Business PlanBusiness planning is about results.

Make the contents of your plan match your purpose. Don't accept a standard outline just because it's there.

In the business market, at least, there is a certain standardisation about business plans.  You can find hundreds of books on the subject, about as many websites, serious software products, and courses in hundreds of business schools, night schools, and community colleges.  Although there are many variations on the theme, a lot of it is standard.

 What is a Business Plan?

A business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities.  Business existed long before computers, spreadsheets, and detailed projections.  So did business plans.

Unfortunately, people think of business plans first for starting a new business or applying for business loans.  They are also vital for running a business, whether or not the business needs new loans or new investments.  Businesses need plans to optimise growth and development according to plans and priorities.

What's a Start-up Plan?

A very simple start-up plan is a bare-bones plan that includes a summary, mission statement, keys to success, market analysis, and break-even analysis.  This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing, but it is not enough to run a business with. 

Is There a Standard Business Plan?

A normal business plan, one that follows the advice of business experts, includes a standard set of elements.  Plan formats and outlines vary, of course, but generally, a plan will include standard components such as descriptions of company, product or service, market, forecasts, management team, and financial analysis.

Your plan depends on your specific situation.  For example, if you're developing a plan for internal use only, not for sending out to banks or investors, you may not need to include all the background details that you already know.  Description of the management team is very important for investors, while financial history is most important for banks.  Make your plan match its business purpose.

What's Most Important in a Plan?

What's most important in a plan? It depends on the case, but usually it's the cash flow analysis and specific implementation details.

Cash flow because it is both vital to a company and hard to follow.  Cash is usually misunderstood as profits, and they are different.  Profits don't guarantee cash in the bank. Lots of profitable companies go under because of cash.  It just isn't intuitive.

Implementation details because that's what makes things happen.  Your brilliant strategies and beautifully formatted planning documents are just theory unless you assign responsibilities, with dates and budgets, and lots of following up and tracking results.  Business plans are really about getting results and improving your company.

Is there a Standard Outline?

If you have the main components, the order doesn't matter that much, but here's the order I suggest.

  1. 1.    Executive Summary:

Write this last. It's just a page or two of highlights.

  1. 2.    Company Description:

Legal establishment, history, start-up plans, etc.

  1. 3.    Product or Service:

Describe what you're selling.  Focus on customer benefits.

  1. 4.    Market Analysis:

You need to know your market, competitors, industry, customer needs, where they are, how to reach them, etc.

  1. 5.    Strategy and Implementation:

Be specific.  Include management responsibilities with dates and budget.

  1. 6.    Management Team:

backgrounds of key members of the team, personnel strategy and details.

  1. 7.    Financial Plan:

including profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.

I don't recommend developing the plan in the same order you present it as a finished document.  For example, although the Executive Summary obviously comes as the first section of a business plan, I recommend writing it after everything else is done.  It will appear first, but you write it last.

How Many Pages

If it is for bank or funding purposes, then make the whole document no more than about 12-15 A4 pages long.  Some people say to keep it to only to a few pages, but others believe that you can’t do justice to your business in only a few pages.  Any longer than about 12 pages and you begin to bore your reader.

If it is for yourself, we have seen (& helped prepare) plans in excess of 150 pages long.  It includes detailed research, interpretations, plans thinking, figures, etc.

Can I change the format?

Some people can’t write a plan in a strict report format style.  If that is the case, then you can write it as a story.  But beware, if anything it is more difficult.  You still have to do the research, interpret it & show the results in an understandable & persuasive format.

You have to be able to show in story format, a business approach.  It is not easy and requires a definite skill.