[COMPANY NAME AND ADDRESS]

Business Model Plan

[Company Logo]
[Author]

[Date Prepared]

pg. 1
Using This Template
Before you complete this suggested business model plan template and start using it,
consider the following:

1. Do your research. You will need to make quite a few decisions about your
business including business model, structure, marketing strategies and finances
analysis before you can complete the template. By having the right information to hand
you also can be more accurate in your forecasts and analysis.

2. Determine who the plan is for. Does it have more than one purpose? Will it be used
internally or will third parties be involved? Deciding the purpose of the plan
can help you target your answers. If third parties are involved, what are they
interested in? Although don’t assume they are just interested in the finance part of
your business. They will be looking for the whole package.

3. Do not attempt to fill in the template from start to finish. First decide which
sections are relevant for your business and set aside the sections that don’t apply.
You can always go back to the other sections later. Remember a business model
plan combines the components of a business plan with business model analysis.

4. Use the [italicised text]. The italicised text is there to help guide you by
providing some more detailed questions you may like to answer when preparing
your response. Please note: If a question does not apply to your circumstances it
can be ignored.

5. Get some help. If you aren’t confident in completing the plan yourself, you can
enlist the help of a professional to look through your plan and provide you with
advice.

6. Actual vs. Expected figures. Existing businesses can include actual figures in the
plan, but if your business is just starting out and you are using expected figures for
turnover and finances you will need to clearly show that these are expected figures
or estimates.

7. Write your summary last. Use as few words as possible. You want to get to the
point but not overlook important facts. This is also your opportunity to sell yourself.
But don’t overdo it. You want prospective banks, investors, partners or wholesalers
to be able to quickly read your plan, find it realistic and be motivated by what they
read.

8. Important Point to Remember. The advantage of a business model plan over a

business plan (The business model plan is the mechanism through which
the company generates its profit while the business plan is a document presenting the company's
strategy and expected financial performance for the years to come) alone is the increased focus
on how the business will create profitable revenue streams and less on how the business will
operate once it is generating revenue. If you focus on what matters — profitable revenue
— the rest tends to take care of itself.

9. Review. Review. Review. Your business model plan is there to make a good
impression. Errors will only detract from your professional image. So ask a number
of impartial people to proofread your final plan.

pg. 2
Table of Contents
Business Model Plan Summary x
Business Background x
Company x
Industry x

The Crucial Areas of the Business Model: x

Market Attractiveness (Offering – Sector 1) x
The Target Market x
Target Customers x
Market Research and Analysis x
Marketing Plan and Strategy x
Marketing Plan x
Unique Value Proposition (UVP) (Offering –Sector 2) X
Products and Services x
Competition x
Brand x
Revenue Model (Monetization –Sector 1) X
Margins x
Cost Advantage x
Financials x
Sales Model (Monetization – Sector 2) X
Sales Forecast x
Sustainable Competitive Advantage (Sustainability – Sector 1) X
Innovation Factor (Sustainability – Sector 2) X
Avoidance of Pitfalls (Sustainability – Sector 3) X
Graceful Exit (Sustainability – Sector 4) X

Operational Overview X

Appendix X
• Organizational Chart
• Products/Services (Minimum Viable Product, MVP)
• SWOT ANALYSIS (STEEP Model, Porter’s 5 Forces and VARIO Framework)
• Competitors & Blue Ocean Positioning (Blue ocean strategy is the
simultaneous pursuit of differentiation and low cost to open a new market
space and create new demand.)
• Sales & Distribution Channels & Sales Funnel
• Start‐up Costs
• Performas (Financial Projections)
• Break‐Even Analysis
• Risk Analysis
• Supporting Documentation
• MDP Brochure

pg. 3
Business Model Plan Summary
[Please complete this page last]
Your business summary should be no longer than 2 pages and should focus on why
your business is going to be successful. Your answers below should briefly summarize
your more detailed answers provided throughout the body of this plan.
It should succinctly give the information that proves your business case and need for
this startup. It should provide sales highlights, the market values, how you reach the
market, the revenue model, profit and margins. It should provide the grand vision
and the reason for this start-up and why it will be successful in succinct and focused
way. Don’t forget to tell them what product/service you are offering and why (The
Need).

