CONCEPT-Tools

Business Plan

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There exists a lot of literature about “How to write a business plan”. Here the possible elements of a typical business plan are listed:

 

Section 1: The Executive Summary

The purpose of the executive summary is to capture the interest of the investors/stakeholder  so they will want to find out more about your venture.

 

(Section 2: Business Description)

This section of the Business Plan should provide the reader with a more detailed overview of the company and the nature of the product/service offering. It is not necessary for a internal concept

 

Section 3 - Industry & Market Analysis

The main objective of this section is to convince the reader that an explosive market opportunity exists, and that you understand it well enough to capture a share large enough to support the new venture. The entrepreneur can do this by addressing the following areas:

 

A. Industry Analysis

1. Description of the industry

2. Industry current size & growth potential

3. Factors that affect the industry including seasonal, technological and regulatory challenges

4. Barriers to entry

B. Market Analysis

1. Market Size and Trends

2. Targeted Market Research including: Demographics, Psychographics, Purchasing Patterns

3. Market Research

4. Factors that Affect the Market including Seasonal, Technological and Regulatory Challenges

5. Barriers to Entry

 

Section 4 - The Competitive & Strategic Position and Risk Assessment

This section of the business plan assesses who the current players are in the industry and how you will compete with them. It gives you the opportunity to plan how you will enter the market and differentiate yourself from the current players. There are also risks or barriers to entering a market and this portion of the plan should explain how those risk and barriers are managed in your business.

 

A. Competitive Position

1. Competitive Analysis

2. Market Share and Distribution

3. Barriers to Entry

4. Potential / Future Competitive Challenges

B. Strategic Position & Risk Assessment

1. Company's Strengths

2. Market / Industry Opportunities

3. Definition of Strategic Position

4. Risk Assessments

 

Section 5 - Sales & Marketing Plan

The sales and marketing plan details what marketing activities the business will put in place to generate sales and lays out the cost associated with each activity. Remember, the purpose of marketing for a new business is to create awareness and drive sales. The sales and marketing plan should concisely explain how your business will achieve those goals.

 

A. Company Marketing Strategy

B. Marketing Vehicles

C. Strategic Partnerships

D. Marketing Tactics and How They Create Sales

E. Sales Force & Structure

F. Sales Assumptions

 

Section 6 - Operations & Technology

This section should provide an overview of the strategy for the day-to-day implementation of the business model. The objective here is to demonstrate that you understand how the daily operations of the business will work. It's important to discuss technology needed to help manage processes. Also, this section will help you focus on relevant costs associated with implementing the plan. You must remember to incorporate the assumptions made in this section into the assumptions in the financial section of the Business Plan. Depending on the type of business, you should address the key areas listed below. (If the business is not manufacturing or producing a product, some of these items may not apply, but even a service business should have a detailed plan of operations.)

 

A. Production Plan

B. Personnel/Variable Labor Needs

C. Customer Support

D. Management Information Systems

E. Inventory Management

F. Supply, Distribution and Order Fulfillment

G. Research and Development

H. Quality Control

I. Safety, Health and Environmental Concerns

J. Shrinkage

 

Section 7 - The Management Team

The strength of the management team plays a key role in investors' and lenders' decision to fund a venture. The objective of this section is to convince the reader that you have a management team that can effectively manage the product/service into the market place and make the venture a success. The key areas to cover are:

 

A. Background and Primary Responsibilities of the Management Team

B. Organizational Structure

C. Board of Directors/Advisors

D. Business Ownership

 

Section 8 - Growth & Exit Strategy

The growth and exit strategy outlines methods that will take the business through each stage of development. When a company gets to a certain point, the owners may look at removing themselves from the operation. The exit strategy details two things: first, the owner's(s') participation or lack of participation in the business at some future point in time; and second, how any and all investors who are involved in the business are repaid i.e. do you sell the company and pay them off? How

will it happen?

 

A. Long-term Company Goals

B. Growth Plan

C. Milestones

D. Exit Plan

 

Section 9 - The Financial Projections

The purpose of the financial section of the plan is to convince the reader that the venture makes sense from a financial standpoint. You must be able to translate the idea into a plausible set of financial projections which address procurement, allocation, return on investment, and cash management. If your business has not had any sales, you should include 3 years of projected financials (Performance statements).

A. Balance Sheet 3-Year Summary Monthly (Years 1-2), Quarterly (Year 3)

B. Income Statement 3-Year Summary Monthly (Years 1-2), Quarterly (Year 3)

C. Statement of Cash Flows Monthly (Years 1-2), Quarterly (Year 3)

D. Break-Even Analysis

E. Financial Assumptions

F. Proposed Sources & Use of funds

G. Notes To Financials

 

Source: http://amoryventure.org/business_plan_elements.htm