Business Plan and Its

Elements
Based on Balderson et al Canadian Entrepreneurship and Small Business
Management McGraw-Hill 11ed.
Added and adapted by Andrei Ribalkin
Business Plan
• A business plan is a written document that describes in detail how a
business—usually a startup—defines its objectives and how it is to go
about achieving its goals.
• A business plan lays out a written roadmap for the firm from
marketing, financial, and operational standpoints.
• https://www.investopedia.com/terms/b/business-plan.asp

• Two main purposes: internal and external

© 2020 McGraw-Hill Education Limited 2

The Small Business Plan   
Role
• Entrepreneurs must develop business plans with which to
raise funds and to organize long- and short- term goals.
• Internally, the business plan serves as a blueprint (e.g.,
assess performance over time).
• Externally, the business plan is scrutinized by lenders and
investors prior to funding (e.g., collateral, cash flow).

Approach (how?)
• Update business plans to reflect changing market conditions.
• The format and emphasis vary depending on the purpose

© 2020 McGraw-Hill Education Limited 3

Components of the Business Plan        
1. Table of Contents
• Enables quick access to various parts
2. Executive Summary and Background
• Provides a synopsis of highlights, addresses key issues of
interest to readers, generates interest
3. Description of the Management Team
• Provides background of entrepreneur and management team,
and their relevant experience
4. Business Objectives
• Articulates firm’s mission and vision statements and its values
• States quantitative objectives for first and following years

© 2020 McGraw-Hill Education Limited 4

Components of the Business Plan cont. 
5. Marketing
• Describes target market (needs, wants, demographic
information, buying habits, cultural norms).
• States market potential, market share, industry analysis,
growth trends, competitor analysis, technological factors.
• Provides information on marketing mix.
6. Operations
• Describes process, equipment, supplies, output, quality,
location area, physical facilities (site costs, restrictions,
accessibility, proximity to other businesses, buy-or-lease
decision, lease costs and terms, leasehold improvements,
insurance, etc.)

© 2020 McGraw-Hill Education Limited 5

Components of the Business Plan cont.     
7. Finance
• Describe capital requirements, feasibility projections (pro
forma income statements, cash flow projections)
• State sources and types of funding, proposed collateral for
debt and/or ROI for equity
• Provide information on accounting and bookkeeping systems
• Include financial evaluation measures (e.g., comparison to
industry benchmarks)
8. Personnel
• Discuss administrative structure, personnel policies, employee
recruitment and training

© 2020 McGraw-Hill Education Limited 6

Components of the Business Plan cont.     
9. Legal Requirements
• Describe legal structure of the firm.
• Discuss requirements for licenses, permits, taxes
• Provide information about intellectual property protection
10. Risk Assessment
• Discuss contingency plans if business risks materialize (e.g.,
competitor reaction, loss of key customer or supplier, change
in government policy, etc.)
• Discuss contingency plans if industry risks occur (e.g.,
Porter’s Five Forces)

© 2020 McGraw-Hill Education Limited 7

Business Plan Guideline
• Develop the previous idea into the Business Plan (BP)
• Meet the requirements
• Review and correct previous information
• Use the formal report format
• Upload 3 written documents on turnitin.com and make a life video
presentation in class
BP1
• BP objectives vs. business objectives
• Business description
• Ownership/management team
• Legal issues
• Risk assessment and management
• Marketing
Ownership/Management Team
• Description of the team, Member Resources, Responsibilities (who
will do what), Why will you succeed? Attach owners’ resumes in the
appendix.
BP Guideline
 Risk Assessment and Management Process

• Identify risks
• Analyze
• Manage
• Evaluate and adjust

© 2020 McGraw-Hill Education Limited 11

 Common Risk Management Techniques

• Avoidance
• Acceptance
• Mitigation
• Transfer

© 2020 McGraw-Hill Education Limited 12

Approach to Major Business Functions
• Goals (qualitative & quantitative)
• Processes
• Tools & techniques
• Resources required
• Expected results