Business Background
This section should detail your company’s history. This part will vary, depending on
how developed your business is. The history of a startup is obviously different than for
an existing company. This section should be about a page long, although it’s OK to
stay under that limit if you’re starting a brand-new company. Investors will review
this section of the plan to see who is behind the business, how the business idea
came about, and the basic background the business entity has in the marketplace.
The following points should be covered:

Company
• The business you are in or plan to be in, including a description of your goods
or service;
• The background of your business, including when it was started, current
ownership, its legal structure, and highlights of its progress and prospects; and
• The principals of your business and the roles each played or will play in the
firm.
Industry
• A brief discussion of your industry (e.g., restaurant, plastics, executive
recruiting, etc.);
• Your view of the current status and prospects for the industry;
• Description of your principal competitors and how they are performing in
terms of growth in sales, profits and market share; and
• An analysis of the effect of major economic, social, technological or
regulatory trends.

pg. 4
The Crucial Areas of the Business Model
[Your business model is the core concept upon which you build your business model
plan. Your business model should be a significant portion of your business model
plan.]

Market Attractiveness (Offering – Sector 1)

It is very important to remember that creating a powerful offering would be a great
advantage for your business model. That is creating a good or service that your
customers want, need and would buy. However, all this will depend on selecting the
right market in order to promote a differentiated offer by defining the business’s,
price point(s), unique value proposition (unique selling proposition), and brand. The
following sections will assist you to prepare this section of the business model plan.

pg. 5
The Target Market
Where do your goods/services fit in the market?

Are they high-end, competitive or budget?

pg. 6
How does this compare to your competitors? What is the market size?

pg. 7
Target Customers
Define who your target customers are and how they behave. You can include age,
gender, social status, education and attitudes. Identify your key customers. (These
can be large consumers of your products or individuals whose satisfaction is key to
the success of your business.) How will you educate customers to buy from you?
Why will they care? Your future markets beyond start-up Beachhead – these were
discovered in your customer discovery either vertical or horizontal based on slight
modifications of your Market Development Program, MDP.

• Identify your customers, their characteristics, and their geographic locations;

that is, demographics. The description will be completely different depending
on whether you sell to other businesses or directly to consumers. If you sell a
consumer product, but sell it through a channel of distributors, wholesalers,
and retailers, you must carefully analyse both the end user and the
intermediary businesses to which you sell.

pg. 8
Watch Sales by Region
REGION WATCH POPULATION INDEX OF
SALES WATCH
% SALES
ENC 20% 15% 1.33
SA 16 17 0.94
MA 15 13 1.15
WEST 15 21 0.71
WSC 10 10 1.00
WNC 8 7 1.14
NE 6 5 1.20
ESC 5 6 0.83
MOUNT 5 6 0.83

pg. 9
Market Research and Analysis
What statistical research have you completed to help you analyse your market? Did
you use a survey/questionnaire? If so, you may like to attach a copy of your
survey/questionnaire to the back of this plan.
• Summarize market growth, total potential market, current percentage market
share and any marketing projections (use table in appendix).

pg. 10
Marketing Plan and Strategy
How will you target your products/service to them? How will you maintain a good
relationship with your customers? What techniques will you use? How will you keep
your customers coming back? Have you introduced customer service standards?
Do you follow any code of practice?
• Strategy is creative and hard to predict. However, the marketing strategy
depends a great deal on which market segments the firm has chosen as
target market groups. You may also want to look at media strategy,
organizational development and other factors. In addition, your marketing
strategy normally depends on the target market focus that you chose to
emphasis your product or service uniqueness.

