Business Plan - Typical Contents
The typical contents of a full form business or strategic plan are listed below.
Executive summary
What is the business?
What is the market?
What is the potential for the business?
Forecast profit figures
Funding requirements
Prospects for the investor/ lender
Description of the business
What is the business?
A brief description of the business idea and why it should be a success
History of the enterprise and its ownership
Information about the entrepreneurs qualifications, experience and
financial status
Location
Products and services
A description of the product and what it does
An explanation of ways in which the product is distinctive and unique
Analysis of the competition
How the product will be developed and what new products are being
considered as replacements
Intangible assets & protection (e.g. copyright, trade marks)
The market
Size and expected growth of the market
Analysis of market by segments
Identification of target segments
Competitors - who they are, ownership, size, market share, likely
response to the challenge
Customers (existing & potential) - who they are, how they buy, why
they buy
Distribution channels
Situational audit (where are we now?)
This involves data collection and analysis
Purpose of data collection and analysis:
Determine which opportunities to pursue
Identify SWOT
Identify competitive advantages
Provide a background for the formulation of strategy
Main analytical techniques:
PEST/ PESTLE analysis
SWOT analysis
Competitor analysis
Marketing audit
Statement of aims and objectives (where do we want to go?)
A statement of what the business should achieve over a five year
period
Aims should be expressed in terms of hierarchy of objectives becoming
progressively more detailed and specific
Vision - what the organisation will be like in the future
Mission statement - a statement of the overall purpose and aims
SMART Objectives - quantitative goals.
Functional objectives - objectives for the functional areas
Strategy and tactics
How are we to get there?
Strategy is the broad approach to the achievement of objectives
Summarises how to fulfil the objectives
Tactics refer to the details of the strategy e.g. the promotional mix
The detail will be contained in programmes and budgets
Marketing: key questions to be answered
Who are our customers?
Who are our competitors?
What is the size and growth rate of the market?
How is the market segmented?
What is special about our product or service?
What are our competitive advantages?
What is our marketing strategy?
Marketing plan
Market research
Segmentation and targeting
Detailed outline of the product or service
Unique selling points
Chosen pricing strategy
Promotional plans
Distribution strategy (including online)
Customer service strategy
Operations plan
Physical location
The production process
Facilities
Equipment
Scale & location of operations
Capacity - potential and effective
ICT strategy
Engineering and design support
Materials required
Inventory levels and stock control plans
Purchasing arrangements
Sources of supply of key resources
Quality control plans
Staffing requirements
Management and organisation
Organisational chart
Details of senior management
Corporate governance
Staffing requirements
Key personnel
Recruitment and selection
Training
Rewards (financial & non-financial)
Labour relations
Employment and related costs
Forecasts in the business plan
Sales forecast
Forecast profit and loss account (income statement)
Cash flow forecast (cash budget)
In each case this should be a month by month forecast for a minimum
of two years
Forecast balance sheet for each of the first two years
The assumptions behind the forecast should also be included
Financial data
Investment appraisal - payback and discounted cash flow
Break even analysis
Evaluation criteria for performance review
Ratio analysis: net profit margin, Gross profit margin, return on capital
employed, liquidity and solvency analysis
Financing required
Details of capital required and uses
The plan must include details of the external finance required
This will be equal to the finance required less finance raise internally
from existing owners and from operations
The plan will outline how it is proposed to raise the finance
Sources of finance: Short, medium and long term; Debt v equity
Contents of a Written Business Plan
COVER PAGE
The cover page should include the following:
A. Company Name
B. Logo
C. Contact Person
D. Address and Phone Number
E. Date and State of Incorporation
F. Confidentiality and Nondisclosure Statement
TABLE OF CONTENTS AND TABLE OF APPENDICES
The table of contents and table of appendices should refer the reader to the
sections and subsections of the business plan.
EXECUTIVE SUMMARY
The executive summary is the first part of the business plan to be read by
potential lenders and investors. In the case of a poorly written executive
summary, the executive summary is often the only part of the business plan
that gets read. Accordingly, you should take the time necessary to prepare a
dynamic executive summary that describes the business, identifies the stage
of the company and its strategic direction, describes the company's market
and marketing plan, briefly discusses the background of management, and
states the company's revenue and profit expectations. Remember, you only
get one chance to make a good first impression.
BODY OF BUSINESS PLAN
The body of the business plan should include detailed discussions of the
following subjects:
I. Background and Purpose
A. History - a brief overview of the history of the company
B. Current Status of Company
C. The Product or Service Concept
D. Business Objectives
II.
A.
B.
C.
D.
Market Analysis
Overall Industry or Market
Specific Market Segment
Competition
Sales Forecasts
III.
A.
B.
C.
D.
E.
Product or Service Development
Research and Development
Production Requirements and Process
Proprietary Features and Protections Thereof
Quality Assurance Measures
Contingency Plans
IV.
