Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan

   

Just as no two businesses are alike, so also with business plans. As
some issues in a plan will be more relevant to some businesses than to
others, it is important to tailor a plan’s contents to suit individual
circumstances. Nonetheless, most plans follow a well-tried and tested
structure and general advice on preparing a plan is universally applicable.

A business plan should be a realistic view of the expectations and long-term
objectives for an established business or new venture. It provides the
framework within which it must operate and, ultimately, succeed or fail.
For management or entrepreneurs seeking external support, the plan is
the most important sales document that they are ever likely to produce
as it could be the key to raising finance etc. Preparation of a comprehensive
plan will not guarantee success in raising funds or mobilizing support,
but lack of a sound plan will, almost certainly, ensure failure.

Importance of the Business Planning Process

Preparing a satisfactory business plan is a painful but essential exercise.
The planning process forces managers or entrepreneurs to understand more
clearly what they want to achieve, and how and when they can do it. Even
if no external support is needed, a business plan can play a vital role
in helping to avoid mistakes or recognize hidden opportunities. It is
much easier to fold a sheet of paper than a business.

For many, many entrepreneurs and planners, the process of planning (thinking,
discussing, researching and analyzing) is just as, or even more, useful
than the final plan. So, even if you don’t need a formal plan, think carefully
about going through the planning process. It could be enormously beneficial
to your business.

Anticipate many weeks of hard work and several drafts of the emerging
plan to get the job right. A clearly written and attractively packaged
business plan will make it easier to interest possible supporters, investors
etc. A well-prepared business plan will demonstrate that the managers
or entrepreneurs know the business and that they have thought through
its development in terms of products, management, finances, and most importantly,
markets and competition.

For more guidance on these matters, check the white paper offering
Insights into Business Planning, the Checklist
for Preparing a Business Plan
, Free-Plan
(free 150-page Business Plan Guide and Template in
Word format) and the comprehensive Business
Plan Guide
.

If you are developing, or have invented, a new product or service, it
may be beneficial to start the business planning process by reviewing
the sections of Getting New Business Ideas covering
Assessing Ideas and Next Steps. This will guide you on groundwork
to be done before starting to write a comprehensive plan.

In the following sections, we discuss the preparation of a strategic
plan and present ideas for preparing the outline of a business plan and
writing up the detail.

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2. Start with a Business Strategy

A short strategic plan (2-3 pages) can provide a very useful foundation
on which to base a much more detailed and comprehensive business plan.
If you don’t have a sensible strategic plan, how can you realistically
write a sensible business plan?
Use a short strategic plan as the
foundation for a more comprehensive business plan.

As the prelude to developing a strategic plan, it is desirable to clearly
identify the current status, objectives and strategies of an existing
business or the latest thinking in respect of a new venture. Correctly
defined, these can be used as the basis for a critical examination to
probe existing or perceived strengths, weaknesses, threats
and opportunities. This then leads to strategy development covering
the following issues which are discussed in more detail immediately below:

  • Vision
  • Mission
  • Objectives
  • Values
  • Strategies
  • Goals
  • Programs

Vision

The first step is to develop a realistic Vision for the business.
This should be presented as a pen picture of the business in three
or more years time in terms of its likely physical appearance, size,
activities etc. Answer the question: “if someone from Mars visited
the business, what would they see or sense?”

Mission

The nature of a business is often expressed in terms of its Mission
which indicates the purposes of the business, for example, “to design,
develop, manufacture and market specific product lines for sale on
the basis of certain features to meet the identified needs of specified
customer groups via certain distribution channels in particular geographic
areas”. A statement along these lines indicates what the business
is about and is infinitely clearer than saying, for instance, “we’re
in electronics” or worse still, “we are in business to make money”
(assuming that the business is not a mint !). Also, some people confuse
mission statements with value statements (see below) – the former
should be very hard-nosed while the latter can deal with ‘softer’
issues surrounding the business.

Objectives

The third key element is to explicitly state the business’s Objectives
in terms of the results it needs/wants to achieve in the medium/long
term. Aside from presumably indicating a necessity to achieve regular
profits (expressed as return on shareholders’ funds), objectives should
relate to the expectations and requirements of all the major stakeholders,
including employees, and should reflect the underlying reasons for
running the business.

Values

The next element is to address the Values governing the operation
of the business and its conduct or relationships with society, customers,
employees etc.

Strategies

Next are the Strategies – the rules and guidelines by which
the mission, objectives etc. may be achieved. They can cover the business
as a whole including such matters as diversification, organic growth,
or acquisition plans, or they can relate to primary matters in key
functional areas, for example:

    • The company’s internal cash flow will fund all future growth.
    • New products will progressively replace existing ones over
      the next 3 years.
    • All assembly work will be contracted out to lower the company’s
      break-even point.