pg. 11
The marketing plan describes how you intend to sell your product or service, how you will
motivate the customer to buy. Begin the process of developing your marketing plan by
looking at the key factors that affect the marketing of your product or service such as:
a. Facts about your industry
b. Total size of your market (TAM)
c. Percentage share of the market you have. (This is important only if you are a major
factor in the market.) (SOM current size you can service – note TAM, SAM & SOM are
in $ value)
d. Current demand in target market
e. Growth history
f. Trends in target market — growth trends, trends in consumer preferences, and trends
in product development
g. Growth potential and opportunity for a business of your size (SAM – share you want
to have by – scale)
h. What barriers to entry keep potential new competitors from flooding into your
market?
• High capital costs
• High production costs
• High marketing costs
• Consumer acceptance/brand recognition
• Training/skills
• Unique technology/patents
• Shipping costs
• Tariff barriers/quotas

pg. 12
Unique Value Proposition (UVP) (Offering –Sector 2)
Products and Services
How will your products/services succeed in the market where others may have
failed? What gives your products/services the edge?
• For each product or service, describe the most important features. That is,
what does the product do? What is special about it? [In Appendix supply your
MDP Brochure & Specifications]
• Describe their benefits. That is, what does the product/service do for the
customer?

pg. 13
Market Development Program (MDP) Brochure & Specifications

Competition
Why do you have an advantage over your competitors? How will your
products/services succeed in the market where others may have failed?
• What products and companies compete with you? List your major
competitors (Appendix table).
• Do they compete with you across the board, just for certain products, certain
customers, or in certain locations?

pg. 14
Brand
Is your brand meaningful to consumers? Do you have a compelling price/value
proposition? Does your brand reflect the market share? What’s unique about your
brand?

pg. 15
Revenue Model (Monetization –Sector 1)
Margins

How much of your own money are you contributing towards the business?
How much money will you need up-front?
Where will you obtain these funds?
What portion will you be seeking from other sources?
What do your gross margins look like?
Are your margins high or low?
How much capital did you invest in the business?
Where will you obtain funding?
Are you profitable?
What portion will you be seeking from loans, investors, business partners, friends or
relatives, venture capital or government funding?
Do you sell on credit? If so, do you really need to?
Is it customary in your industry and expected by your clientele?
Do you carefully monitor your payables (what you owe to vendors) to take advantage of
discounts and to keep your credit rating good?
What are your payment and customer credit policies?
Briefly outline how much profit you intend on making in a particular timeframe.

pg. 16
How much invest in startup business?

• Estimate your one-time startup costs

Come up with a list of things you’ll need that will be one-time hits. For example, will
you need office furniture? What kind of supplies or equipment do you need?

• Estimate your working capital

You’ll need to figure out how much money it takes to keep the business running.
From rent to utilities, what kind of money will you need to pay your monthly
expenses? You’ll want to come up with a line item list of things you’ll need to pay
for, like payroll, taxes, cell phone bills, rent, utilities, and money to market your
business.

• Figure out a six-month cushion

Let’s not forget that you have bills of your own to pay. Yes, you need money to
keep the business afloat, but you’ll be dedicating a lot of time to your new business
and revenue will likely start off slow.

• Add forgotten fees

There are a lot of fees that entrepreneurs don’t think about. One of the “hidden
fees” Olson forgot about was networking costs. As a consultant, she needed to join
associations and groups to start meeting people and find clients. That’s just one of
many fees that could come your way. Here’s a quick list of fees that many
entrepreneurs overlook:

a. Closing costs: If you’re getting a loan, remember to factor in closing costs.

b. Legal fees: Whether you hire a lawyer to draw up LLC paperwork or consult
with an attorney to hire employees, legal fees can add up.

c. Bank set up fees: Some bank accounts come with fees or balance minimums.

d. Accounting fees: Whether you consult with an accountant to set up payroll or

purchase accounting software like QuickBooks or Xero, you’ll want to factor
in the cost.

• Add a little extra for the unexpected

At some point during the launch of your business, you’ll think of a fee or an expense
that you didn’t plan for. Or, you might get a few months in and something
unexpected happens like a water pipe breaks.

pg. 17
Here are the five most common sources of short-term working capital
financing:

1. Equity. If your business is in its first year of operation and has not yet become
profitable, then you might have to rely on equity funds for short-term working
capital needs. These funds might be injected from your own personal
resources or from a family member, a friend or a third-party investor.

