• business plan 
  • is a document that defines the business, its purpose, objectives, products /services offered, market, ways / means of financing, operational details, financial objectives and expected outcome of what the individual or organisation proposes to do.
  • lays down a road map to realise what one proposes to do in the future: immediate, short and long term objectives
  • has elements that are functional and cross functional, holistic and isolated, addresses near, short and long term performance and drivers, is futuristic, has element of uncertainty (risk)
  • is a team work where inputs from diverse angles and perspectives are captured, analysed and judiciously integrated
  • is a  vital first step in any business to ask relevant questions upfront so that one is prepared to address these as they surface during the journey
  • lays down milestones to achieve with timelines and  help track the business’s performance
  • a practice in due diligence
  • helps forewarn entrepreneurs / businesses from wasting time and money over unproductive initiatives
  • How Does a Business Plan Work?
  • A business plan helps determine if your business idea is viable and your chances of success
  • In many cases, people starting new businesses don’t have the money they need to start the business they want to start. If start-up financing is required, an investor-ready business plan helps to show potential investors how the proposed business will be profitable and rewarding for the investor
  • A business plan it’s a useful referral tool for day to day running of the business. To be effective, a business plan should be reviewed regularly and updated based on unfolding situation
  • Business plans can be of varying levels of detail, timeframe, content, precision and purpose. A business plan for own consumption would be quite different in content, detail, timeframe, analysis from a one made for submission to banks, private financiers, venture capitalists or even public issue of equity. They can be short or long, and vary in level of detail, supporting material, accuracy and predictability.  Any venture to make a business plan should be clear on its purpose and audience;  conscious of shortcomings in data, predictability, accuracy ….
  • Market Analysis
  • Knowing the market for one’s goods or services is a key element of any business plan. Market analysis will reveal if there is sufficient demand for your product or service in your target market or help redefine target market or even product / service offerings to ensure a viable market for the venture
  • Market analysis identifies, describes and analyses the products and services you offer. It includes your target market, your expected market share and competitors. Helps make decisions on pricing products and services and location of your business. A SWOT analysis (strengths, weaknesses, opportunities and threats) helps identify opportunities, and strategies to reduce barriers to realising goals
  • Marketing plan outlines strategies to attract new clients and keep existing ones, highlighting how your product or service differs from what’s already available, defining your USP (Unique Selling Proposition) .
  • Marketing plan should take into consideration your target market and marketing channels (digital, print, direct, distribution, agents etc.) best placed to reach them.
  • Competitive Analysis: Competition analysis will help gain visibility into competition, existing players, market size, strengths and weaknesses of the competition and help direct strategy for garnering a share of the market in the marketing plan. If the existing market is dominated by established competitors, you will have to come up with a marketing plan to lure customers from the competition (lower prices, better service, etc.) or even revisit the business idea itself or even redefine your market
  • Management Plan

The management plan outlines the business structure (financing, ownership, capital structure), organisation structure and management, make or buy decision and staffing requirements. If the business requires specific employee and management expertise, you will need a strategy for finding and hiring qualified staff and retaining them. The business plan should also examine the regulatory environment for the business (controlled, free market, restrictions …..), Management and personnel plan covers staff functions, job descriptions, human resource policies, workforce planning and training essential for success of the business

  • Operating Plan
  • Operating plan lays down the facilities (land, buildings, infrastructure), equipment, inventory, procurement, supply chain and governing regulations. Physical location, land, movement and accessibility are critical for many businesses. Relevance of these factors in your specific case needs incisive examination. If the proposed business requires parts or raw materials to produce goods to be sold to customers, supply chains need to be identified.
  • Operating plan Summarises how your business works, information on how your products are made or services are provided, premises/lease terms, equipment, materials, labour, technology,  environmental concerns
  • Financial Plan

Financial plan is a key element of any business. If financing is required, financial plan will determine how likely you are to obtain start-up funding in the form of equity or debt financing from banks, angel investors, venture capitalists or even private equity partners or lenders. You can have a great idea for a business, with excellent marketing, management, and operational plans; but if the financial plan shows that the business will not be profitable enough, then the business model is not viable and there’s no point in starting that venture.

Finance plan covers

  • Cost of establishing the business, break-even point, projected cash-flow, funding arrangements, and repayment plans
  • Finance plan is essential to securing funding and attracting partners, and expected to demonstrate  short-term return on their investment

Managing your cash-flow, understanding your costs, understanding taxation and permit requirements, and understanding financial forecasts can make the difference between staying in business and shutting your doors

  • Business Plan vs. Investment Proposal

The terms business plan and investment proposal are sometimes used interchangeably, but have subtle differences including audience for both 

Business Plan vs. Investment Proposal
Business PlanInvestment Proposal
Internal documentExternal document
Guide to decision-making within the businessTo convince those outside the company to invest in the business

An investment proposal is a business plan with a different audience, content, presentation, and perspective. While the business plan is largely an internal document, intended to guide the decisions of the entrepreneur, executives, managers, and employees; investment proposal, on the other hand, is designed to be presented to external agencies for funding / regulatory agencies for compliance

