Business plan template

Preface

The preface to the Business Plan should be a confidentiality statement requiring the agreement of the reader to agree to:

·           Keep all the information contained in the Business Plan confidential and protect it from any kind of disclosure, including accidental disclosure;

·           Not to use the information for any unauthorized purpose, including starting and business in competition.

·           Not to use the intellectual property of the Business for any purpose.

1. Executive Summary

The Executive Summary is used to give a high-level summation of the Business to a potential investor or lender. As the title suggests, it is a summary of the rest of the plan to give the potential investor or lender a global view of the current state of the Business and the vision of the Business in the future if plans come to fruition.

The Executive Summary is the most important part of the Business Plan. If it is not engaging, it may be ignored no matter how good the rest of the Business Plan is. The presentation of the Executive Summary should be a strong reflection of brand image. This should be done in a subtle way so as to not overpower the reader. Use of your logo and one or two images that are strongly reflective of your business should be considered.

The majority of people reading your Business Plan are probably extremely busy and will probably be looking at multiple Business Plans during their workday. They will be looking to form a quick opinion as to whether it is worth their while to read the whole of your Business Plan. Keeping this situation in mind, you should use the Executive Summary to give the reader a clear and concise:

·           snapshot of the current status of the Business;

·           description of the reason you are presenting the Business Plan;

·           rundown of your business idea(s) and your plans for the future; and

·           indication of the potential outcomes if your idea(s) and future plans come to fruition.

You can consider using some of the following as headings to provide brief information to the reader:

·            The concept of your business;

·           Your goals and objectives for the Business;

·           Your points of differentiation. What are you bringing to the market that is not already available?

·           What is the unfilled need that you are planning to address?

·           What is your target audience? 

The Executive Summary should briefly include the following information: 

·           How much investment are you looking for?

·           What do you intend to use the investment for?

·           How will the investment contribute to the future growth of the business?

·           What do you expect the end result of the investment for the business?

·           What will the investor receive if they proceed to make the investment?

In summary, the Executive Summary is a snapshot of the entire Business Plan and should be written in an engaging manner to draw in the reader to read the whole of the document. The Executive Summary should not be more than 2 pages long.

2. Business Owners/Team

In this section, you should be looking to give information on the owners of the business and/or the team that the investor will be working with. The Investor will probably be looking for the following information: 

·           Qualifications;

·           Special skills;

·           Working experience; and

·           Other relevant information.

The section should be finished off with a brief discussion on the reasons why the Business Owners/Team and the Investor would make a good fit. 

3. Mission 

You should use this section to tell the investor the reason for the existence of the Business and what motivates the Business Owners/Team to operate the Business. It should also state the values on which the Business operates. 

4. The Business 

This section should be used to present more detailed information on the Business. Such information can include: 

·           A brief history and background and information on the Business;

·           The premise on which the Business was started;

·           Whether the original goals have been achieved and reasons why some have not;

·           Has the business had to pivot from the original goals;

·           The current status of the Business;

·           Plans for the future;

·           Detailed information of the use of the investment funds.

You should consider using the following sub-headings in this section:

·           Business structure – Explain the legal structure of the business – is it a sole proprietorship, general partnership, limited partnership, or an incorporated company?

·           Current Shareholding Structure and Ownership – Set out information on how the ownership of the Business is structured. For a corporation, this should include the structure of the share capital, e.g., ordinary shares, preference shares, convertible notes etc. and also details on any options granted and any convertible securities issued.

·           Nature of the business - What do you sell? Include a short overview of all products or services you offer.

·           Industry – Give a broad summary of the industry that your Business is in. State the current problems faced by industry participants and obstacles to growth. Briefly discuss potential solutions to industry problems and opportunities.

·           Customers – If you are an ongoing business, give detail of your customer base. If you are a startup, give an indication of your target market.

·           Suppliers – Briefly discuss your suppliers and the statue of the relationship with them. Also discuss the security of the supply chain.

