Credibility – Whether a banker or investor actually reads your entire business plan is besides the point. Handing over a nicely bound and professionally written business plan to your banker will provide immediate credibility that you have done the work.  On the other hand, if you simply write a one page business plan, which is essentially an executive summary, it will look like you have not done the work and the research to validate your business endeavour.  The business plan gives the banker or potential investor the impression that you have at least considered items like your competition, your marketing plan, and your business model.

Business Plans are for Internal Use – The purpose of a business plan is not only to appease a banker or investor, rather a business plan can be valuable for internal use.  If you have a simple one page business plan you will probably run out of direction for your business after week one.  Your business plan should be an internal road map for you business that is constantly changing and adapting with the competitive environment you find your business in.

The Purpose of an Executive Summary is to Intrigue the Reader – If your executive summary or one page business plan is successful, it will intrigue the banker or investor to ask for more questions or more detail about your business.  If all you wrote was an executive summary, what extra detail can you provide?  A full business plan will allow you to provide interested parties with additional detail regarding your business.

Ultimately there are a number of reasons why you should write a full business plan.  The value of a one page business plan or an executive summary is that is compels the reader to ask for more.  It should be intriguing and should supplement a document that provides the reader with more detail on any aspect of the business that they wish to learn more about.  Keep this in mind as you consider taking the easy way out when writing your business plan.



So what are the essential needs of a business plan?  First you need to know a few things before you get started.  A typical business plan will run between 15 – 20 pages, not to let that restrict you, it’s just the norm.   The length will really depend on the nature of the business.   Second, everyone can use a plan, not just start up companies.  Business plans are used for every major company to every minor company.

Creating a business plan can have a range of objectives.  Knowing these objectives can be an important step to defining the type of plan you need.  Remember, several templates exist on the internet as good reference material.   So what kind of things do you need to plan in order to make a plan?  Some things, such as your objectives will be easy to identify.  Other things to plan out are the financial goals, implementation and your growth potential.

Now we have the creative juice flowing.  It is time to put it all into practice.  The structure of a business plan is very important.  The first section is the last written, it is the executive summary.  This is for the lazy people who do not want to read the entire plan.  It essentially summarizes the entire plan in one or two pages.   The second section, and the first one written should be the business description.  Answer the who, how, when, where and why.   The what is also important… What are you providing.

This description should provide a good basis for the rest of the plan, think of it as an introduction.  Next come the marketing strategies and the competitive analysis.   In order to be a successful business you have to know your competition, and know how to beat them.  This is a simple way to make sure you know who you are going up against. 

Next comes the meat and potatoes.  These can be summed up in the Design and Development Plan, and the Operations and Maintenance Plan.  These two in depth plans look at how the business will operate, and how you will generate income.  It also illustrates how you will become a bigger company, your growth and development.  The last step is to tie it all together with the financial components.

Sounds like a lot of work.  Again, remember there are several templates available to use as reference.  The only suggestion is that it does not have to be perfect the first time around.  You can revise it, perfect it, change it.  Remember it is your business, so therefore it is your business plan.  Follow the above steps and find a template to help you.  You will have a plan and investors in no time.

By Indeshaw Adenaw

Success in business comes as a result of planning. You have to have a detailed, written plan that shows what the ultimate goal is, the reason for the goal, and each milestone that must be passed in order to reach your goal.

A business plan is written definition of, and operational plan for achieving your goal. You need a complete but success tool in order to define your basic product, income objectives and specific operating procedures. YOU HAVE TO HAVE A BUSINESS PLAN to attract investors, obtain financing and hold onto the confidence of your creditors, particularly in times of cash flow shortages–in this instance, the amount of money you have on hand compared with the expenses that must be met.

Aside from an overall directional policy for the production, sales effort and profit goals of your product–your basic “travel guide” to business success–the most important purpose your business plan will serve, will be the basis or foundation of any financial proposals you submit. Many entrepreneurs are under the mistaken impression that a business plan is the same as a financial proposal, or that a financial proposal constitutes a business plan. This is just a misunderstanding of the uses of these two separate and different business success aids.

The business plan is a long range “map” to guide your business to the goal you’ve set for it. The plan details the what, why, where, how and when, of your business–the success planning of your company.

Your financial proposal is a request for money based upon your business plan–your business history and objectives.

Understand the differences. They are closely related, but they are not interchangeable.

