Building YOUR DREAM

A Canadian Guide to Starting Your Own Business

Business Plans

Eleventh Edition
Building YOUR DREAM

Learning Objectives
LO1 Evaluate three different types of business plan models.
LO2 Discover the importance of developing a business plan.
LO3 Identify the components of what should be included in
a traditional business plan.
LO4 Identify the elements of alternative business plan
models, the Business Model Canvas, and the Lean Canvas.

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Types of Business Plans

1. Traditional business plans

2. The Business Model Canvas
3. The Lean Business Model Canvas

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Preparing Your Business Plan

What is a business plan?
• A written document that describes all aspects of your
business venture.
Why consider the ‘Big Picture’?
• Be prepared
• Be ready to make adjustments

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Business Planning
The “Big Picture”

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The Steps in the Business Planning Process

Step 1: Develop a Vision Statement

• Focuses on the ‘why’ of your business
• Should be clear, concise, inspirational, and
memorable
• Should be 1-2 sentences

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The Steps in the Business Planning Process

Step 2: Formulate a Mission Statement
• Focuses on the ‘how’ of your business
• Defines the purpose, reason for being
• Should be about a paragraph
Key components:
– What your business will do - market focus, niche/image
– Planned location and the geographic market served
– Plans for growth
– Sustainable uniqueness

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Preparing Your Business Plan

Step 3: Define Specific and Measurable Objectives
• Provide you with the means to directly measure the
performance of your business.
• Define measurable targets.
• Refer to a specific outcome, not an activity.
• Contain a specific time deadline.

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Preparing Your Business Plan

Step 4: Develop a Realistic Business Plan
• Many ways this can be done
• Must be clear, focused, realistic, complete
• Should be viewed as your selling document

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Why Develop a Business Plan?

For the internal evaluation of your business
• Both as a checklist to see that you have covered all the
important bases and as a timetable for accomplishing your
stated objectives
For external use
• In attracting resources and obtaining support for your
venture

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How Long Should Your Business Plan Be?

• Page count varies – no set length
– The main points should show up in a business plan as
quickly as they do in a business presentation
• Graphs and infographics are valuable
• Most important parts are:
– An executive summary
– Market opportunity and competitive advantage
– Goals and business strategy
– Detailed financials
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How Long Should Your Business Plan Be?

The Summary Business Plan The Full Business Plan

• About 10 pages • Evolves into an
• Good for early stage use operations plan
in getting loans • States objectives for a
• Considered a “to-the- one year period
point” plan • Typically includes a
• Intended to generate budget
interest • Used for Board approval
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How Long Should Your Business Plan Be?

The Operational Business Plan
• Exceeds 40 pages, however used infrequently.
• Should be avoided as they reflect a lack of
discipline and focus.
• Some operational plans are bare bones: include
objectives, responsibilities, and annual goals.

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Who Should Write Your Business Plan?

• You should write your business plan.
• Do not hire someone else to write the plan for
you.
• Get help when necessary - obtaining licences,
permits, patents, other legal considerations, etc.
• It takes time – weeks to several months

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What Should Your Plan Contain?

Letter of Transmittal
• Introduce your plan to the reader and outline the major
features.
Title Page
• Provide identifying information about you and your proposed
business (Name, address, phone number, etc.), and key
contacts.
Table of Contents
• List the major headings and subheadings contained in your
plan.

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What Should Your Plan Contain?

Executive Summary
• 1-2 page summary of the most important points in your
plan
• May be the most important part of the plan
• The fact sheet summarizes the basic information that
relates to the venture

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What Should Your Plan Contain?

Body of the Plan
• Company and the Industry
– History and current situation of your company
– Goals and objectives for the business
– Principal characteristics and trends in the industry
• Product/Service Offering
– Detailed description of your product or service
– Outline stage of development and proprietary position

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What Should Your Plan Contain?

Market Analysis
• Describe the profile of your principal target
customers
• Indicate current market size, trends, and
seasonal patterns
• Assess the nature of your competition
• Estimate your expected sales and market share

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What Should Your Plan Contain?

Marketing Plan
• Detail the marketing strategy you plan to use
• Describe your sales strategy, advertising and promotion plans,
pricing policy, and channels of distribution
Development Plan
• Outline the development status of your product and what is still
required to get it to a market-ready state
• Are there regulatory, testing, or other requirements that still have to
be met?
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What Should Your Plan Contain?

Production/Operations Plan
• Outline the operating side of your business
• Describe:
◦ Location and facilities
◦ Manufacturing plans and costs
◦ Capital equipment needs and labour requirements
◦ Environmental and other issues

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What Should Your Plan Contain?

Management Team
• Identify key management people, their responsibilities,
and qualifications
• Indicate the principal shareholders of the business, your
principal advisors, and the members of the board

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What Should Your Plan Contain?

Implementation Schedule
• Present an overall schedule indicating what needs to be
done to launch business and the timing required
• Discuss the major problems and risks that you will have to
deal with

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What Should Your Plan Contain?

Financial Plan
• What financing is needed
• Outline proposed terms of investment
• Overview of current financial structure
• Realistic financial projections including:
• Cash flow forecasts
• Pro forma balance sheet
• Pro forma profits and loss statements
• Break-even analysis

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What Should Your Plan Contain?

Appendices
• Intended to explain, support, and supplement the
material in the body of your business plan
• In most cases, this material is attached to the back of your
plan.

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Business Model Canvas

• A tool to visualize, challenge, and (re-) invent
business models.
• Generally used by strategic managers and is often
used instead of the traditional business plan
• The Business Model Canvas (BMC) gives you the
structure of a business plan without the
overhead.

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Business Model Canvas – Nine Elements

1. Customer Segments 5. Revenue Streams

2. Value Propositions 6. Key Activities
3. Channels 7. Key Resources
4. Customer Relationships 8. Key Partnerships
9. Cost Structure

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Lean Model Canvas

• Lean Canvas is an actionable and entrepreneur-
focused business plan.
• Focuses on problems, solutions, key metrics and
competitive advantages.
• The structure is similar to the Business Model
Canvas but is more target-specific and is good for
both small and large businesses.

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Sample
Lean
Business
Model
Canvas

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Summary
LO1 – Evaluate business plan models.
• The traditional business plan, the Business Model Canvas,
or the Lean Canvas.
• All three of these should include at a minimum your
product, service, or solution; your prospective customers;
your marketing plans; your unique value proposition; your
financing in terms of costs and revenues; key resources and
partners; and a description of how you plan to implement
your business.

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Summary
LO2 – Why is a business plan important?
• Outlines what you are planning and how you are going to
get there
• Acts as a guide for operating your business
• Can be used to secure financing and attract investors
• Can be referred to on a regular basis to ensure you are on
track with your goals or to make adjustments due to
possible changes to the market or industry

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Summary
LO3 - Components of a business plan
• An executive summary and – Development plan
fact sheet – Production/operations plan
• Background information – Management team
• Product/service offering description
• Market / competition – Implementation schedule
analysis – Financial plan
• A marketing plan – Appendices

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Summary
LO4 - Business Model Canvas and the Lean Canvas.
• Nine key elements: customer segments, value propositions,
channels, customer relationships, revenue streams, key
activities, key resources, key partnerships, and cost structure.
• The lean canvas focuses on start-up factors such as uncertainty
and risk.
• Key elements - the problem, the solution, key metrics, and
unfair advantage, which is basically your competitive
advantage.

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