Business

Business

There is enormous variability in the content and organization of business plans. My preference is 15-20 page documents that are straightforward, easy to understand and not redundant. Say it once and that should be enough. The only redundancy should be creation of a 1 page, single spaced executive summary of the plan.

A business plan emphasizes what will be done, when, where, how and why it will be done. The plan describes the business model, i.e. how a business’s products and services create value for customers, the cost structure and the sources of revenue and profit margins.

Business plans are used internally for management and planning and are also used to persuade bankers or venture capitalists to invest money in a venture.

A business plan can be seen as a collection of sub-plans including a marketing plan, financial plan, production plan, and human resource plan.

There are many outlines for business plan documents. The following modified from Wikipedia is typical for small businesses:

Marketing Plan

  • the macroenvironment
  • the competitive/industry environment
  • the customer priorities
  • product strategy
  • pricing strategy
  • promotion strategy
  • distribution strategy

Production and Manufacturing Plan

  • describe major processes
  • production facility requirements – size, layout, capacity, location
  • inventory requirements – raw materials inventory, finished goods inventory, warehouse space requirements
  • equipment requirements
  • supply chain requirements
  • fixed cost allocation

Finance Plan

  • source of funds
  • existing loans and liabilities>/li>
  • projected sales and costs
  • break even analysis
  • expected return
  • monthly pro-forma cash flow statement

Human Resources Plan

  • assign responsibilities
  • training required
  • skills required
  • union issues
  • compensation
  • skills availability
  • new hiring