5. Products and Services

The Products and Services are the core basis of the Business, the need to attract Investors and the basis of which Investors will decide to make an investment in the Business. It will be necessary for you to explain in depth all the salient points of your Products and Services. This section should also cover Products and Services in development, particularly if part of the investment funds will be used for development purposes.

The pricing policy and pricing model of the Business should also be discussed in this section. Any research of price sensitivity analysis should also be mentioned here.

6. Marketing Strategy and Marketing Plan

While having great Products and Services are the core of any business, Investors want to know: a) is there a market for the Products and Services? Will you be able to monetize them? And b) what is your marketing strategy and what is your marketing plan? This part of the Business Plan will be easier for an ongoing business to complete as the Business will already have a history to rely on.

You will need to present clearly what market research you have undertaken to verify that a market exists for the Products and Services. and what the basis of research was. You will also need to state the methodologies used and the sampling size.

As part of the discussion, inclusion of the following points should be considered:

·           What is your product/service niche and how do you think that your Products and Services will be able fulfill the needs of this niche?

·           What is your target audience? Who do you see as your customers? Your market research should have identified this for you.

·           What is the competitive edge of your Products and Services?

·           What is the message of your marketing strategy and marketing plan? Is the marketing plan properly directed at and aligned with the target audience?

·           What are your competitors doing? How will their activities impact your marketing plan? Have you allowed for this factor to assess your potential marketing plan impact?

·           Discuss your intended marketing channels and justify why you have selected them.

You should also state what your planned marketing budget is for the next 1-3 years and how you intend to utilize it.

7. Operational Plan

In this part of the Business Plan, you should describe in detail how the Business functions on a day-to-day basis. Here you will need to touch on all the primary business areas such as human resources, suppliers, logistics, manufacturing operations (if relevant), inventory and so on.

One of the areas often overlooked in Business Plans is a discussion of the supply chain of the Business. This is particularly important where the Business has manufacturing operations and/or operates on a just in time inventory system. Investors will want to know how secure the supply chain is and what stress testing has been done.

8. Management Structure

You will need to have a discussion on the organizational structure of the business and how the various components function together and co-exist. The investors will also want to know how the decision-making process works.

A presentation of the organization chart should be considered. Discussion of all the critical contributors to the functioning of the Business should be considered:

·           Board of Directors

·           Management Team

·           Advisors and consultants

·           External professionals such as auditor and lawyers

9. SWOT Analysis

You should consider including a SWOT analysis in your Business Plan. The SWOT Analysis set out graphical format the Strengths, Weaknesses, Opportunities and Threats relevant to a Business. It summarizes key factors about the Business for the Investor in an easily understood format.

10. Competitive Analysis

You should consider including a section giving a competitive analysis of the industry in which the Business participates. This should include a look at how competitors operate and what Products and Services they offer. You should look at their pricing models and target markets. You should also look at their marketing strategies and marketing plans as much as publicly available information makes possible.

In this section an important discussion would be on what is the competitive edge of the Business. What are the factors that make its Products and Services unique that customers would prefer your Products and Service over those offered by competitors? 

11. Financial Plan

The finances of the Business will play a critical role in the decision making of Investors, particularly the projected future financials. It is critical that you develop a comprehensive and clear Financial Plan which should include the following components: 

·              Profit & Loss Projections – the minimum period required by Investors will likely be 1 year. However, a 3 - 5 year period is the norm;

·              Projected Balance Sheet for each period for which Profit & Loss Statements are presented;

·              Cash Flow projections corresponding to the Profit & Loss Statements presented;

·              Break Even analysis; and

·              Sensitivity analysis.

Where possible, graphical representations of the financials.

12. Conclusion

The conclusion should just be a short summary of all the reasons why the Business is an attractive investment proposition. Emphasis should be placed on any factors that give the Business a competitive edge and the ability to disrupt markets.