Elements of a Business Plan
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Section I: Executive Summary
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Section II: Business Description
A. General description of business
B. Industry background
C. Goals and potential of the business and milestones (if any)
D. Uniqueness of product or service
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Section III: Marketing
A. Research and analysis
1.
Target market (customers) identified
2.
Market size and trends
3.
Competition
4.
Estimated market share
12–1
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Elements of a Business Plan
(cont’d)
Section III: Marketing (cont’d)
B. Marketing plan
1.
2.
Pricing
3.
•
Market strategy—sales and distribution
Advertising and promotions
Section IV: Operations
A. Identify location advantages
B. Specific operational procedures
C. Personnel needs and uses
D. Proximity to suppliers
12–2
•
Elements of a Business Plan
Section V: Management
(cont’d)
A. Management team—key personnel
B. Legal structure—stock and employment agreements, and
ownership
C. Board of directors, advisors, and consultants
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Section VI: Financial
A. Financial forecast (pro forma financial statements)
1.
Profit and loss
2.
Cash flow
3.
Break-even analysis
4.
Cost controls
5.
Budgeting plans
12–3
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Elements of a Business Plan
Section VII: Critical Risks
(cont’d)
A. Potential problems
B. Obstacles and risks
C. Alternative courses of action
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Section VIII: Harvest Strategy
A. Liquidity event (IPO or sale)
B. Continuity of business strategy
C. Identify successor
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Section IX: Milestone Schedule
A. Timing and objectives
B. Deadlines and milestones
C. Relationship of events
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12–4
I.
Hints for Developing the Business
Plan
Executive Summary
No more than three pages. This is the most crucial part of your plan because you must
capture the reader’s interest.
•
Diagrammhow, why, where, and so on must be summarized.
What, durch Klicken auf Symbol hinzufügen
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Complete this part after you have a finished business plan.
Business Description Segment
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The name of your business.
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A background of the industry with history of your company (if any) should be covered here.
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The potential of the new venture should be described clearly.
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Any uniqueness or distinctive features of this venture should be described clearly.
Marketing Segment
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Convince investors that sales projections and competition can be met.
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Use and disclose market studies.
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Identify target market, market position, and market share.
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Evaluate all competition and specifically cover why and how you will be better than your
competitors.
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Identify all market sources and assistance used for this segment.
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Demonstrate pricing strategy. Your price must penetrate and maintain a market share to
produce profits; thus, the lowest price is not necessarily the best price.
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Identify your advertising plans with cost estimates to validate proposed strategy.
•
II.
III.
12–5
Hints for Developing the Business Plan
IV.
V.
VI.
Operations Segment
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Describe the advantages of your location (zoning, tax laws, wage rates). List the production
needs in terms of facilities (plant, storage, office space) and equipment (machinery, furnishings,
supplies).
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Describe the specific operations of the venture.
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Indicate proximity to your suppliers.
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Mention the need and use of personnel in the operation.
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Provide estimates of operation costs—but be careful: Entrepreneurs underestimate their costs.
Management Segment
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Supply résumés of all key people in the management of your venture.
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Carefully describe the legal structure of your venture (sole proprietorship, partnership, or
corporation).
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Cover the added assistance (if any) of advisors, consultants, and directors.
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Give information on how and how much everyone is to be compensated.
Financial Segment
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Give actual estimated statements.
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Describe the needed sources for your funds and the uses you intend for the money.
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Develop and present a budget.
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Create stages of financing for purposes of allowing evaluation by investors at various points.
12–6
VII.
Hints for Developing the
Business Plan
Critical-Risks Segment
Discuss potential risks before investors point them out—for example:
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Price cutting by competitors
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Any potentially unfavorable industry-wide trends
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Design or manufacturing costs in excess of estimates
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Sales projections not achieved
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Product development schedule not met
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Difficulties or long lead times encountered in the procurement of parts or raw materials
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Greater than expected innovation and development costs to stay competitive
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Provide some alternative courses of action.
Harvest Strategy Segment
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Outline a plan for a liquidity event—IPO or sale.
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Describe the plan for transition of leadership.
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Mention the preparations (insurance, trusts, and so on) needed for continuity of the business.
Milestone Schedule Segment
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Develop a timetable or chart to demonstrate when each phase of the venture is to be
completed. This shows the relationship of events and provides a deadline for accomplishment.
Appendix or Bibliography
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VIII.
IX.
X.
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