  • Business plan (detailed road map) explains company’s goals and how it will be achieved
  • Exact details of a business plan depends on intended audience and nature of the business
  • Good idea to revisit your business plan for its accuracy, realism and details as possible
  • First step is to write a description of your business with clarity of vision and focus
  • Vision

Visioning helps to:

  • brings clarity of purpose
  • sets the direction for your business
  • communicate your long-term business goals
  • reflect the values of your business
  • inspire  your staff team and key partners
  • Legal structure

This defines the legal structure of the business. Corporations are legal entities that keep the business and personal liability separate. A limited liability company (LLC) separates business interests from personal. Other forms are sole proprietorship, partnership, corporations. The legal structure will drive legal and tax implications. An accountant can guide on the appropriate legal structure to meet your situation and expectations. Legal structure definesbusiness structurebusiness name registration,  licences/permits, potential risks, opportunities, and threats and their mitigation plan as well as driving certain elements of risks and their Management. Includes information on local ordinances that pertain to your business, as well as licenses and permits that are required to be obtained or renewed

  • Business Location

Location is a key driver of success of a venture and is guided by nature of the business, space and infrastructure (soft and hard) requirements, access to inputs and market, visibility, proximity, regulatory  and address value requirements, cost of land and if it is proposed to be owned or leased or rented. 

  • Management and Employees

This is a definition of the structure of your organisation for clarity of roles and     responsibilities, accountability and harmonious productive functioning. This will also define the employee cost, performance monitoring, rewards system   

  • Specific Plan for Your Products or Services

This will define 

  • each product or service that is proposed to be offered through  the business
  • pricing structure and strategy for product / services; make / buy and value add
  • If you are providing services, describe these services in detail:
  • A general description of each type of service and how it will be performed
  • Pricing for the various services you will be providing
  • Marketing Plan 

Defines target market: a description of the “ideal” customer in terms of profile, buying behaviour; a discussion on the “target population” to whom you will be selling, in terms of numbers and demographics (characteristics), like age, sex, education level, income level, and other important information; a description of the buying behaviour of your target market

  • Competition for Your Products or Services
  • numbers of competitors
  • characteristics of your top competitors
  • unique points of difference between you and your competitors
  • ways in which you will differentiate your products/services from that of your competitors; in terms of delivery, customer service, product differentiation, or other characteristics
  • Marketing Strategy: include
  • ways in which you will inform your target market about your products and services
  • types of paid advertising you will use to promote your products and services
  • ways in which you will use publicity to promote your products and services
  • personal selling methods to promote your products and services
  • methods (brochures, flyers, website) to promote your new products and services
  • budget for all these activities, for the first three years of your business
  • Necessary Financial Statements for Business Start-up

Start-up Costs Worksheet: should include all equipment, supplies and other items you will need to purchase for the start-up; fees and licenses, one time as well as recurring, deposits, initial expenditures for advisers; and costs for creating your business structure as well as the start-up balance sheet showing assets, liabilities and owner’s equity on date of start-up; and Month-by-Month Budget for 1st Year – a detailed statement of cash-flow showing month-by-month sales, collections, business expenses

Pro Forma Income Projections: A pro-forma (projected) income statement (P&L) for the first three years of operations, showing income and expenses, pre-tax income, tax liability and after-tax income for each year; Break-Even Analysis showing the point at which you expect to break-even on product sales

Sources and Uses of Funds: A detailed statement of financial needs for the business, your personal investment in the business, and financing expected from lenders or investors

Personal Financial Information: If you take your business plan to a lender or investor, you will be asked to provide personal financial information. Preparing this information for inclusion in your business plan will help you gain the trust of these individuals. Documents for last three years needed are:

  • tax returns
  • recent credit report, showing credit score
  • personal financial statement, a resume or curriculum vitae
  • Management Plan: Management plan (who’s running the company), an operating plan (how is it being run) and an executive summary

Owners and Directors: Backgrounds and qualifications of individuals who own the company and make top-level decisions; Board of Directors if you are incorporating

Managers and Employees: Key management positions required; if these key positions are filled, qualifications of people who fill them, an organization chart, showing top positions and types of employees who will be working in your organization

Business Advisors: Information about key advisers to the business, including consultants, CPA or financial advisor, attorney, insurance agent, and banker. If you have not selected some of these individuals, discuss the qualifications you will be looking for to fill these positions.

  • Executive Summary 
  • an overview of the whole concept for the business; to grab reader’s attention (venture capitalists, investors, financiers)
  • information about the business owners, such as their expertise, experience and education, which will underpin the successful operation of the business
  • Company information:company name, when incorporated, location and legal form of organization
  • Products and servicesof the business,  target market, your competitive position (USP)
  • Purpose of the business, mission/vision, and other material of  interest to  reader
  • A discussion on financing needs, including own investment in the business, start-up/purchase funding, and operating capital during start-up
  • A discussion on expectations of when the business will break even or make a profit