

[8] Sba.gov. (2016). ‘Starting & Managing a Business’ [online]. (Available here .) [Accessed July 6, 2016.]

[9] Score.org. (2016). ‘Business Planning & Financial Statements Template Gallery’ [online]. (Available here .) [Accessed July 6, 2016.]

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11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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• Authors: Michael Laverty, Chris Littel
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• Book title: Entrepreneurship
• Publication date: Jan 16, 2020
• Location: Houston, Texas
• Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
• Section URL: https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan

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Expert Advice: 10 Tips to Craft a Strong Business Plan A business plan writing expert weighs in what to include and what not to include to create a winning business plan.

By The Staff of Entrepreneur Media, Inc. • Jan 15, 2015

In their book Write Your Business Plan , the staff of Entrepreneur Media, Inc. offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, guest contributor Kaye Vivian, an expert in writing business plans, offers advice on how you can improve your business plan content and presentation.

When it comes to content, these 10 tips will help:

1. Know your competition. Be prepared to name them and tell what makes you different from (and better than) each of them. But do not disparage your competition.

2. Know your audience. You'll probably want several versions of your business plan—one for bankers or venture capitalists, one for individual investors, one for companies that may want to do a joint venture with you rather than fund you, etc.

3. Have proof to back up every claim you make. If you expect to be the leader in your field in six months, you have to say why you think so. If you say your product will take the market by storm, you have to support this statement with facts. If you say your management team is fully qualified to make the business a success, be sure staff resumes demonstrate the experience needed.

4. Be conservative in all financial estimates and projections. If you feel certain you'll capture 50 percent of the market in the first year, you can say why you think so and hint at what those numbers may be. But make your financial projections more conservative—for example, a 10 percent market share is much more credible.

5. Be realistic with time and resources available. If you're working with a big company now, you may think things will happen faster than they will once you have to buy the supplies, write the checks and answer the phones yourself. Being overly optimistic with time and resources is a common error entrepreneurs make. Being realistic is important because it lends credibility to your presentation. Always assume things will take 15 percent longer than you anticipated. Therefore, 20 weeks is now 23 weeks.

6. Be logical. Think like a banker, and write what they would want to see.

7. Have a strong management team. Make sure it has good credentials and expertise. Your team members don't have to have worked in the field, but you do need to draw parallels between what they've done and the skills needed to make your venture succeed. Don't have all the skills you need? Consider adding an advisory board of people skilled in your field, and include their resumes.

8. Document why your idea will work. Have others done something similar that was successful? Have you made a prototype? Include all the variables that can have an impact on the result or outcome of your idea. Show why some of the variables don't apply to your situation or explain how you intend to overcome them or make them better.

9. Describe your facilities and location for performing the work. If you'll need to expand, discuss when, where and why.

10. Discuss payout options for the investors. Some investors want a hands-on role; some want to put associates on your board of directors; some don't want to be involved in day-to-day activities. All investors want to know when they can get their money back and at what rate of return. Most want out within three to five years. Provide a brief description of options for investors, or at least mention that you're ready to discuss options with any serious prospect.

And here's what not to include in your business plan:

1. Form over substance. If it looks good but doesn't have a solid basis in fact and research, you might as well save your energy.

2. Empty claims. If you make a statement without supporting it, you may as well leave it out. You need to follow-up what you say in the next sentence with a statistic, fact or even a quote from a knowledgeable source that supports the claim.

3. Rumors about the competition. If you know for sure a competitor is going out of business, you can allude to it, but avoid listing its weaknesses or hearsay. Stick to facts.

4. Superlatives and strong adjectives. Words like "major," "incredible," "amazing," "outstanding," "unbelievable," "terrific," "great," "most," "best" and "fabulous" don't have a place in a business plan. Avoid "unique" unless you can demonstrate with facts that the product or service is truly one of a kind. (Hint: Chances are, it isn't.)

5. Long documents. If readers want more, they'll ask.

6. Overestimating on your financial projections. Sure you want to look good, but resist optimism here. Use half of what you think is reasonable. It's better to underestimate than set expectations that aren't fulfilled.

7. Overly optimistic time frames. Ask around or do research on the Internet. If it takes most companies six to 12 months to get up and running, that's what it'll take yours. If you think it'll take three months to develop your prototype, double it. You'll face delays you don't know about yet—ones you can't control. Remember to be conservative in your time predictions.