Goals

Next are Goals. These are specific interim or ultimate time-based
measurements to be achieved by implementing strategies in pursuit
of the company’s objectives, for example, to achieve sales of $3m
in three years time.

Programs

The final elements are the Programs which set out the implementation
plans for the key strategies.

It goes without saying that the mission, objectives, values, strategies
and goals must be inter-linked and consistent with each other. This is
much easier said than done because many businesses which are set up with
the clear objective of making their owners wealthy often lack strategies,
realistic goals or concise missions.

For more information on strategic planning, refer to other papers in
this series entitled Developing a Strategic Business Plan
(and its accompanying worksheet) and Devising Business Strategies, and consider utilizing the free Online
Strategic Planner
. See also a sample
strategic plan
– you may wish to print it for reference purposes.


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3. Before Writing the Business
Plan

This section deals with preparatory issues, structure & content,
and length & time scale for the preparation of a detailed plan.

Preparatory Business Planning Issues

Before any detailed work commences on writing a comprehensive business
plan, you should:

  • Clearly define the target audience
  • Determine its requirements in relation to the contents and levels
    of detail
  • Map out the plan’s structure (contents page)
  • Decide on the likely length of the plan
  • Identify all the main issues to be addressed.

Shortcomings in the concept and gaps in supporting evidence and proposals
need to be clearly identified. This will facilitate an assessment of research
to be undertaken before any drafting commences. Bear in mind that
a business plan should be the end result of a careful and extensive research
and development project which must be completed before any serious writing
of a plan should be started. Under no circumstances should you start writing
a plan before all the key issues have been crystallized and addressed.

To get started, use the outline below to prepare the
basis for your plan. Bear in mind that if a credible and acceptable outline
plan cannot be compiled then it is highly improbable that a more comprehensive
plan can be prepared.

Take a moment to complete or view the results of these surveys:

Survey
about Strengths & Weaknesses of Businesses
Survey
about Writing a Business Plan

For further practical guidance on these matters, review the following:

      1. White paper offering Insights into Business
        Planning
        .
      2. Checklist for Preparing a Business
        Plan
        .
      3. Free-Plan – business plan template &
        guidelines (Word format).
      4. Comprehensive Business Plan Guide.

Structure & Content of a Business Plan

A typical business plan comprises the following main elements:

  1. Brief Introduction setting out the background and structure
    of the plan.
  2. Summary of a few pages which highlights the main issues and
    proposals.
  3. Main Body containing chapters broken into numbered sections
    and subsections.
  4. Appendices containing tables, detailed information, exhibits,
    etc. referred to in the text.

The outline presented below in conjunction with the
comprehensive Business Plan Guide could serve
as the basis for a detailed business plan.

Length & Time-scale for Business Planning

Whilst the sheer length of a business plan may bear no relation to the
underlying prospects of a business, it is likely that a well-developed
plan would be at least twenty pages long plus appendices.

The elapsed time needed to produce a detailed plan might be between twenty
and one hundred days. This would be determined not only by the complexity
and scale of the venture, but also by the scale and maturity of the business
and relevant experience and skills of the management team. Whilst the
task of writing the plan itself may only take a relatively short time,
be sure to allocate enough time to the research, preparatory work and
the underlying thinking and discussion.

For more guidance on the length of a plan and the time-scale involved,
have a look at Insights into Business Planning.

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4. Planning the Business Plan

Develop an Outline Business Plan

Start by defining an outline (i.e. a table of contents)
of your plan. This will allow you to to concentrate on the essentials
of planning the business rather than becoming too absorbed in the detailed
drafting of your plan. It will allow you to see the wood from the trees.

Having devised the basic outline for your business plan, the next task
is to expand this to include subheadings and appendix titles (see the
Business Plan Guide for detailed suggestions).
This extended structure should be critically reviewed to ensure that all
the salient elements of the plan are included and that it has a logical
flow. This approach should also ensure that the plan has an appropriate
levels of detail and is correctly targeted at its audience – investors,
directors/shareholders, financial institutions etc. For example, a structure
which is mainly devoted to detailed technical descriptions of products
would be completely unsuited to a plan being used to raise bank finance.

Prepare a Business Planning Work Program

Once the plan’s structure has been defined, it can be used as a checklist
and basis for a work program and timetable to complete the plan. This
work program will often entail extensive research and thought prior to
the commencement of writing. For example, formal market research may be
needed before sales volumes and prices can be determined. Another example:
professional advice may be required to assess capital expenditures in
relation to the acquisition of premises and so on.

