Business Plan Template

Business Planning Business Plan Template 1. 2. 3. 4. 5. 6. 7. Business Summary Risk Analysis Product/Service description Ownership, Management and Personnel Market Analysis Financial Forecasts Business Plan presentation 1. Business Summary While appearing first, this section of the business plan is written last. It summarises the key elements of the entire business plan and is a brief introduction to the company and the product or service and how it can be defined as an ongoing business activity. You are trying to grab the attention of the reader and convince them to take time to read the rest of your plan. The summary needs to grab their attention immediately. The Business Summary should contain the following elements: Business Idea In this section you need to clearly outline your business proposal. Here you will provide sufficient description of your product or service for the reader to gain a clear understanding of the nature of your business Once drafted, get someone not involved in your business to read this section only to see if they can explain your business back to you. If they can’t this section has not served its purpose and needs further work. Company Objectives It will help the reader of your plan if they understand your objectives for being in business. The company objectives need to be SMART: specific, measurable, achievable and time bound You will most likely have both business objectives (e.g. to achieve a return of 20% on investment by the end of the YES business year) and personal objectives (e.g. to learn the financial controls within a business system by the end of the YES business year). You should probably restrict your objectives to no more than the 3-4 business and 2-3 personal. Mission Statement This is a recorded clear and concise statement of an overall company goal providing direction for the business. 2. Risk Analysis In every business there are risks. It is important to consider these risks as you plan your business activities (Structure, management, product, market etc). A useful way of assessing the risks is to include them as part of a “SWOT” analysis: S Strengths W Weaknesses O Opportunities T Threats Business Planning “Strengths” and “Weaknesses” should focus on the internal environment (management, product and service), whilst “Opportunities” and “Threats” should focus on the external environment (economy, market and competitors). Clearly, it is important that your business idea has significant strengths (or can develop them) and a plan to counter to any weaknesses. It should be enhanced to take advantage of any opportunities and thought should be given to its response to perceived threats. A SWOT analysis should provide proof to you, your investors and funders etc., of the likelihood of your business succeeding or failing. If your analysis suggests it will fail you need to reconsider your idea. As a team you should have completed a full risk analysis. An important element of assessing risks is ensuring your company can run in a safe way. Keeping a small business afloat can be difficult and work-related injury or disease could result in unexpected costs or the loss of a valued staff member. As a business owner/manager the law says that you have to look after the safety and welfare of people in your workplace. You must also involve staff and their health and safety representatives on an ongoing basis. Your business plan needs to show that health and safety is integrated into the way you manage your business. Include a paragraph confirming that you have a health and safety policy, that you have identified possible hazards and what to do in emergencies, that you have an incident recording process and that you have training systems to make employees aware of their requirements. You should also include your health and safety documents in an appendix to the plan. This section provides an insight into those possible internal and external constraints and their impact on the business plan. This also includes any regulatory compliance as well as intellectual property theft. Your group must also develop Strategies of overcoming any company constraints and maximising opportunities to achieve company goals are established via contingency (what if) plans. 3. Product/Service Description In this section you can describe in greater detail the technical specifications of your product/service. Include drawings, photos etc. to present the product or service to the reader. The purpose of this section is to provide sufficient detail for the reader to conclude on how realistic your sales forecasts are. That is, to say you are trying to convince your reader that your product or service will have market appeal and will sell. This section could include:  Description of the main products and services briefly outlining what is being sold and for what it is used.  An explanation of the process of production and the technology used  The sourcing of the inputs into the production of the product or service are explained  The quality standard of the product is explained and systems to ensure this quality standard are in place in terms of product and service  A timeline showing the companies projected timing of activities and significant milestones  Your product’s advantages, including  Is it cheaper?  Is it better quality?  Is it effective/cost effective?  What unique features does it have?  Increased benefits to customers? Business Planning  Does it have any disadvantages?  What is the current status of the product?  Is it still in the research and development stage or is it already established on the market?  What is the product’s likely lifespan? 