8. Gimmicks. Serious investors want facts, not gimmicks. They may eat the chocolate rose that accompanies the business plan for your new florist shop, but it won't make them any more interested in investing in the venture.

9. Amateurish financial projections. Spend some money and get an accountant to do these for you. They'll help you think through the financial side of your venture, plus put the numbers into a standard business format that a businessperson expects.

This article is included in Entrepreneur Voices on Elevator Pitches , a new book containing insights from both sides of the board room to help you craft the perfect pitch. Buy it online from Amazon | Barnes & Noble | Apple Books | IndieBound

Entrepreneur Staff

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10 Elements of Business Plan & Business Plan Preparation

1.1 INTRODUCTION

A business plan is a precise outline sketch of the entire business to be pursued. The size of a business plan varies with respect to the nature, purpose and investment plans of a business. While some business plans run to 10 pages quite a few business plans run to even 100 pages. This corresponds to the holistic structure of the business proposed for progress. Whether small or big every business necessitates a perfect strategic plan for two significant reasons namely comprehension and validation prior to execution. This helps both the entrepreneur and the financier to understand the scope and potentiality of the business plan.

1.2. FUNDAMENTALS OF A BUSINESS PLAN

The Entrepreneur Magazine states that a typical business plan comprises 15 to 20 pages on the whole. All business plans consist of formal portions like table of contents and the title page. A complete business plan constitutes three phases namely, Business Concept, Target Market and Finance Generation.

1.3. NECESSITY OF A BUSINESS PLAN

A business plan is an inevitable mandate drafted with an aim of self-explorative analysis of all facets of the entire business. The utility of a business plan has a few parametric progresses.

• Primarily it focuses on the business objectives using appropriate information and reassurance of analysis.
• It serves as the best marketing tool of a business especially in getting accustomed to business relationships like investors, share holders, bank personnel and target customers or clients.
• It is the best possible means of unveiling the lacuna of the business planning
• Business plans are the best way to consult experts’ advice from successful entrepreneurs of the same prospects.

  1.4. FUNDAMENTALS OF A BUSINESS PLAN

Every business plan sprouts from a Business Vision which further with the assistance of Right Financiers delves into Team Dynamics for Corporate Management. Therefore, it becomes mandatory to discuss the building blocks of a business plan namely, Business Vision, Business Investments, Team Dynamics and Corporate Management.

1.4.1. Business Vision

Generally, any business gains momentum in due course of time. The prime factor of this aspired effectiveness combined with the progress of a business has its strong foundation on its vision. As a matter of fact, the business vision paves the way for the progress of the business by setting incessant goals and parameters for incessant observation of the existing societal trends besides the bridging methods of catering to the customers’ interests. Perhaps, this helps the company to implement innovative metrics for continual growth assessment of the business in addition to its prospective extensions on a global perspective. Precisely the business vision serves to be the blue print of the entire business and its progress.

1.4.2. Business Investments

Bare words buy no barely is a saying. Similarly, the utility of a business vision shall be observed only through its explicit execution rooted on the requisite financial support and investments. The best financial plan is the secret of achieving the anticipated annual turnover of the business. The other benefit of a financial plan is the acquired foresight of its potential profits besides its growth chart. Usually all innovative financial planning curtails the outflow of finance from the firm. Instead, the best investment plan procures all targeted in flow of finance through its phenomenal strategies. The best finance plan of a business investment perhaps even widens the scope of the  business by attracting the attention of the additional financial partners, investors and share holders.

1.4.3. Team Dynamics

The members of the organizational chart starting from the employer to the employee need to possess the spirit of unanimous team dynamics for uplifting the business profile of an organization. The coordination of the workers, the appropriate assistance of team leaders, proper guidance from management representatives, regular feedback from the Human Resource department, immediate execution of remedial measures in case of set-backs when informed by product quality assurance department, the expertise of marketing and sales department, the care and concern of customer care division or client service department are the essential functionalities of the team dynamics of a business. Each worker of every section mentioned here is like an essential brick of colossal building called a business organization. If there is a defect found in a single brick the entire citadel called business will crumble down into pieces. Precisely, team dynamics rely obviously on the holistic coordination of the entire organization from the layman to the entrepreneur.

