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Business Plans

A business plan is normally written in order to raise capital (i.e. money) to start up a new business, or sometimes, to refinance an existing business. A business plan includes specific criteria aimed at showing that the business is viable, that you (and possibly your team) are knowledgeable about the realities of your business, and that you are well prepared for the day-to-day operation of your business once it is funded. Make sure you check with your instructor regarding the specific components required for your business plan.

A business plan is the first step when starting a new business or growing a current business. It is generally written with a five-year outlook.  It addresses the questions of where your business will be at various stages of development and demonstrates that you have planned for success. In all professional environments, business plans are used to determine the feasibility of a project and its projected outcome.

What should my business plan include?

  1. Executive summary
  2. Business goals
  3. Marketing plan
  4. Operations plan
  5. Financial plan
  6. Action plan

Executive summary

The Executive Summary outlines the main elements of your business plan. It provides the readers with enough information to inform them of the most important points and conclusions of the report. After reading the Executive Summary, the reader can decide whether or not to read the whole business plan. The Executive Summary may be distributed separately from the report to related stakeholders, so it is important that it is a complete representation of the full document (and does not refer readers to sections of the full document). It should be a stand-alone document. Some guidelines for an Executive Summary are as follows:

  • When included in longer reports (4 pages or more), the Executive Summary is not longer than 10% of the report;
  • It follows the order of the report with concise summaries for each major section;
  • It states the purpose and outcome for each major section in direct sentences without referring the reader to any sections of the plan; and
  • It provides enough detail that a clear overview of the project is understood.

Business goals

The business goals indicate your vision for the business in a few years’ time. It addresses several questions.

  • What are the products and services?
  • Who is the target market?
  • What is my competitive advantage?
  • What am I going to achieve by starting this business?

Marketing plan

The marketing plan clearly outlines exactly how you will get the products or services of your business to your clients or customers. There are several questions you must ask yourself.

  • What am I offering to my customers?
  • Will it meet my customer’s needs?
  • Are there competitors for my product?
  • What are the market size, demographics, geographic location, and trends?
  • Who are my customers? What, when, how, why, and how often do they buy?
  • Who are my competitors? How do they compete?

Operations plan

The operations plan details how your business will operate on a day-to-day basis. The following questions should be answered in this section:

  • Human Resources:
    • What staff will I need?
    • Will my staff be permanent or contracted? Part-time or full-time?
    • What policies and procedures are in place?
    • What expertise do I need?
    • What systems do I need to implement in order to produce my product or service?
    • Who are my suppliers, and how much do they cost?
    • Will I lease or own my facilities? Where will my facilities be located?
    • How large do my facilities need to be?
    • What distribution, delivery, and inventory considerations are needed?
    • What technology and equipment do I need?

Tip: 

Depending on the nature of your business, you may need to answer other questions. Try to anticipate what an investor (or the bank) will ask you when you approach them for money.

Financial plan

How will you finance your business?  This is a central question any investor will ask, whether you are requesting funding, staffing supports, or other resources. Ask yourself some of the following questions, and try to anticipate the questions an investor (who could also be a supervisor) may ask of you.
  • How much money do I need to start my business?
  • What are my sources of revenue?
  • What costs will I have?
  • How will I get the resources I need?
  • What is my projected cash flow?
  • Are additional financial or human resources required?
  • Where and how will I access the resources needed?

Tip: 

Be honest and realistic. You will need detailed information to convince any investor that you know what you are doing.

Action plan

Now you must include the specific tasks required to put your business plan into action! Be clear about the hierarchy of the tasks (the priorities), define time frames, identify key personnel, and assign roles and responsibilities for meeting the deadlines.

Tip: 

Include your detailed (but realistic) timetable in the action plan.

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