Writing and putting together a “winning” business plan takes study, research and time, so don’t try to do it all in just one or two days.

The easiest way to start with a loose leaf notebook, plenty of paper, pencils, pencil sharpener, and several erasers. Once you get your mind “in gear” and begin thinking about your business plan, “10,000 thoughts and ideas per minute” will begin racing thru your mind…So, it’s a good idea when you aren’t actually working on your business plan, to carry a pocket notebook and jot down those business ideas as they come to you–ideas for sales promotion, recruiting distributors, and any other thoughts on how to operate and/or build your business.

Later, when you’re actually working on your business plan, you can take out this “idea notebook” evaluate your ideas, rework them, refine them, and integrate them into the overall “big picture” of your business plan.

The best business plans for even the smallest businesses run 25 to 30 pages or more, so you’ll need to “title” each page and arrange the different aspects of your business plan into “chapters.” The format should pretty much run as follows:

Title Page Statement of Purpose Table of Contents Business Description Market Analysis Competition Business Location Management Current Financial Records Explanation of Plans For Growth Projected Profit & Loss/Operating Figures Explanation of Financing for Growth Documentation Summary of Business & Outlook for The Future Listing of Business & personal References

This is a logical organization of the information every business plan should cover. I’ll explain each of these chapters titles in greater detail, but first, let me elaborate upon the reasons for proper organization of your business plan.

The first, and most popular, part of a business plan is the Executive Summary. It provides an introduction to the company, its business opportunity, products or services, current business position, financial potential, and a closing paragraph stating what you want from the reader. Remember, this is a summary – most of these topics will be explained in more detail later in the business plan. The Executive Summary is the most important section since it will be read first and is used to entice the audience to read more of the business plan.

The second topic is the Company Background. This section tells the story of how the company began and why. It also describes the ownership of the business and business type (Sole Proprietorship, Partnership, S Corporation, C Corporation, Limited Liability Company).

The third topic is Products. It describes the product, competitors, market research and demand, and suppliers. The fourth topic is Services. This is similar to Products except that with services, a business plan needs to explain how the service will be provided. The Products and Services sections are an example of how an entrepreneur or business owner needs to apply the sections that work best for them. Some companies will have products, some will have services, and some will have both.

The fifth topic of a business plan is an analysis of the Industry, Competition, and Market. This section includes in-depth details about the current condition and trends for the industry, specific companies that will be the primary competitors, the market size, projected market growth, and the characteristics or profile of a typical customer.

The sixth section is the Marketing Plan. A marketing plan is important because it describes how the company will reach its revenue goals. It should outline the promotional plans and distribution channels, and explain pricing and the company’s competitive advantage.

The seventh section of a business plan is the Operating Plan. An operating plan talks about what is needed to operate the business, such as employees, equipment, the location, and supplies. It describes how the business will be run on a day-to-day basis.

The eighth section goes over Management, Organization, and Ownership. It will include information about outside consultants, including attorneys, accountants, and advertising professionals. Typically, investors will need to feel comfortable with the owners, advisory board, and managers before they back a venture.

The ninth section of a business plan is Goals and Strategies. Discuss business goals, such as increasing market share, expanding into new markets, adding a location, and sales revenue. It’s important that these goals are as realistic as possible.

The tenth section is the Financial Projections. This can be the most intimidating part of a business plan for most people. But, with a good idea of your expenses and projected income, business planning software can automatically prepare financial statements for you.

Business planning software helps entrepreneurs and business owners prepare their entire business plan by providing examples of each topic, practical advice, and a list of start-up resources. Even though every business plan may be different, using a standard process found in business planning software can help walk you through each of the top 10 sections found in most business plans

As your mind is occupied with other aspects of setting up the business or trying to implement business expansion strategy, you may not be able to come forth with a sound plan, especially if you do not have skills in creating such an important piece that determines the success of your business. Therefore, hiring a professional business plan service provider is the best option at your disposal.

Business Plan Cost

The entire cost you will incur when hiring the services of a business plan writer is largely determined by the aspects of the service you want handled for you. For instance, you may opt to have the service provider write only the business plan and leave out the marketing strategy. On the other hand, it is likely to cost more when both the plan and marketing strategy are undertaken by the expert. A good number of the business plan services do not charge for consultation and would also offer free business plan quote.