1.4.4. Corporate Management

Corporate Management is the promising part of the success of one’s business. It exhibits a streamlined administration of a business besides giving reliable input on managing the company resources and practicing cost cutting proximities of a corporate. The effective managerial adeptness of an entrepreneur perhaps gets reinstated by the preparation of a winning business plan. The phenomenal progress of the business actually depends on the magic wand called a business plan which in fact assumes an indispensable portion of the corporate management. Therefore, a business plan has to be well prepared after gathering adequate data and essential authentication for a promising future of the business. Such a plan, indeed, is generally built on a sound business concept that gets simplified through necessary graphical representations compiled with the help of confidential business advisors. The strength of the corporate  management of a company shows its proportionate progress in the achievement of the company objectives from the top level to the bottom.

1.5. SEGMENTS OF A BUSINESS PLAN

The significant concept of a business plan is to embark on the business potentialities and its targeted progress over a period of time. The plan is ought to be comprehensive besides, showing clarity on its intentions. Therefore, simplifying the objectives of the business opens an avenue for a person to gain momentum with all dimensions of the business progress. This description sets a foreground which further promotes a clear cut understanding of the entire business. Moreover, it widens the scope of the business as it explicitly presents the indispensable facets of business like Products, Services and Targeted Customers. These facets are further simplified under seven indispensable elements of business namely,  Business Summary Business Description Market Strategies  Competition Analysis Design & Development  Operation & Management Finance plans  At this point the focus shall be laid on the strategies of preparing an individualized business plan further to the elements to be briefed in the consecutive sections of this lecture to make it easily understandable.

1.6. PREPARATION OF A BUSINESS PLAN

A business plan is an official agenda written in a formal language. It is entwined with business objectives in addition to the description on their attainable methods. It also constitutes the vital data of the entire organization. It comprises three phases namely, Business Summary, Business Plan and Appendix. While the first phase titled Business Summary presents a preamble to the  business, the second phase called Business Plan concentrates on Business Description, Market Strategies, Competition Analysis, Design and Development and Operation Management. Ultimately the third phase projects the Financial Plans of the business to be pursued. On the whole, these three phases gives an overt emphasis on all facets of the business.

1.6.1 Business Summary:

This portion generally serves an introduction to the entire business plan. It usually runs from 2 to 3 pages. This portion shall comfortably fix the introductory arena for propagandizing the entire business plan. This is also one of the sales strategies to attract the share holders or stake holders, clients or customers, employees at all levels and funding agencies or financiers. The 3’I’ formula shall be adapted to draft this portion successfully. Here the first ‘I’ stand for Innovative business concepts, second ‘I’ represents Interesting presentation of business concepts and the third ‘I’ implies the Indispensability of business concept narrated. Hence, the effectiveness of a Business Summary depends on Innovation, Interest and Indispensability of the potential business to be pursued.

1.6.2 Business Description

A Business Description is the crucial portion of a Business Plan. This portion runs to 15 – 50 pages based on the capacity of business plan made. This narrative segment comprises quite a few minute functionalities of the business plan namely, Market Strategies, Competition Analysis, Design & Development in addition to Operation & Management. This section exhibits the organizational structure of the proposed business. The designation of each employee from top to bottom is primarily described with a title in this section. Moreover, the duties of each employee are briefed in a simple language for better understanding of everyone who reads the business plan. The hierarchy of the entire business structure is titled including the board of directors and members of the management team. The share holder particulars are also explicitly mentioned in this section. There are certain instructions to be followed during the preparation of a business description. They are

§   Practicing the appropriate formatting procedure of the document

§    Narrating the company particulars in the prime sections

§    Giving the perspectives of the market analysis

§    Pronouncing the company’s organizational structure

§    Revealing the particulars of top management representatives

§    Briefing on the products and services to be rendered

§    Exhibiting the marketing nuances to be followed

§    Expressing the fund request particulars if necessary

The components of a business description namely market strategies, competition analysis, design & development further to the operation & management shall be discussed further for better understanding.

Market Strategies – A Business Description is three fourth portion of a business plan. Its prime success depends on its marketing strategies of the business. The systematic practice of marketing strategies to be practiced is to be clearly elaborated in this section. The inevitable criteria of a business description have to re-assure the innovative business concepts based on the demand and supply justification to be appreciably supported by its marketing strategies. Whether there is a necessity for advertising of the business product has to be well-explained in this section if the marketing strategy is pursued through advertisements. In such case the type of advertisement, the impact aspired by the advertisement mechanism on the target customers shall be appropriately addressed in this section. Irrespective of low and high budget marketing tools the precision of mode of marketing have to be necessarily described at this point.