The work program could correspond to key sections of the proposed plan
and could include timetables, resource allocations and cost estimates
as indicated in the following chart:

Section
of Plan
Researched
by
Written
by
Elapsed
time (weeks)
Cost
($)
Priority Key
Actions
             
             
             
             
             


Further Suggestions for Business Planning

Some additional tips and suggestions:

  • Be absolutely clear about the primary purpose and audience of the
    plan from the outset. If the plan has to serve multiple purposes, consider
    producing tailored versions (or tailored summaries).
  • Allow enough time to produce revised drafts of the plan – three/five
    drafts would not be unusual.
  • Write the Introduction, Summary and Conclusion of the plan only after
    the plan’s main parts have been finalized.
  • At an early stage, make some high-level sales and financial projections
    (covering 1-3 years) to explore the general direction and size of the
    business, likely viability and possible funding amounts and mix. For
    this purpose, consider using the Quik-Plan facility within Exl-Plan,
    our range of financial planners for use with Excel.
  • If the elapsed time needed to prepare the plan and commence its execution
    is lengthy, set the start date for financial projection close to the
    commencement of execution. For example, if you begin preparing a plan
    in January and hope to raise startup finance by October, the start date
    for projections might be set to September. Any expenses incurred before
    this date could be rolled up into the opening balance sheet for the
    projections.
  • Seek external assistance sooner rather than later. This may take the
    form of software tools, consultancy assistance in the form of specific
    assignments, or mentoring and counseling on an as required basis.
  • If planning a significant business, ensure that a management team
    has been identified (and possibly in place) before the plan is finalized.
  • Identify and cultivate possible key recipients of the plan during
    the plan’s preparation. This will ensure that when the plan is finally
    presented, these contacts will have some prior knowledge of its contents
    and the promoters and, where appropriate, the views of contacts may
    have been taken into account during the preparation process.
  • Start compiling the plan at the sections devoted to market research/analysis
    and sales forecasts/plans, or with details of the proposed product/service
    offerings. Leave the detailed financial projections aside until all
    details in relation to sales, costs, expenses, operations, capital investment
    and possible sources/types of finance have been resolved

For further help, check out:

 


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5. Outline the
Business Plan

The next section presents an outline structure for a
business plan. Feel free to change this outline to suit your project and
its state of development. It can be readily expanded to become a ‘full-blown’
business plan by extending the level of detail as explained in the Business
Plan Guide
.

Note: A free 150-page Business
Plan Guide
and Template (Word
format) incorporating a similar outline structure and additional
detail is available for downloading here.

The suggested page lengths for a comprehensive plan are given in parenthesis
after each section’s heading within the outline. A small,
straightforward business should work within the minimum
page lengths whereas a large, complex business seeking a substantial external
investment might hit the maximum page lengths. Note the
importance of marketing and sales in terms of the suggested number of
pages for these sections. For more guidance on the length of business
plans, have a look at Insights into Business Planning.

Avoid going into too much detail within the plan’s body by placing detailed
or supplementary material in accompanying appendices. Bear in mind that
most investors, bankers etc. dislike having to read overlong business
plans just as much as entrepreneurs and managers dislike writing the plans
in the first instance!

Work on the assumption that whoever reads your plan will be completely
unfamiliar with your business or project and will be seeking answers to
relatively basic questions and key issues, for example, what will the
business do, will it make money etc.

For further information on business planning issues, refer to other papers
in this series which cover insights into business
planning
, financial planning, cashflow
forecasting
, strategic planning, devising business strategies and managing working capital.
Finally, you should review the contents of the Business Plan
Guide
.

Note that a free Business
Plan Template
for Word (48 pages) and a complementary Guide (supplied
as a 90+ topic Help file and as a 100+ page PDF file for printing) incorporating
this outline structure and additional detail is available for downloading here.

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6. Business Plan Outline

Use the outline below as the “road map” for your plan and then
write up each section concisely but comprehensively. Only address matters
of real substance and major significance within the main sections of the
plan.

1. Introduction (1)

Introduce the plan. Explain who wrote it, when and for what purpose.
Give contact details. See 1. Introduction within
the Business Plan Guide for more info.

2. Summary (1-3)

Write last. Present the highlights of the plan. See 2.
Summary
within the Business Plan Guide for
more info.

3. Strategic Overview (1-2)

Present the “big picture”. What are the central purposes and activities
of the planned business? What are its SWOTs? What are its major (long
term) objectives, key strategies and prime goals ? See 3.
Strategic Overview
within the Business Plan
Guide
for more info.

4. Present Status (1-5)

Summarize achievements and performance (financial, sales, technical
etc.) to date. Introduce the stakeholders in the business. See 4.
Present Status
within the Business Plan Guide
for more info.

5. Product/Service Offerings (1-3)

Keep descriptions short and confine them to broad groups. Explain briefly
what makes them special. See 5. Product / Service
Offerings
within the Business Plan Guide
for more info.

