CANADA MORTGAGE AND HOUSING CORPORATION
Writing a Business Plan
A business plan is a contextual the Financing section; and the
After completing your housing blueprint—a guide for your project. Management section.When you write
need and demand study, you a business plan, stay with this format –
A good business plan demonstrates to
have determined that there’s an those reviewing this document will
funders, lenders and the community who
increasing need for affordable expect to see these critical decision-
you are and details your capabilities:
housing in your community. making elements. If any crucial section
operations, marketing, management, and
is missing, the reviewers may decide to
You have worked hard to gain financials.Your business plan validates
read no further, despite how wonderful
public support for building that your housing project has been
your business idea is.
affordable housing, but how carefully considered, from conception
are you going to convince to operation, and is viable.
Background: Setting Goals,
the funders and financial In developing your business plan, Research and Analysis
institutions that your project you will
When putting together a business
is viable? (1) identify your goals; plan, the first order of business is to
(2) provide researched information examine and identify your goals and
A well-prepared business
and analysis; and the relationship of these goals to your
plan will help you to ‘sell’
(3) assemble the information proposed housing project.Your business
your concept. When writing in a logical, easily understood plan should be centred on these goals,
a business plan, you must format. providing both scope and meaning to
determine your audience(s). your affordable housing development(s).
The level of detail you provide will
Is the intention to network depend in part on the complexity of A strategic planning session may prove
within the community, your housing proposal, and on the useful in identifying the goals and
document to funders your requirements of those who will use direction of future projects.
suitability to manage housing, the plan to make a decision. The second order of business is to
or convince bank officials that conduct research and analysis for
your project is a good credit Key Components projects that reflect your goals.The
risk? This decision will help The key sections of a business plan are: easiest way to go about organizing all
shape your business plan. the Executive Summary; the Business your experiences, interviews and
section; the Market Analysis section; research is to create files for each
Writing a Business Plan
section of the business plan.These files Executive Summary built-form(s); and whether they are
can be paper-based, computer-based, or interested in living in the proposed area.
A well-composed executive summary will
set-up using business planning software. A market analysis also provides an
precisely illustrate your goals and plans,
As you start the research and collection overview of the housing sector of which
summarizing the key elements of the
phase of planning, fill your files with you are part, including development and
entire business plan.While appearing
notes and printouts. Begin with an operational trends, and major players in
first, this section of the business plan is
overview of the housing sector, the sector, such as governments, non-profit
usually written last.When you have
uncovering industry and association housing providers, co-ops, and private
thoroughly completed all sections of
reports.Then you can start the financial developers. It should also include an
the business plan, write the summary,
assessment for the project, working evaluation of your direct and indirect
highlighting key points and defining
closely with your accountant to develop competition, with an assessment of
'affordable housing' in the terms you
realistic projections; being overly competitive advantage and an analysis
are using for your development(s).
optimistic will raise eyebrows with of how you will overcome any entry
your investors or banker. barriers to the chosen market.
Organization and Services
Provide the legal name, physical address,
Suggested Activities and detailed description of the nature Suggested Activities
■ Identify in-house staff, board of your business.This section should ■ Complete a Housing Need and
member, or external consultant provide a description of your affordable Demand Survey. (Refer to CMHC’s
to write your business plan. housing project. Housing Need and Demand Fact
■ Establish a timeline for conducting Sheet for details.)
the research and writing of your ■ Incorporate findings from your
business plan. Suggested Activities need and demand assessment
to demonstrate target market
■ Explore your banking institution's ■ Conduct a strategic planning
needs and how they are currently
website for business planning session.
met (or not).
information. ■ Summarize your mission,
■ Provide details on your target
■ Help to identify an approach for objectives and vision.
market, including demographics,
data collection that works best ■ Produce a history of your socio-economic status, and
for your project. organization, including key geographic location.
■ Ensure both sufficient quantitative successes.
■ Describe your place within the
and qualitative data will be housing sector, and identify your
collected. competitive advantage or how
Market Analysis you will work together with other
housing providers, developers,
A market analysis, including a completed
Formatting your Business Plan Housing Need and Demand survey,
■ Identify how you are positioning
examines the primary target market for
The business plan should support yourself to enter the affordable
your affordable housing development or
your mission, objectives and vision in housing market.
service, including geographic location,
order to be successful.The following ■ Describe how you have the
demographics, and target market service
information presents each section ability to meet the housing
needs. It will answer whether your target and service needs of the target
of the business plan in the order in
group(s) are willing to pay the proposed market and the number of
which they will appear, with a brief
rents or purchase prices; whether they people you intend to serve.
explanation to help guide you through
are willing to move into the proposed
the writing process.