Competition Analysis is another component of a business description. This portion is to clarify the maximum awareness of the existing and futuristic competitors of one’s business. This section has to written with the help of expert business analysts who possess the corporate ingenuity of prediction of competition market corresponding to their potential analysis of the business to be pursued. The foresights of the business analysts actually prove to be a boon for the corporate to be emerged in full fledge. This section needs adequate justification for each argument to be put  forth in support of the business. Graphical representation of existing competition and expected competition to emerge in future shall also be presented in this section.

Design & Development perhaps is a crucial portion of any business. The appropriate methodologies of the business design to be practiced combined with the development avenues of the business are to be notified here. This portion as a matter of fact gives overt clues on the investment plans in the ways of infrastructure, machinery or tools purchase, investment plans on raw materials and consumables. The percentage proportion of investments from the capital investor and the distributed percentage of share holders are precisely estimated in this section. In case of the extension services the funding organizations are utilized, it becomes a mandate to provide all requisite data about the funding procedure along with the benefactor and beneficiary roles in the business.

Operation & Management gains equal importance as design and development of a business. The functionalities of the entire business have to be explained with the help of the organization chart presented in the business description section. However, this section possibly narrates the powers vests with each essential head of the corporate from top to bottom. This section draws a clear cut distinction between the employer’s powers and the employee rights bridged by the human resource policies of the entire business. Company Finance Policies like Pay roll fixation provision of Health insurance policies, Provident Fund, Gratuity & Pension particulars of each employee shall be mentioned in this section.

1.6.7 Finance Plans

This is the third phase of a business plan. This phase exclusively deals with the finance particulars of the entire business to be taken up. Generally, businesses rely on funding agencies or financiers. In such situations all necessary particulars about the fund generating plan of the business have to be discussed in this section. If the mode of business capital generation is banks, then the details about the loan particulars are to be mentioned under finance plans. The type of loan taken along with the bank particulars which readily sanctions the loan have to be notified in this section for any futuristic clarification, if arises. Particulars like whether the investor is solely  availing the loan or he takes a co-applicant shall also be briefed in this portion. The mode and spells of repayment of the business loan in addition to insurance claim particulars in case of mishaps are to be clearly drafted in this section.

1.7. CONCLUSION

The actual purpose of a business plan is to make an empirical analysis about the pros and cons of the business to be pursued. It may not be an exaggeration to consider a business plan to be a management tool which ensures all operational milestones of a business. Factually speaking a business plan shall be treated as generic business analytic framework applicable for any business before its absolute establishment. However, it may be devised according to the uniqueness of any business proposed. This is indeed observed as a systematic avenue for pondering over the planned business prospects. It would be appreciable if the business plan is drafted in a formal usage of language. In some cases it may ensure several weeks to draft the best business plan. This happens due to the modifications of the business ideas conceived in the mind previously. This leads to the redrafting of the business proposal when the unexpected lapses are observed after drafting the entire structure of the business. It is always a desirable practice to make a checklist and re-examine the prepared business plan. The points to be focused in the checklist after redefining and reassuring them are

• Whether the business plan prepared possesses a holistic approach?
• Are there any traces of sample business plans adapted from Google?
• Does the business plan act as a selling tool?
• Have the business plan taken the experts’ suggestions?
• Have the business competitors identified?
• Are the lapses of the plan notified?
• Whether there is a foresight of adversities and a mention of addressing methods?
• Does the business plan declare the strength and weakness of the top management?
• How frequently the plan has been modified to suit the need?
• Is there a mention of appropriate finance plans

These ten questions certainly help the one who drafts a business plan to reassure the quality of the business through the strategic measures discussed.