4. Ownership, Management and Personnel In this section you need to provide details of business ownership. List the number of shares together with their ownership and/or the availability for sale if applicable. The business plan must communicate the management’s capabilities and convince readers that they can achieve the objectives set. A description of the management structure, together, with a statement about the “leaders” role and style of management could prove useful. The following points should be covered in this section: A summary of key managers, showing  Their roles, to demonstrate that you have a balanced team.  Their experience and achievements, and their relevance to future plans.  Photos may help to brighten this up and add a creative touch  Include an organizational chart. 5. Markets and Marketing In many investors’ eyes this section is second only in importance to their assessment of management’s capabilities. It is often the hardest section to write. Sales figures are the most difficult to forecast accurately and as a result this section is the most difficult to justify. Too often business plans are written from the view point of the producer (ie the company). The company is very enthusiastic about a product but doesn’t say why or how a customer will purchase it, expecting an investor to recognise immediately the market’s need for the product. It is not good enough to estimate simply that your company will achieve X% of the market. You must justify that assertion and show you understand your market and your role and position within it. Investors want to know whether your company has a lead over competitors and whether you can maintain that lead. How do we achieve this? Marketing has been defined as the art of identifying a need and planning how to satisfy the need. The Market  Description (the needs of the market)  Describe your market generally and its future prospects, setting out the market size. More importantly, define your particular niche in terms of product, customers etc. Include summaries of any statistical information that is available to your niche market.  Customers (market segmentation)  Who are they?  Where are they?  Why do they buy?  When do they buy?  What do they buy? Business Planning  Competition  Who are they?  Where are they?  What are their strengths and weaknesses?  Will you compete successfully against them? Marketing and Promotion  What are your plans for marketing?  Advertising  Trade shows  Promotional literature  How will you distribute your product?  Provide an Explanation as to how the marketing mix will be applied to achieve the company’s objectives These items are crucial to the accuracy of the sales forecast and require considerable thought and effort to complete. You must demonstrate a clear market need for the product, that you understand your customers’ needs and that your product meets these needs. When you write this section, try to look at your company and product from the customer’s point of view. 6. Financial Forecasts A business’s financial performance is generally measured in terms, of profit and increased shareholder’s wealth. It is necessary, therefore, to consider forecast as part of your business plan, the likely financial outcome of your business. This is usually done by way of:  Breakeven Analysis  Forecast Statement of Financial Performance (or Profit and Loss)  Forecast Cashflow  Forecast Statement of Financial Position (or Balance Sheet) It is often best to start with the breakeven as most of the figures are known. To complete the Performance Statement Forecast it is best to start with the Sales forecast, broken down into a month by month basis.  How many will be sold each month?  At what price?  When will you be paid? Then move onto the production costs as these will fall out of the sale information. E.g. sales of 250 CDs, cost per CD to manufacture is $1 therefore production cost that month is $250. When forecasting, be realistic! It is important to strike a balance between the two extremes.  Don’t undersell yourself.  Don’t be too optimistic either. You should accept that your forecasts are not set in concrete. Rather, they are estimates. Business Planning You could include separate “optimistic”, “realistic” and “desperate” forecasts based on different assumptions. Or you could prepare “what if” sensitivity analyses showing, for example, the effect of a 10% reduction in sales or the effect of introducing a new product three months later than planned. Spreadsheets are a useful tool for the calculations. It is possible that you will have recognized that, sometime in the future, your company will be faced with alternative options depending on the outcome of certain events in the early stages of your forecast. If this is the case, include details of the alternative scenarios and comment on their relative effects. This section must also include a statement of where start up capital is coming from and any other ongoing sources of finance as well as describing what the company has put in place a set of procedures to ensure the safe receipting and payment on monies from the company’s accounts. CHECK POINT The business plan has clarity and conciseness. The layout and presentation is clear and logical and makes easy reading. The explanations and description are concise and to the point. 7. Business Plan Presentation “Act professionally, but think differently.” What a YES judge or a local contributor will remember is how you are different from everyone else. Like every other YES company, you will have to cover all the criteria for both the business plan presentation and the oral presentation. However, can you think about how to make sure your company sticks in their mind and they become your number one fan? Examples over the past few years have included:  Turning the business plan into a poster.  Delivering your business plan presentation with no cue cards.  Humour and emotion.  Including a product in the presentation, including food/coffee.  Celebrity endorsement.