2 Canada Mortgage and Housing Corporation
Writing a Business Plan
Marketing Plan The financial plan provides a description
■ Establish plans and policies to of the funding requirements, detailed
A marketing plan provides a detailed ensure good governance.
financial statements, a financial statement
explanation of your sales and/or rental ■ Ensure you have hired capable analysis, and an initial timeline for your
revenue projection, pricing plan, management for the construction /
affordable housing development(s). This
proposed advertising and promotional development phase.
will also detail your start-up budget,
activities, and support services benefits.
replacement reserve budget, cash flow
Property Management Plan projection, income statement, and
balance sheet for the development(s).
Suggested Activities The property management plan will
focus on the operations of the building,
■ Project how many units you
from building occupancy to the end of its
will sell and/or rent, and services
anticipated life expectancy. It is a Suggested Activities
to be offered over several years.
description of the development's physical ■ Refer to CMHC’s Equity,
■ Calculate your revenue and
location, facilities and equipment, Funding, and Financing Fact
expenditures, accounting for any
market trends or variations in employees required, inventory Sheet for capital plan details.
construction costs, land pricing, requirements and suppliers, and any ■ List and describe any expenses
and sales. other applicable operating details, such as your project will incur in the
■ Explore and describe how a description of a successful program development / construction
your target market will access you currently run or other examples of phase, including rezoning
information about your affordable your success. applications, permits, equipment
housing units. rental, additional staff, etc.
■ Categorize cost of unit
Suggested Activities construction, overhead expenses
Construction / Development and capital expenditures.
Management Plan ■ Outline the operations of your
business, including: staff to meet ■ Estimate costs for the first
Potential funders, lenders and CMHC will the objectives or a hiring plan to year of operation.
assess your management or capacity to attract employees with the ■ Illustrate the ability of your
manage during the construction phase as required skills for the project, project to sustain itself or
well as post-occupancy. The construction / equipment, office infrastructure, grow over a 3 to 5 year period
cash or other assets. by establishing an income
development management plan provides
an outline of your legal structure and
development management resources, ■ Develop a balance sheet of
including your internal management your sponsoring lenders,
A financial plan contains two sub- partners, and any other assets.
team, external resources and human
sections: (1) the Capital Plan—the Include any seed capital, fixed
resources needs. Include a description of
equity, funding and financing that will asset financing, or working
other new buildings you have been
be required to develop the project; and capital for the project.
involved in developing, if applicable.
(2) the Operating Plan—the revenue ■ Meet with your accountant
required to operate the building once to ensure financial projections
and assessments for your
Suggested Activities it is operating fully.The Capital Plan
development(s) are feasible.
will illustrate that the project is feasible
■ Ensure financial statements are ■ Include an annual report,
(you have development funding identified
available and financial controls detailed financial statements,
and/or secured).The Operating Plan
are in place. and a financial analysis.
will ensure that the project is viable
■ Ensure your corporate filings
(the revenue will support the
operating costs and mortgage debt).
Canada Mortgage and Housing Corporation 3
Writing a Business Plan
Appendices and Exhibits Conclusion
Include any additional information Making a good first impression with
that will help to establish the credibility ■ Include the need and demand funders, lenders and the community
of your project idea, such as marketing statistical summary, preliminary is important. A well-written business
waitlist information, support
studies, photographs of your other plan that opens doors and wins the
letters, contract or required
developments, and/or contracts or support and/or money is a plan that
legal agreements, partnership
other legal agreements pertinent agreements (if this is a jointly has been revised and reviewed.
to the operation of the project. sponsored project) and examples Check your business plan before
of other programs or services sending it out. Is it clearly worded?
that you run successfully. Is it complete? Have you asked others
for feedback? Have you incorporated
feedback, proofread and edited the
business plan? Business planning may
be time intensive, but by following
these critical steps, you will ensure
your organization, and current initiatives
have a very good chance at funding
and success in future operations.
The Enterprise Foundation: A Step-by-Step Guide to Preparing an Effective Business Plan.
Business Development Bank of Canada: www.bdc.ca
Business Planning (for Non-Profits or For-Profits), www.managementhelp.org/plan_dec/bus_plan/bus_plan.htm
ONPHA Development Training and Support Program, Business Plan Checklist, www.onpha.on.ca
The Enterprise Foundation, Planning a New Business Venture: A Step-by-Step Guide to Preparing an Effective Business Plan.
Nova Scotia Housing Development Corporation Business Plan 2005-2006
Housing Connections (City of Toronto) Business Plan 2005-2007
Human Resources and Skills Development Canada – Industry Profile List www.hrsdc.gc.ca
Canada Business www.canadabusiness.ca
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