• https://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agp4957/$file/elements-of-a-business-plan.pdf?OpenElement
• http://leedsfaculty.colorado.edu/moyes/bplan/Plan/Writing%20a%20Successful%20Bus iness%20Plan%202004v4.pdf
• https://www.extension.purdue.edu/extmedia/ec/ec-735.pdf
• http://www.nedco.gov.tt/Portals/0/Key%20elements%20of%20a%20Business%20Plan. pdf
• http://www.consultgsi.com/docs/Essential%20Elements%20of%20a%20Good%20Busi ness%20Plan.pdf
• http://www.southappfund.com/template_assets/downloads/bus_plan.pdf
• https://www.va.gov/osdbu/docs/vepbusinessplanoutline.pdf
• https://www.khda.gov.ae/CMS/WebParts/TextEditor/Documents/Elements%20of%20t he%20Business%20Plan%20-%20Training%20Center.pdf

Maven Business Plans

What should you consider in preparing a business plan?

Preparing a business plan is important for a new venture or company to determine future plans. While preparing a business plan, it is also useful to focus on some important points and to pay attention to some details while creating your notes. In this guide, we will cover the tips that you should pay special attention to when writing a business plan.

Things to consider in the process of preparing a business plan

Research the competition well.

In the process of preparing a business plan, you need to consider the competition seriously. In today’s conditions, e-commerce companies face serious competition, and it is necessary to be prepared for this. By doing your competitor analysis, you should also include issues such as the competition in the market, large companies and your possible share in the market. Further, you must include what kind of work should be done to stand out in the competition on your business plan.

Pay attention to spelling, language and rules.

As you prepare your business plan for yourself? You can also use this plan for investment talks in the future. To receive investments from institutions that support entrepreneurs, you must have a written business plan. For this reason, it is important that your writing language is correct and that you pay attention to the spelling rules in your plan.

You may not be an editor or a writer, but you can easily learn the basic spelling rules. If you are not sure about your writing language and rules, you can also consider getting support from someone you think is good at it. Otherwise, it is advisable to hire the best business plan writer. Not paying attention to spelling rules and not using appropriate language will create the impression that your business plan is prepared in a sloppy way. This can create a problem for you in investment negotiations. So, It’s best to choose a professional business plan writer .

Be realistic

In the process of preparing a business plan, it is also very important to be realistic about:

• The future plans you share,
• Your financial situation,
• Your business growth plans,
• Your strategies and milestones.

Unrealistic plans can do you double harm. First of all, having a dream that is very difficult to achieve can alienate you from your work. Dreams that are difficult to come true may blunt your desire to work after a while, as they will stress you out. However, unrealistic dreams will still be a problem for you in investment negotiations. You will be questioned about how to realize these dreams, and if you do not give good answers to them, you will receive negative feedback. That’s why it’s important to be realistic.

Gradually enlarge the goals.

The process of preparing a business plan is not just a one-time study. You need to update this business plan from time to time. After achievements and milestones are accomplished, you need to update the company’s new strategies and financial plans on the business plan. As I mentioned above, when you make realistic plans, it will be easier for you to achieve them.

For this reason, set your milestones with small goals. Start with small goals such as reaching certain site traffic, achieving a certain number of sales, and achieving a certain profitability rate. And after achieving them, create your new goals and plans. Setting these goals gradually will increase your motivation when you gain them over time, thus strengthening your desire to work and enabling you to work harder.

Include images

When used appropriately, visual elements convey much more information than words can convey. By including visual elements in the business plan, you can expand the scope of your plan and offer more details. You can detail your business plan by using graphics, tables, and striking visuals about your work or the products you offer. Such visuals will help you to visualize some issues, especially in your investment talks, by allowing you to give more information to the other person.

Clearly state your goal and vision.

It is very important that you clearly state your goals and vision in your business plan. To meet and track your goals, you need to keep them in writing. You may forget the plans in your mind over time or ignore them when your motivation drops. However, it is in front of your eyes to include them in the process of preparing the business plan. Since keeping goals in mind is like writing on water, they can be forgotten over time, and no action can be taken.

For this reason, you should keep your short, medium and long-term goals in writing. Likewise, you should keep your company’s vision in writing at hand during this process. Clearly start your vision by focusing on the issues such as what value you add to the consumers, your company’s views, and what you want to achieve with your business model.

Review your writing at least twice

Even if you pay attention to the spelling language and rules we mentioned above, you may involuntarily make typos during the business plan preparation process. In addition to this, speech disorders may also occur. To resolve these, go over your business plan at least two more times after you complete it. The best method for this is usually to come back after a break for a certain time after the writing process is finished.

