Writing Your Business Plan.

The Business Plan Outline and Uses

• Starting a business is like building a house; you just can't grab some material and start putting it together.  First you need a vision - a picture in your mind of what you're going to do.  Then you write it down and expand on it until the vision begins to take shape.  This is the conceptual drawing when building a house.  At this point [3 to 4 written pages or 2+ typed] the business will begin to feel real in your imagination.  You are now ready to go to the business plan [the blueprints with a house].
  
  Take the outline of the business plan and fit the information you've created into the appropriate sections.  Don't look at the plan as a restriction on your imagination, but as a means of focusing your thoughts.  Continue to add information to the sections where you know what you want to do.  Some sections will have lots of information; some areas a little; some nothing.  This is good!  It shows you what you know and what you don't know.  The areas that need more information require research or getting someone to help.  This person doesn't have to be a part of the business, just someone with the knowledge to help.  Now, go to Getting Started and get the show on the road.   Getting Started
• The Executive Summary should be a concise picture of the business.  The facts about the business at an executive level without a sales pitch or detailed explanations.  The body of the business plan is where that happens.
  
  One page is the target, but if the product, market or some other aspect needs expanding at the summary level don't be afraid to go to 2 or 3 pages.  If the person reading the executive summary finds it interesting and informative, they'll read it.  The information contained in this summary helps determine if you get the support you're asking for or not.
  
  Whether you're starting with the executive summary or creating it from the business plan draft don't hesitate to put down as much as you can.  If you don't use it here you can use it in the body of the plan.  I'll repeat, it's easier to edit the size down than to expand it later.  The green light, creative mode usually conflicts with your edit, critical mode.
  
  Go to the Executive Summary page and review the details before starting this section.   EXECUTIVE SUMMARY
  • The Business and the Concept
  • The Opportunity and the Strategy
  • The Competitive Advantages.
  • The Economics, Profitability, and Harvest Potential
  • The Team
  • The Offering
• An industry is a distinct group of productive or profit-making enterprises.  That's a simple definition; so, which one are you going to start your business in?  You must answer that question before you can start the business plan process.  Your product, marketing, competition will all be related to that specific industry.
  
  The product [what you're going to sell to people] or service [what you're going to do for people] is the next item that must be defined.  It could be a group of products or services, but they still require definition.  In business the definition not only includes the product or service description, but the price, how to present it, your costs, how it fits into your company and why it's better than the competition.  There's more, but this is a good start.
  
  How you present your product or service will be built on this definition and will be key to the product's entry into the market.  You will also have to layout the plan for growth and expansion of the product or service.  Many people fail because they're not prepared to handle success.  They don't have a plan in place to address rapid growth or expansion of their product(s) or service(s).  They scramble, stumble and miss the opportunity just because they weren't ready.  To be successful plan for success; failure is easy - regroup, cleanup and try again.  THE INDUSTRY, THE COMPANY AND ITS SERVICE (PRODUCT)
  • The Industry
  • The Company and the Concept
  • The Service (Product)
  • Entry and Growth Strategy
• Market research and analysis is the groundwork of the marketing process and prepares for product / service introduction.  You identify your customers and why they want your product or service.  You identify how and when your product or service is delivered.  You identify your competition and any risks or problems that may arise.
  
  Next you will look at the market size from the top down.  Total Market, Available Market, and using the information you've gathered, estimate your own market share.  You'll have to estimate the competitions market share and any impact you will have on them and their portion of the market.  Be prepared to face direct competition if you threaten their market share.  This may impact your pricing and your rollout schedule.
  
  Even when you have established your position in the market place and have an established market share you must continually analyze the overall market and the competition to ensure you maintain or grow your own piece of the market.   MARKET RESEARCH AND ANALYSIS
  • Customers
  • Market Size and Trends
  • Competition and Competitive Edges
  • Estimated Market Share and Sales
  • Ongoing Market Evaluation
• This is an outline of the economics of the business for starting a business plan, business case and for starting the actual business.   THE ECONOMICS OF THE BUSINESS
  • Gross and Operating Margins
  • Profit Potential and Durability
  • Fixed, Variable and Semivariable Costs
  • Months to Break-even
  • Months to Reach Positive Cash Flow
• This is an outline of the marketing plan for starting a business plan, business case and for starting the actual business.   MARKETING PLAN
  • Overall Marketing Strategy
  • Pricing
  • Sales Tactics
  • Service and Warranty Policies
  • Advertising and Promotion
  • Distribution
• This is an outline of the design and development plans for starting a business plan, business case and for starting the actual business.   DESIGN AND DEVELOPMENT PLANS
  • Development Status and Tasks
  • Difficulties and Risks
  • Product Improvement and New Products
  • Costs
  • Proprietary Issues
• This is an outline of the manufacturing and operations plan for starting a business plan, business case and for starting the actual business.   MANUFACTURING AND OPERATIONS PLAN
  • Operating Cycle
  • Geographical Location
  • Facilities and Improvements
  • Strategy and Plans
  • Regulatory and Legal Issues
• This is an outline of the management team for starting a business plan, business case and for starting the actual business.   MANAGEMENT TEAM
  • Organization
  • Key Management Personnel
  • Management Compensation and Ownership
  • Other Investors
  • Employment, Other Agreements, Stock Option and Bonus Plans
  • Board of Directors
  • Other Shareholders, Rights and Restrictions
  • Supporting Professional Advisors and Services
• This is an outline of the overall schedule for starting a business plan, business case and for starting the actual business.   OVERALL SCHEDULE
  • 2 Year Projection
  • 5 Year Projection
• This is an outline of the critical risks, problems and assumptions for starting a business plan, business case and for starting the actual business.   CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS
  • Risks
  • Problems
  • Assumptions
• This is an outline of the financial plan for starting a business plan, business case and for starting the actual business.   THE FINANCIAL PLAN
  • Actual Income Statements and Balance Sheet
  • Pro Forma Income Statements
  • Pro Forma Balance Sheet
  • Pro Forma Cash Flow Analysis
  • Break-even Chart and Calculation
  • Cost Control
  • Highlights
• This is an outline of the proposed company offering for starting a business plan, business case and for starting the actual business.   PROPOSED COMPANY OFFERING
  • Desired Financing
  • Offering
  • Capitalization
  • Use of Funds
  • Investors Return
• This is an outline of the contents for the appendices for starting a business plan, business case and for starting the actual business.   APPENDICES
  • Customer Information
  • Advisor Information
    • Legal, Accounting, Banking
  • ** Reference Material **

Business Plan Uses
The Business Plan is usually used to plan, establish and monitor a business and its operation.   However, a business plan (business case) can be used to analyze a potential market and the customers in that market, not to set up a company, but to introduce a new product or product line.   It can also be used as a marketing tool to show a prospective buyer (customer) how a product will benefit them and their company.   It requires considerable research and work to produce a document to present to the customer but is usually well worth the effort.

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