Tips on Choosing a Business Plan Provider

Sometimes, it could help substantially to search and read business plan writers reviews online to help you make a better choice. However, ensure that the reviews are genuine, visit sites that offer honest reviews of such services. You may also choose to use business plan software to write your business plan; again, it’s a good idea to read genuine business plan software reviews online.

Business Plan Service Process

For most business plan services, the same process applies but may vary slightly.

This is how it goes;

You will first of all undergo an interview with the business plan service provider along side with your management team. The essence is to capture a good picture of your intended business or an existing one in order to build a solid and relevant plan thereafter.

Subsequently, the business plan service will conduct an extensive research which will include studying related businesses to aid them in structuring relevant content for your business plan. There may be need for revisions along the line in order to come forth with the best plan. Usually, you will be consulted all along to ensure that you participate in the structuring of your business plan. They will also advise you accordingly on marketing strategies (or even come forth with excellent marketing strategies for you if you choose so) and business finance sources.

Bear in mind that a sound business plan is necessary to get financial assistance and funding for your business. This is why you must choose a business plan writer wisely, and ensure that your investment in business plan will pay you off excellently at last.

Completing a business plan can seem overwhelming. I have many clients who tell me the operations of the business are in their head and yet cannot develop a logical, cohesive formula to put on paper. More often than not, unless you purchase a business plan template, you are going to be overwhelmed by the sources of business plan outlines on the web. All of them are good because like every business, each business plan is unique. There is no right or wrong way to do a business plan. There is no ”standard” length of a business plan. But all plans should contain the same basic information.

Here is an outline that I find most useful and one that I hope can help you. Please understand that it can be used for about any business in any industry. However, you should tailor it to your needs. For instance, if you are a start up, the plan does not need a section for Age, Size, and Past Performance. Here are some useful hints:

Include a Table of Contents.
Number the pages.
Write for your audience. If the plan is going to a loan officer assume the person knows nothing about your industry. Do not use technical language or if you must, explain it. Do not use industry acronyms unless they are spelled out the first time you use them in the plan.
In the Executive Summary the plan should state what the purpose of the plan is. Is it for a SBA loan, is it to be presented to investors, or is it an annual plan for the team?

I.          EXECUTIVE SUMMARY

A.  What the organization is and does

B.  Who will purchase the product or service

C.  Why am I uniquely qualified and skilled in managing the business

D.  What are the financial results expected

E.  How much capital is required, what will it be used for, and the sources of capital

F.  Assessment of risks

II.         BUSINESS CONCEPT

A.  Describe the unique qualities and value to customer of product or service provided

B.  Age, size and past performance of business

C.  Vision, along with short and long-term objectives with milestones

III.       PRODUCTS AND SERVICES

A.  Description

B.  Product life cycle

C.  Intellectual property

D.  R & D activities

IV.       MARKET ANALYSIS

A.  Industry Analysis

      1.  Future outlook and trends

      2.  Current business conditions – national, regional, specific market

B.   Identify target market

C.  Analysis of competitors    

D.  Market test results

E.  Regulatory environment

V.        MARKETING PLAN

A.  Marketing philosophy/organization

B.  Advertising and promotion

C.  Product price and sales terms

D.  Production capacity

E.  Distribution

VI.       OPERATIONS

A.  Location of business and special facility equipment needs

B.  Steps involved in producing product or service

C.  Suppliers

D.  Costs to produce product or service

E.   Personnel requirements    

F.   Licenses and permits needed

VII.      OWNERSHIP, MANAGEMENT AND ORGANIZATIONAL PLAN

A.  Organizational structure

B.  Key managers, functions and qualifications

C.  Legal form of ownership

VIII.     FINANCIAL DATA

Include a narrative of Financial Assumptions. How did you come up with the sales numbers, are there any extraordinary expenses, etc.?

A.  History, if applicable

B.  Income statements (projected)

C.  Cash flow forecasts (if you are going to present this to a lender or investor the cash flow forecast is most critical)

D.  Balance sheets (pro forma)

E.   Breakeven analysis

F.  Working capital analysis

G.  Source and applications of capital

IX.       CRITICAL RISKS

A.  Potential problems that could arise and their likelihood

B.  Plans to manage problems

X.        EXHIBITS

Once again, this is not the “right” outline, but rather, one that I find useful. I hope it helps you.

Whilst a high grade consultant can assist you by asking these questions, this approach can be quite cost prohibitive for many businesses, with plans costing upward of k USD.