A.
B.
C.
Marketing
Survey Results
Marketing Strategy
Contingency Plans
V. Financial Data
A. Current Financial Position
B. Accounts Payable
C. Accounts Receivable
D. Cost Control Measures
E. Break-Even Analysis
F. Financial Ratios
G. Financial Projections
VI. Organization Structure and Management
A.
Key Personnel -- describe the qualifications and responsibilities of
management.
The quality of management is often the key factor in
obtaining debt or equity funding.
B. Other Personnel
C. Directors and Advisors
D. Professional Advisors.
E. Key Future Personnel
F. Forecasted Labor Force
VII. Ownership
A. Business Structure
B. Current Capitalization
C. Forecasted Capitalization -- how much money will be sought, the form of
the proposed investment, how the funds will be used, and the percentage of
ownership to be provided in exchange for the investment
D. Exit Strategy -- how and when investors will be able to get their money
out of the business
E. Royalty or Licensing Arrangements
VIII. Risk Factors
Describe the key risks facing the company, including risks presented by:
A. Cost Overruns
B. Failure to Meet Production Deadlines
C. Problems with Labor, Suppliers, or Distributors
D. Sales Projections not Met
E. Unforeseen Industry Trends
F. Competition
G. Unforeseen Economic, Social, or Political Developments
H. Technological Developments
I. Inadequate Capital
J. Business Cycles
K. Other Risks
IX. Conclusion
A. Summary
B. Timetable for Funding and Future Developments
APPENDICES
A. Photograph of Product or Service
B. Sales and Profitability Objectives
C. Market Surveys
D. Production Flowchart
E. Marketing Materials
F. Advertisements
G. Press Releases
H. Historical Financial Statements
I. Table of Current Profit and Loss Statement
J. Projected Profit and Loss Statement
K. Cashflow Projections
L. Balance Sheet
M. Projected Balance Sheet
N. Asset Acquisition Schedule
O. Break-Even Statement
P. Key Contracts
Product Launch
SCAMPER is a mnemonic that stands for:
Substitute.
Combine.
Adapt.
Modify.
Put to another use.
Eliminate.
Reverse.
You use the tool by asking questions about existing products, using each of
the seven prompts above. These questions help you come up with creative
ideas for developing new products, and for improving current ones.
Alex Osborn, credited by many as the originator of brainstorming, originally
came up with many of the questions used in the technique. However, it was
Bob Eberle, an education administrator and author, who organized these
questions into the SCAMPER mnemonic.
Example Questions
Let's look at some of the questions you could ask for each letter of the
mnemonic:
Substitute
What materials or resources can you substitute or swap to improve
the product?
What other product or process could you use?
What rules could you substitute?
Can you use this product somewhere else, or as a substitute for
something else?
What will happen if you change your feelings or attitude toward this
product?
Combine
What would happen if you combined this product with another, to
create something new?
What if you combined purposes or objectives?
What could you combine to maximize the uses of this product?
How could you combine talent and resources to create a new
approach to this product?
Adapt
How could you adapt or readjust this product to serve another
purpose or use?
What else is the product like?
Who or what could you emulate to adapt this product?
What else is like your product?
What other context could you put your product into?
What other products or ideas could you use for inspiration?
Modify
How could you change the shape, look, or feel of your product?
What could you add to modify this product?
What could you emphasize or highlight to create more value?
What element of this product could you strengthen to create
something new?
Put to Another Use
Can you use this product somewhere else, perhaps in another
industry?
Who else could use this product?
How would this product behave differently in another setting?
Could you recycle the waste from this product to make something
new?
Eliminate
How could you streamline or simplify this product?
What features, parts, or rules could you eliminate?
What could you understate or tone down?
How could you make it smaller, faster, lighter, or more fun?
What would happen if you took away part of this product? What
would you have in its place?
Reverse
What would happen if you reversed this process or sequenced things
differently?
What if you try to do the exact opposite of what you're trying to do
now?
What components could you substitute to change the order of this
product?
What roles could you reverse or swap?
How could you reorganize this product?
Example: Imagine that you are a producer of computers and printers, and you use
SCAMPER to aid you in the process of looking for new products.
SUBSTITUTE
- use of virtual resources hosted on the internet?
COMBINE
- integrate computer and printer, printer and scanner
ADAPT
- put high quality ink in printer, use high quality paper
MODIFY
produce different shape, size and design of printer and
computer
PUT TO OTHER USES - printers as photocopies or fax machines
ELIMINATE
- eliminate hard disks, colour ink etc
REARRANGE
-make computer desks as well as computers and printers, or
computer chairs
etc
NB. Many of the ideas may be unfeasible or may not suit the equipment used by the
manufacturer, but some ideas could be good starting points for discussion of new
products.