2. Trade creditors. If you have a particularly good relationship established with

your trade creditors, you might be able to solicit their help in providing short-
term working capital. If you have paid on time in the past, a trade creditor
may be willing to extend terms to enable you to meet a big order. For
instance, if you receive a big order that you can fulfill, ship out and collect in
60 days, you could obtain 60-day terms from your supplier if 30-day terms are
normally given. The trade creditor will want proof of the order and may want
to file a lien on it as security, but if it enables you to proceed, that should not
be a problem.

3. Factoring. Factoring is another resource for short-term working capital

financing. Once you have filled an order, a factoring company buys your
account receivable (accounts receivable is the balance of money due to a
firm for goods or services delivered or used but not yet paid for by customers)
and then handles the collection. This type of financing is more expensive than
conventional bank financing but is often used by new businesses.

4. Line of credit. Lines of credit are not often given by banks to new businesses.
However, if your new business is well-capitalized by equity and you have
good collateral, your business might qualify for one. A line of credit allows you
to borrow funds for short-term needs when they arise. The funds are repaid
once you collect the accounts receivable that resulted from the short-term
sales peak. Lines of credit typically are made for one year at a time and are
expected to be paid off for 30 to 60 consecutive days sometime during the
year to ensure that the funds are used for short-term needs only.

In addition to analyzing the average number of days it takes to make a product

(inventory days) and collect on an account (accounts receivable days) vs. the
number of days financed by accounts payable, the operating cycle analysis
provides one other important analysis.

You can see that working capital has a direct impact on cash flow in a business.
Since cash flow is the name of the game for all business owners, a good
understanding of working capital is imperative to making any venture successful.

pg. 18
pg. 19
Cost Advantage

You could also list your main financial management goals such as cost reduction
targets. Do you have superior purchasing power ability? Who are your vendors and
suppliers? What are your distribution channels? Are supply costs steady or
fluctuating? If fluctuating, how do you deal with changing costs? Should you be
searching out new sources of supply, or are you satisfied with present suppliers? How
important is price as a competitive factor?

pg. 20
Financials

How fast is the business expected to grow? What are you financial projections?
What’s your growth rate? What are your financial objectives?
Note: Numbers here should match your market numbers. Supply the important
metrics.

• List your key financial objectives. These can be in the form of profit targets or
sales
• targets (can be placed under the sales model).
• Prepare you balance sheet and financials (Appendix)
• Use a forecast spreadsheet to prepare a month-by-month projection
(Appendix)
• Prepare your Break-Even Analysis (Appendix)

pg. 21
Sales Model (Monetization – Sector 2)
Sales Forecast
What is your pricing strategy? Compare your prices with those of your competition.
Are they higher, lower, the same? Why? What are the main driving forces behind
the sales forecast?
Who makes up your sales team? What sales techniques will they use? Can you
flowchart your sales process? Can you predict future sales’ accurately? How
talented & skilled is your sales team?

5 common pricing strategies

Pricing a product is one of the most important aspects of your marketing
strategy. Generally, pricing strategies include the following five strategies.
1. Cost-plus pricing—simply calculating your costs and adding a mark-
up
2. Competitive pricing—setting a price based on what the competition
charges
3. Value-based pricing—setting a price based on how much the
customer believes what you’re selling is worth
4. Price skimming—setting a high price and lowering it as the market
evolves
5. Penetration pricing—setting a low price to enter a competitive
market and raising it later

pg. 22
pg. 23
pg. 24
Sustainable Competitive Advantage (Sustainability – Sector 1)

Do you have a particular pricing strategy? Why have you chosen this
strategy? Is your competitive advantage defined? Do you have
competitive advantage based on differentiation? If so how significant is
this competitive advantage? What is the ability of the business to retain
skilful and talented work force? What factors give you competitive
advantages or disadvantages? Is there significant threat from new
competitive entrants or substitute products & services?