We have pioneered a new approach to business planning called “Question Led Business Planning”.  This approach leverages our experience in building hundreds high end business plans for clients.

Marcus Tarrant, CEO of Business Planning HQ says

“We know the questions that need to be asked to prepare a quality business plan and our clients know the answers.  Why not take the cost out of the planning process by populating those answers directly into the business plan?”

This approach has been proven to:

Improve the clarity of message – by just answering specific questions, the content is far more targeted than what most people are able to achieve when writing freeform

Accelerate the business planning process – For most businesses it will take at least 5 days of effort to prepare a business plan with high level financials.  The Business Planning HQ approach reduces the effort required to less than 4 hours, and provides a simple guided structure.

Remove the burden of sentence structuring – The requirement to clearly structure sentances can distract a non-professional writer from the core messages they are trying to communicate.  By simply answering a question, the requirement for sentence structuring is much reduced.

Eliminate the need for consideration of the document structure – Many businesses will spend days even weeks, just settling on the right structure.  With Business Planning HQ structural issues are taken care of by experts that have created hundreds of plans.

Enable an automatically generated Pitch Pack – Because the answers to questions are the source of content in a question led approach.  These answers are highly re-usable in a variety of forms, from one page overviews, to an entire pitch pack.  This approach provides the flexibility to automate much documentation associated with the business planning and presentation process.

Business Plan Reason#1: Finding an investor
A Business plan, often referred to as an information memorandum is usually the foundation document on which an investment is made.  Investors have specific requirements of a business plan, and have a desire to see how they will realize a return on their investment. A clear exit strategy provides a an understanding of how the funds will be returned to the investor.  Each investor may have a different investment horizon and the plan should reflect a return in that investment horizon.  The best place to start with preparing an investment business plan is to identify your potential investors first.  Understand as much as possible about their investment criteria before you start writing.

Business Plan Reason#2: Obtaining a loan

Obtaining a loan requires formal documentation of the business opportunity, prospects and financial implications.  Loans usually require a higher level of certainty than investors.  These plans should be realistic with clearly documented rationale and assumptions.  There needs to be as much focus on solid numbers as there does on the business vision and strategy.  Bankers often have set criteria for investment and as much as possible should be understood about approval guidelines as possible before the plan is constructed.

Business Plan Reason#3: Demonstrating Compliance

Obtaining required operating licenses and permits can drive the creation of a business plan.  These audiences are looking for effective processes and governance associated with the successful execution of these processes.  Whilst the document needs to contain similar information to other forms of business planning, more emphasis is placed on the “Operations” section.  Who will be conducting key activities and how will it be managed.  What processes are in place to ensure that any issues or errors are corrected quickly.

Business Plan Reason#4: Recruiting partners, staff and directors
A recruitment business plan needs to be a strong sales document.  Particularly in the early stages of venture creation, little is known about the business.  The purpose of the plan is to clearly describe what the business will do and why it is likely to be successful in delivering value to stakeholders.

Business Planning Key 1 – How clear is your business strategy?

If you are unclear about how you intend to enter or grow your market, then consulting assistance can help with your planning process.  Sometimes business owners are too close to the issues and a series of carefully worded questions can help the owner to “see the wood for the trees”.  This consultative approach usually involves asking a series of questions about the business which potentially highlight inconsistencies in logic.  Addressing these logical inconsistencies makes for a clear and concise business plan.

Business Planning Key 2 –  Do you know enough about the criteria your target audience will apply when assisting your business plan?

When writing any communication, often the best place to start is with an understanding of your target audience and what they might like to see in your document.  For those that have not raised capital or sought a loan previously, obtaining an in depth understanding of the target audience “hot buttons” can take too long.  This is where a consultant can assist.  They will pre-empt many of the questions the target audience might raise.  By answering these questions throughout the construction of the business plan, the target audience will more warmly receive the communication.

Business Planning Key 3 – Obtaining the best of business plan consulting without the cost

Business Planning HQ.com has created a unique approach called “Question Led” business planning that offers you the benefits of using an expensive consultant for not much more than the cost of purchasing a template.  To create this proven approach we have built hundreds of different business plans for clients in a wide range of industries.  The audience for the business plan generally has a fixed series of questions about the business.  Through experience we have managed to boil down hundreds of business plans and identify their key success criteria.  Our clients are able to leverage this experience and simply build their plan by answering a simple series of questions in their own time.