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What is the content of a business plan?

by D. Power

There is enormous variability in the content and organization of business plans. My preference is 15-20 page documents that are straightforward, easy to understand and not redundant. Say it once and that should be enough. The only redundancy should be creation of a 1 page, single spaced executive summary of the plan.

A business plan emphasizes what will be done, when, where, how and why it will be done. The plan describes the business model, i.e. how a business's products and services create value for customers, the cost structure and the sources of revenue and profit margins.

Business plans are used internally for management and planning and are also used to persuade bankers or venture capitalists to invest money in a venture.

A business plan can be seen as a collection of sub-plans including a marketing plan, financial plan, production plan, and human resource plan.

There are many outlines for business plan documents. The following modified from Wikipedia is typical for small businesses:

  • Executive summary
    • explains the basic business model
    • gives rationale for the strategy
  • Background
    • gives short history of company (unless it is a new company)
    • provides background details such as:
      • age of company
      • number of employees
      • annual sales figures
      • location of facilities
      • form of ownership including
        • sole proprietor
        • partnership
        • entrepreneurial startup
        • private corporate startup
        • publicly traded corporation
        • limited liability company
        • public utility
        • non-profit organization
    • background of key personnel including
      • owners
      • senior managers
      • managing partners
      • head scientists and researchers
  • Marketing Plan
    • the macroenvironment
    • the competitive/industry environment
    • the customer priorities
    • product strategy
    • pricing strategy
    • promotion strategy
    • distribution strategy
  • Production and Manufacturing Plan
    • describe major processes
    • production facility requirements - size, layout, capacity, location
    • inventory requirements - raw materials inventory, finished goods inventory, warehouse space requirements
    • equipment requirements
    • supply chain requirements
    • fixed cost allocation
  • Finance Plan
    • source of funds
    • existing loans and liabilities
    • projected sales and costs
    • break even analysis
    • expected return
    • monthly pro-forma cash flow statement
  • Human Resources Plan
    • assign responsibilities
    • training required
    • skills required
    • union issues
    • compensation
    • skills availability
    • new hiring

References

http://en.wikipedia.org/wiki/Business_plan
http://www.sba.gov/library/pubs/mp-32.pdf
http://www.business.gov.au



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