You need to carry out considerable research to take a business from concept to laying it out on paper as a business plan, demonstrating how it is likely to work out in the real world. The final blueprint is equally important internally as a document that sets out the strategy and the steps to achieve objectives and as an external document to assist in obtaining finance for your business.
Financial projections are a vitally important part of the plan and a large amount of detail will be needed, including sales, gross margins, overheads, break-even data and sensitivity analysis.
Overview of the Business Plan
Potential readers need to get an insight into your current operation and future plans. The plan needs to be structured and well presented.
The overview or executive summary must be capable of instantly grabbing the reader’s attention. If it is weak or unclear no one will read further. Remember first impressions are always the lasting ones.
The plan does not need to be overly complex, just enough to clearly give the relevant information that an investor or lender may need. Do not bore the reader by being too detailed. You can always provide them with additional information if required.
Some top line figures should be included.
The Introduction is important as this will determine the extent of interest the reader has in the rest of the plan. First impressions are always the most lasting! Many plans are thrown out at this early point. It is also important to sum up well at the end.
The following headings comprise the structure of any business plan:
Introduction: Explain your idea and provide a good overview what the business does, is it established or new, the history, investment required and the long term strategy.
Background: Shareholders, directors and the key promoters; professional advisors.
Market Analysis: Your target market together with value of total market, expected target share and relevant information on the competitors. Provide details of your competitive advantages. What is your USP?
Markets, Marketing and Sales Strategy: Sources of income, pricing structure, the marketing plan, advertising and promotion and some details on sales pipeline.
R&D: Details of any brands, patents or copyright, if applicable. Any ongoing R&D and future contributions you expect from this research.
Staffing and Operations: A management chart and staff plan, salary policy. The production process, capacity, quality control, plant and machinery needs, the premises required and future needs.
Financial Projections: Key assumptions. Profit and loss accounts with Balance Sheets, cashflow projections and sensitivity analysis. Detailed monthly figures should be provided for at least the first 12 months. Scenarios showing worst case and best case can be provided.