If you don’t have time problems, you can come back after a break for a day or two and review your articles. Giving your head to other things and freeing your mind not only allows you to see mistakes better but also allows you to see overlooked issues. You can also add or subtract. Another method is to ask someone to help review your plan. Reading by a different person also makes it easier to see errors. It can also give you ideas and help you improve your business plan.

Why is it essential to prepare a business plan?

Preparing a business plan is vital in terms of turning your company’s goals, vision, and financial forecasts into strategies. In addition, it helps you to determine the market situation, competition, marketing and advertising strategies. Writing a business plan allows you to understand even the work you do. And it also allows you to see better what you need to do to grow your business. You can keep a close eye on your goals and identify better strategies to complete your milestones.

In addition to these, as we have mentioned several times above, investors will also ask you for a business plan during investment negotiations. They need this type of information to understand your work, see your goals, and learn about your team. That’s why it’s crucial to have a business plan.

Final Thought

The construction of a Business Plan requires basic administrative, economic, financial, and management skills. If you don’t have time to write business plan, hire our business plan writer . We’ll surely draw a successful roadmap to make your business successful.

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Business plan & Preparation of a Business Plan – Entrepreneurship

Business plan.

• Identifying business opportunities and an innovative idea
• Researching the external environment for opportunities and threats
• Identifying internal strengths and weaknesses
• Assessing the feasibility of that idea and
• Allocating resources in the best possible manner

Objectives of a Business Plan

• To give direction to the vision of Entrepreneur
• To objectively evaluate the future prospects of the business
• To monitor the progress after implementation of the plan
• To seek loans from Financial Institutions
• To facilitate the decision making process
• To persuade others to join the business
• To identify strengths and weaknesses present in the internal environment
• To identify opportunities and threats in the external environment
• To assess the feasibility of the business

Preparation of a Business Plan

  A good business plan must identify strengths and weaknesses internal to the business and the challenges in terms of opportunities and threats to assess the viability of the business. It must lay down all the necessary steps that are involved in initiating and operating a proposed business. Preparation of a business plan involves the following steps :-

(I) Preliminary Investigation – In order to create an effective plan an entrepreneur must –

•  Review available business plans
• Draw key business assumptions on which plan is based
• Scan the environment for Strengths, Weaknesses, Opportunities and Threats
• Seek professional advice
• Conduct a functional audit

(II)   Idea Generation – It involves generation of a new concept/product/service or value addition to an existing Product or Service. The idea must be such that satisfies the existing demands and future demands of market.

  Sources of ideas –

• Existing companies
• Research & Development
• Dealers/Retailers

  Methods of generating ideas –

•  Brain storming
• Group discussion
• Data collection through questionnaires
• Invitation of ideas from professionals
• Value addition to existing Product and Service
• Market research
• Import of ideas from products launched abroad
• Commercializing inventions

Screening of ideas is done to identify practical ones and eliminate impractical one. The most feasible and the most promising idea is selected for further investigation.

(III) Environment Scanning – The internal and external environment must be analysed to study the prospective strengths, weaknesses, opportunities and threats of the business. An entrepreneur must collect information from all formal and informal sources in order to understand the supportive and obstructive factors related to the business enterprise.  

  External Environment –

• Socio cultural appraisal – It involves assessment of the values, beliefs and norms of a particular society in order to understand their perception towards a particular idea or product.

• Technological appraisal – It involves assessment of existing technical know-how and availability of technology necessary to convert an idea into a product.

• Economic appraisal – It assess the economic environment in terms consumer price index, inflation, balance of payments, consumption pattern, per capita income etc.

• Demographic – It involves an assessment of the overall population pattern of a particular region. Variables like age, education, income pattern, sex, occupation, distribution etc. help in identifying the size of target market.

• Government appraisal- It assess various grants, legislations, policies, incentives, subsidies etc. formed by government.