Some factors that determine the competitive advantage of a business

such as:
• Great Location
• Leveraging a unique IP or process or copyright, or patent or
technological “knowhow”
• Brand Loyalty
• Unique Products or Services
• Leveraging Key Relationships
• High Quality at lowest price products/service
• Financial Advantage

pg. 25
Gaining Competitive Advantage

Competitive advantage denotes a firm’s ability to achieve

market and financial superiority over its competitors.

Creating competitive advantage requires:

1. Understanding customer needs and expectations and

how the value chain can best meet these through
designing and delivering customer benefit packages.

2. Building and leveraging operational capabilities to

support desired competitive priorities.

Competitive Priorities

Competitive priorities represent the strategic emphasis that a

firm place on certain performance measures and operational
capabilities within a value chain.

Key competitive priorities are:

• Cost
• Quality
• Time
• Flexibility
• Innovation

pg. 26
Innovation Factor (Sustainability – Sector 2)

What R&D activities will you implement to encourage innovation in your

business? What financial and/or staff resources will you allocate? Do
you have the ability or need to innovate? How do you compare the
innovation factor of the business to other competitors? How do you
plan to protect your innovations? Do you have confidentiality
agreements in place? What financial and/or staff resources will you
allocate? List any current IP you have registered.

There are four primary types of intellectual property (IP) that can be
legally protected: patents, trademarks, copyrights, and trade secrets

pg. 27
Avoidance of Pitfalls (Sustainability – Sector 3)
Are the pitfalls of the business known or unknown? Do you have
location handicap? Is there a likelihood of changes in government
regulations or policies that may affect the business in the short and long
term? Are you financially savvy? Is the business at risk of litigation?

Identify your potential business risks and the contingency strategies that
you intend to implement to offset each identified risk.

Be on guard against these and other strategic planning pitfalls:

• Moving to the planning stage without an environmental

assessment.
• Developing a plan without senior management involvement.
• Allowing too little or too much time for planning.
• Using the plan simply to reinforce the status quo. Lacking clear
metrics for defining strategic goals.

pg. 28
Graceful Exit (Sustainability – Sector 4)
Do you can exist the business gracefully? Do you have any contingency
plans in place? Is your business easily transferable? Is your business
undervalued?

When you exist from your business:

1. When you lose your interest in your business, your sales will
go down and your profit will deteriorate

2. The moment you feel you are not as jazzed with your
business, start to think about whether you should consider
an exit

3. Always exit at the top of the game, not after your sales
have slid to the bottom

pg. 29
5 steps to follow for a graceful business exit
strategy

Step 1 – Get your accounts and finances in order

An easy transfer is the greatest marketability factor in a business sale
transaction, and this is intrinsically related to its finances.

Clarity in the specifics of your accounts will be both beneficial to you

and to your successor. Keep in mind that most supporting records of at
least two years of reliable financial history should include:
* Detailed list of debtors and creditors
* Stock ownership
* Capital gains information
* Depreciation
* All operating expenses
* Staff and wages details
* Bookkeeping ledgers
* Operating agreements and other documents

Step 2 – Identify your contract status

Purchase prospects have a right to learn about the contracts keeping
the business in operation, but they will also appreciate a frank opinion
of these agreements.

Step 3 – What is the condition of your Intellectual Property?

You will want to make a clear list of all IP used to support the business.
This should also include the licensing model.

pg. 30
Step 4 – Help buyers post-transfer

Are you willing to help this buyer if the sales price is right?

Step 5 – Meet with the employees and vendors

We’ve spent a lot of time talking about technology and processes but
would be remiss to leave out the human factor, which is the most
important “step” on this list. It’s a common courtesy to make the
introductions among all parties involved and let everyone know there’s
a new sheriff riding into town.

A buyer might want to bring in his own team but then again, they might
not.

pg. 31
Operational Overview
In this section, you should describe how you plan to produce your
product or perform your service, including how and where it will be
carried out, your physical space and equipment needs, and your labor
requirements.

Included should be the following information:

Location - Describe the location of the business and the advantages

and disadvantages of the site with respect to labor and material costs
and availability, proximity to customers, access to transportation, state
and local laws (including zoning), and utility costs.

pg. 32
Physical Space and Equipment - Describe the physical facilities in use or
to be acquired (leased, purchased or built) and the costs and timing of
such acquisitions. Estimate future facilities and equipment needs, based
on sales projections, including the cost of additional capacity and its
timing.

