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1. A business plan is a formal written document describing the nature of the business, the sales and marketing strategy, and the financial background containing a projected profit and loss statement. 2. Business plans may also target changes in perception and branding by the customer, client, tax-payer or larger community. 3. When the existing business is to assume a major change or when planning a new venture, a 3 to 5 years business plan is required since investors will look for their annual return in the 3 to 5 year time. 4. A business plan may be used for the following reasons: They are mainly the decision-making tool. They are used by investment-seeking entrepreneurs to convey their vision to potential investors. They may be used by firms to attract key employees, prospect for new business. They may be used to make deal with suppliers. They may be used to understand better management of companies by the firms. 5. Though business plans have many different presentation formats, business plans typically cover five major content areas: A. Background information B. A marketing plan C. An operational plan D. A financial plan E. A discussion of the decision making criteria that should be used to approve the plan. 6. Some of these content areas may be more or less important depending on the kind of business plan. A business plan should contain whatever information is needed to decide whether or not to pursue a goal. A. Background information It includes: Executive summary (includes companys information, project description etc.) Organisational background (it includes no. of employees, annual sales figures, location of facilities, current development status, sole proprietor, partnership, joint venture, public utility, non-profit organisation, cooperative etc. ) History (It includes founding date, major successes and strategically valuable learning experiences) Management Team (includes board members,, owners, senior managers, managing partner, head scientists and researchers etc.) B. Marketing plan It includes: Pricing of product Demand management Distribution/positioning
Promotion and brand development C. Organisational plan Following are some of the outlines: Supply chain requirements Production inputs Facility requirements - size, layout, capacity, location Equipment requirements Warehousing needs for raw materials, finished goods Space requirements Communications & technology requirements(hardware & software, billings, websites, security & privacy) Staffing needs and training programs. D. Financial plan It includes the following key points: Current financing Key investors and owners Existing loans and liabilities Terms and obligations Funding plan IMF World bank Financial forecasts Balance sheet Income statement Cash flow statement Financial projections (includes loan repayment period projection etc.) Financial portions of marketing, asset development and operations. Graphs of key values: Gross Revenue, Net present value, EBITDA(Earnings Before Interest, Taxes, Depreciation and Amortization) 7. Typical structure for a business plan for a start up venture cover page and table of contents executive summary business description business environment analysis industry background competitor analysis market analysis marketing plan operations plan management summary financial plan attachments and milestones