Internal Environment –

• Availability of Raw materials
• Availability of various machines, tools and equipment required for production
• Means of Finance and assessment of opening, maintaining and operating expenses
• Assessment of Present, Potential and Future market
• Assessment of cost, quantity and quality of human resources required

(IV) Feasibility analysis –   Feasibility analysis is done to find out whether the proposed project will be feasible or not. The various variables that are studied include –

(a) Market Analysis – It is conducted to –

•  Estimate the demand of the proposed product in the future
• Estimate the market share of the proposed product in the future

(b) Technical or operational analysis – It is conducted to access the operational ability of the proposed business. It is very important to find out the cost and availability of technology. Under Technical analysis data is collected on following parameters –

•  Material availability
• Material requirement planning
• Plant location
• Plant capacity
• Machinery and Equipment
• Plant layout

(C) Financial analysis – A Financial Feasibility test is carried out to access the financial issues related with the proposed business. The following estimates have to be carried out –

• Cost of land and building
• Cost of plant and machinery
• Preliminary cost estimation
• Provision for contingencies
• Working capital estimates
• Cost of production
• Sales and production estimates

  Based on the above analysis the following projections are made –

• Break-even point
• Cash flow statement
• Balance sheet

(V) Drawing functional plans – If the feasibility plans give a positive indication a draft business plan is formulated. It involves preparation of the following functional plans –

(a) Marketing Plan – A marketing plan lays down strategies for marketing a product/service which can lead to success of business. These strategies are made in terms of marketing mix (4 P’s) i.e. Product, Price, Place and Promotion.

(b) Production/Operation Plan –A production plan is made for a business involved in manufacturing industry while an operation plan is made for business involved in service industry. It includes strategies for following –

• Location and reasons for selecting a location
• Physical layout
• Cost and availability of equipment, machine and raw material
• List of suppliers and distributors
• Cost of manufacturing and running operations
• Quality management
• Production scheduling capacity and Inventory management

(c) Organizational Plan – It defines the type of ownership i.e. it could be a single proprietary, partnership firm, company, private limited or public limited. It also consists of details about the organization structure and norms guiding the organization culture.

(d) Financial Plan – It indicates the financial requirement of the proposed business and furnishes the following details –

• Cost incurred in smooth running of all the financial plans
• Projected cash flows
• Projected income statement
• Projected Break even point
• Projected ratios
• Projected balance sheet

(e) Human Resource Plan – It consists of the details on the following:-

• Manpower requirements
• Recruitment and Selection
• Compensation
• Organization structure
• Wages and Salaries
• Remuneration etc.

(VI) Project Report Preparation –   It is a written document that describes step by step, the strategies involved in starting and operating a business. It is prepared when environmental scanning has been done and feasibility studies have been carried out.

(VII) Evaluation, Review and Control – In order to keep up with the dynamic environment and  successfully face global competition a business must be continuously evaluated and reviewed. It is necessary to periodically evaluate, control and review a business to keep up with the technological changes and introduce changes in the business strategy.

awsmmm business plan , contains enthausiastic

Example of an business plan document

As a senior business analyst, I am looking for tips to advance my career, especially in days of digital transformation and agile transformation.

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White Plains High School program offers students chance to develop business plan

White Plains High School students are getting a shot at their own “Shark Tank” experience through an elective course that fosters their entrepreneurial spirit.

INCubatoredu, a yearlong program in which the school is partnering with the Westchester Innovation Network, a program of the Westchester Business Council, offers juniors and seniors the chance to develop their own business idea. Students spend the year creating a product and a business plan. They eventually pitch their ideas on the regional and possibly the national level, with a chance to compete for investment capital ranging from $5,000 to $25,000.

Rocco Varuolo, K-12 Instructional Technology, Business and Library Media Services coordinator for the district, oversees the program. He said that throughout the year, mentors and coaches from the business world work with the students in helping to bring their ideas and business plans to fruition.

Mentors have included computer scientists, banking executives and local business owners, including one of the owners of the famous Walter’s Hog Dog Stand in Mamaroneck.

High School teacher Ashley LeBlanc, who teaches the course, said, “INCubatoredu sets the bar for project-based learning. Everything students hear, say and do in the classroom is immediately applicable to their own startup.”

In this year’s program, teams of students are working on a range of startup ideas. One team is developing a non-invasive way for people with diabetes to monitor their blood sugar levels, along with an app that will assist in managing the condition. Another team is developing an odor-resistant carrying bag for athletes, while another team is developing a nose-ring-like device that is scented and can be used by workers in industries that involve noxious or unpleasant smells, such as sanitation or janitorial work.

Senior Thiago Baraldi, who considers himself an aspiring entrepreneur and who is planning on studying business in college, says, “I really wanted to get some real-life experience in entrepreneurship, and this class is that perfectly. We get to create with our group of teams, our own ideas and put them into action.”