Manufacturing Technology
• The right technology must be selected for the goods that are
produced.
• Process resources, such as machines and employees, must be set
up and configured in a logical fashion to support production
efficiency.
• Labor must be trained to operate the equipment.
• Process performance must be continually improved.
• Work must be scheduled to meet shipping commitments/customer
promise dates.
• Quality must be ensured.

Service Technology
• Service technologies are used behind the scenes to facilitate your
experience as a customer.
• E-service refers to using the Internet and technology to provide
services that create and deliver time, place, information,
entertainment, and exchange value to customers and/or support
the sale of goods.

pg. 33
Production Processes - Describe the production processes necessary to
develop your product or provide your service, including: method of
production; procedures for quality, production and inventory control;
raw materials required (including sources, costs, etc.); organization and
control of purchasing; breakdown of fixed production costs; and
breakdown of variable unit costs by product/service.

Characteristics of Different Process Types

pg. 34
Labor - Other than management, describe to what extent the local
labor force is adequate in terms of quality and quantity. If applicable,
discuss the type of training needed and the cost to your company.

Partnerships – Give any crucial partnerships required to make this a

reality – suppliers, distributors, out-sourced operations, organisations that
can give access to resources or markets and /or funding.

pg. 35
pg. 36
Appendix
Organizational Chart
[Outline your business structure in the chart below.]

Figure 1: Organization Chart. [Complete this chart or include your own.]

Figure 1: Organization Chart. [Complete this chart or include your own.]

Products/Services
[Provide a list of your product and services as well as future derivatives for your product/services
in the parallel- vertical and/or horizontal niches found during Customer Discovery of your beach
head – shows understanding of scale and potential for future sustainability]

(Supply any future products based on findings in customer discovery of parallel niches)

pg. 37
STRATEGIC - SITUATIONAL ANALYSIS
[Using your external Environment Analysis – PEST & Porter’s 5 Forces. Now List each of
your opportunities or threats in the table below, Now List your Business Strengths &
Weaknesses. Outline how you plan to address each of the weaknesses/threats. ]

Competitors
[How do you rate against your competitors? How can your business improve on what they
offer?]

Unfair Advantage Positioning

[How do you align to your customers better than your competition – use the strategy canvas
developed from your Blue Ocean Strategy – Eliminate, Reduce Pains and Raise & Create
Gains – to display this.]

pg. 38
Sales & Distribution Channels

Sales Funnel:
[Show your sales funnel, indicate understanding of your churn and actual customers.
Give your strategy and assumptions of how to get paying customers to pass through your POS. Can
utilize template provided.]

Risk Analysis
[List the potential risks in the Following Table (in order of likelihood) that could impact your
business.]

pg. 39
Financials
[Using the templates supplied from NAB Small Business Centre supply following:
Start-up Costs Table
Sales Forecast (12 months)
Projected Cash Flow (12 months)
Projected Profit & Loss (12 months)
Projected Balance Sheet (12 Months)
Projected Cash Flow 3yrs
Projected Profit & Loss 3yrs
Project Balance Sheet 3yrs

Break-even
Various Ratios.]

pg. 40
Supporting Documentation
Attach any other supporting documentation in relation to this business model plan template.
The attached documents
include:

Minimum Delightful Product:
[Provide your MDP Brochure – a detailed description, schematic and specifications of your
Product/Service. Express the benefits and features in detail]

Customer Definition:
[Provide your Customer Profile; Customer Empathy Canvas and Value Proposition Canvas]

Lean Canvas and Business Model Canvas
[Provide your LC and MBC – a detailed description and explanations as well as any
currently unproven assumptions.]

Supporting Strategy Information.
[These should include your PEST, Porters Five Forces, etc.]

List all other attachments here.
[These should include resumes, inventory list, survey/questionnaire and/or any other
marketing, sales and/or financial related documents.]

pg. 41