BUSINESS PLAN

A business plan is a written document that describes in detail how a business is going to achieve its goals. Although they're
especially useful for new companies, every company should have a business plan. Ideally, a company would revisit the plan
periodically to see if goals have been met or have changed and evolved. Sometimes, a new business plan is prepared for an
established business that is moving in a new direction.
PURPOSE OF A BUSINESS PLAN
1. Maintaining Business Focus
Your business plan reminds you of why you started your business in the first place, what your original goals were and how
business changes will affect your original vision.
2. Securing Outside Financing
Investors will want to see how you plan on running your business, your projected expenses and revenues and whether or not
the business is feasible. All of this can be answered by a well-written and thorough business plan.
3. Fueling Ambitions
When you break down your business into a business plan, it can motivate you because it presents the business in an
organized fashion.
4. Mapping Growth
Following a business plan can help you to map out the growth of your company and give you confidence when you need it.
5. Enlightening Executive Talent
A business plan will help executive talent see your business vision and determine whether or not your company is a worthwhile
investment of time and resources.
6. Measurement
Laying out your goals and ideas in advance helps you to check your performance at different points in time. Where are you
exceeding your expectations? In which areas might you be falling short?

TYPES OF BUSINESS PLAN

a) Summary Plan / Mini plan
An executive summary business plan is a much shorter document, usually 2 to 3 pages long that highlights the most important
information about your business and its direction. It is ideal when your request is simple or minimal, when you are strapped
for time, or when you want to give your reader a preview of your business plan.
b) Complete / Investment Plan
A complete business plan is necessary when you are seeking a significant amount of funding or want to give your external
reader (a potential new-hire, partner, or advisor) a full picture of your business. It can range from 15 to 40 pages or more.
c) Operational / Strategic Plan
This is an internally oriented plan of an established company used primarily by the management team and board of directors
as a working plan of action. It helps to focus and align with company goals, and therefore should be updated at least annually.

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 d) Start-Up Business Plans
It is used by new businesses to detail the steps they will use to start. This document typically includes sections describing the
company, the product or service your business will supply, market evaluations and your projected management team.
Potential investors will also require a financial analysis.
e) Growth Business Plans
Growth plans or expansion plans are in-depth descriptions of proposed growth and are written for internal or external
purposes. The plan must provide all company details to satisfy potential investors.

MAIN PARTS OF A BUSINESS PLAN

1. Executive Summary
The Executive Summary is the first section of your business plan, and also the last one you should write. It represents the
reader’s first impression of your business. As a result, it will likely define their opinion as they read the business plan.
A good Executive Summary includes key facts about your business such as:
 Business & product description;
 Current positioning & targeting;
 Financial outlook & requirements;
 Past and future achievements & goals.
However, the most important function that a great Executive Summary serves is communicating to the reader why they should
read the rest of the business plan, and why you want them to.

2. Company Description
In this section of the business plan, you should explain precisely what your company does; what are its products or services;
in which market it operates and who are its customers. When describing your business, you should make sure to that the
reader knows what kind of market environment your business operates in, but also how it can thrive in such an environment
from a competitive point of view.
Make sure to include:
 Your mission statement
 Your philosophy, vision and goals of your company;
 Your industry and target audience;
 The structure of your business, detailing your customers, suppliers, partners and competitors;
If the company already has a well-defined product or service, this section can be divided into Company Description and
Products & Services.

3. Market Analysis
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume
and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms
of barriers to entry and regulation.
Include in this section:
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  a description of the industry
 information on your target market and market Need
 evaluation of your competition
 Barriers to entry
 market test results.

4. Competitive Analysis
The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current
competition and potential competitors who might enter your market. Every business has competition and understanding the
strengths and weaknesses of your competition is critical to making sure your business survives and grows.
This section should include:
 Profile Current Competitors
o What are their strengths? (It can be their price, service, convenience etc.)
o What are their weaknesses? (Opportunities you should plan to explore)
o What are their basic objectives? What are they trying to achieve?
o What marketing strategies do they use? Look at their advertising, public relations, etc.
o How can you take market share away from their business?
o How will they respond when you enter the market?
 Identify Potential Competition
o What will you do if competitors drop out of the marketplace?
o What will you do if new competitors enter the marketplace?
o How will your company be different from the competition?

5. Operations and Management Plan

The people and processes that are allow your business to operate on a daily basis are the key to your competitive advantage.
Your Operations & Management must be able to successfully realise what you ‘promised’ in the previous sections.
This section should include:
a) Operational Plan – this section outlines all the day-to-day operations of the business. It involves detailing all the
processes and resources that the company requires for each of its activities. You should include:
 Production or Service Delivery;
 Quality Control;
 Inventory;
 Suppliers;
 Location.
b) Organisational Structure – this is an overview of all the people involved in your business and their position in relation
to each other. You should detail the experience of the existing team, as well as the roles that haven’t been filled yet.
Include advisors and non-executive directors. Investors and banks will also look at this section to get an idea of salary
costs. As these are normally a significant cost centre, do not overestimate your staff needs.

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 6. Marketing and Sales Plan
This section of the business plan requires a deep understanding of your market space and how your business positions itself
within its niche and competes with existing players.
Within your Sales & Marketing strategy, you should outline:
 A definition of your target market – size, existing and emerging trends and projected market share;
 An assessment of your market – the attractiveness of the target market e.g. Porter’s Five Forces;
 Threats & Opportunities – you can use a SWOT Analysis to present these;
 Product/Service Features – thoroughly describe your product/service, its Unique Selling Points, as well as any
complementary offerings and after-sale services;
 Target Consumers – an ideal customer profile to describe exactly what niche(s) you are going to target;
 Key Competitors – research and analyse any other players inside or outside your market whose offering might
compete with you directly or indirectly;
 Positioning – explain in a short paragraph how your company differentiates from your competitors and how it
presents itself to your target niche;
 Marketing Plan & Budget – outline the marketing and advertising tactics you will use to promote your business,
giving an overview of your brand and of the communication elements that support it;
 Pricing – explain how your pricing strategy fits within the competition and how it relates to your positioning;

7. Financial Plan
Your Financial Plan is possibly the most important element of your business plan. This is especially true if the business plan
is aimed at investors or lenders.
This section includes projections, budgets and goals that are unique to each business. In particular, you should focus on
explaining the assumptions on which you based your forecasts, more than on the forecasts themselves. Every good Financial
Plan will include:
 Profit & Loss Projection – A month-by-month forecast of sales, operating costs, tax and profits for the following
year. Sometimes three years.
 Cash Flow Statement & Forecast – This financial statement tracks the amount of cash that leaves or enters the
business at any given time.
 Breakeven Analysis – This is a cornerstone of your business plan. Here you should show what level of projected
sales allows the business to cover its costs.
 Capital Requirements – This point is fundamental as it shows investors what their money will be spent on. It
should contain a summary of all the expenses for big purchases and day-to-day running costs.
The Financial Plan is usually followed by the Appendices. Here you should include detailed spreadsheets and calculations
used to prepare the financial statements.

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