6. Profiles of Target Markets (3-6)

Size, segments, trends, competition and user/customer profiles. See
6. Profiles of Targets Markets within the
Business Plan Guide for more info.

7. Marketing Strategies, Sales Plans &
Projections (3-6)

How will the business market its products/services and sell to customers?
What sales will be achieved in its main markets? How will it deal with
competitors ? Indicate costs. See 7. Marketing
Strategies, Sales Plans & Projections
within the Business
Plan Guide
for more info.

8. Technology and R&D (0-2)

If relevant, explain progress, plans, resources and highlight any technological
advances. See 8. Technology and R&D within
the Business Plan Guide for more info.

9. Operational/Manufacturing Plans (2-5)

Cover distribution & service activities and/or manufacturing. Highlight
major elements only. Indicate organization, resources, costings etc.
See 9. Operational / Manufacturing Plans
within the Business Plan Guide for more info.

10. Management & Administration (2-3)

Introduce the proposed management team, structure etc. Indicate administrative
arrangements and specify overhead costs. See 10.
Management & Administration
within the Business
Plan Guide
for more info.

11. Financial Projections (4-8)

Use simple tables to present key financial projections e.g. summary
P&L, cashflows, balance sheets and key ratios. Place the detailed
analyses in appendices. See 11. Financial
Projections
within the Business Plan Guide
for more info.

For more help, download a trial version of our financial planners
– Exl-Plan (for Excel) – and review its
annual output reports and Textual Summary Report.

12. Funding Requirements & Proposals
(0-2)

If applicable, summarize funding requirements, possible sources, likely
terms, and, for investors, the projected return on their investment.
Be realistic!! See 12. Funding Requirements &
Proposals
within the Business Plan Guide
for more info.

13. Implementation (1-3)

Explain the major decision points, time scale and actions required
by management and others to progress the plan. See 13.
Implementation
within the Business Plan Guide
for more info.

14. Conclusion (1)

Indicate why the business will succeed and why it should be supported.
See 14. Conclusion within the Business
Plan Guide
for more info.

Appendices

Use appendices at the very back of the plan to present important background
data and detailed plans. This will avoid disrupting the flow of the
plan or cluttering it with excessive detail. See Appendices
within the Business Plan Guide for more info.

For further information on business planning issues, refer to other
papers in this series which cover insights into
business planning
, financial planning, cashflow
forecasting
, strategic planning, devising business strategies and managing working capital.
Finally, you should review the contents of the Business Plan
Guide
.

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  • More free tools here.

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7. Writing the Business
Plan

The following suggestions may be of assistance when drafting the plan:

  1. Build the detailed business plan on a carefully considered outline
    (table of contents) – see the business plan outline above.
  2. The most important and difficult sections to prepare relate to marketing
    and sales as these can make or break not only the business plan but
    also the business itself !
  3. Support market and sales projections by market research. Ensure
    that there is a direct relationship between market analysis, sales
    forecasts and financial projections. Assess competitors’ positions
    and possible responses realistically.
  4. Be realistic about sales expectations, profit margins and funding
    requirements. Ensure that financial ratios are in line with industry
    norms. Do not underestimate the cost and time required for product
    development, market entry, securing external support or raising finance.
    Consider the possibility of the double-double-half rule – double the cost or time required or halve the
    sales projections.
  5. Restrict the level of detail on product specifications and technical
    issues.
  6. The financial projections are likely to be straightforward but decide
    on a sensible level of detail as regards the time horizon etc. Consider
    using a personal computer and a financial modeling package for the
    projections.
    • See our range of financial planners – Exl-Plan
      (for Excel) – which can be downloaded from here.
    • For further specific information on financial planning for businesses,
      refer to the page entitled Preparing Financial
      Projections
      accessible from the PlanWare site.

  • If looking for external equity, be realistic about the value of
    the business, risks involved and possible returns, and be sure to
    indicate possible exit mechanisms. Put yourself in the shoes of an
    investor and remember the golden rulehe who has the gold
    makes all the rules
    .
  • The management section of the plan is of crucial – experience, balance,
    ability and commitment. If a new venture is involved, then management
    is likely to be its only real asset. Consider formation of a management
    team or strengthening management as part of the plan. Remember the
    five ingredients of a successful business are management, management,
    management, market and product (in that order,
    and not in the reverse order as some inventors and entrepreneurs
    might like to think).
  • Be positive but realistic about the business’s prospects and explicitly
    recognize and respond honestly to shortcomings and risks.
  • When writing the plan:
    • avoid unnecessary jargon
    • economize on words
    • use short crisp sentences and bullet points
    • check spellings
    • concentrate on relevant and significant issues
    • break the text into numbered paragraphs, sections etc.
    • relegate detail to appendices
    • provide a contents page and number pages
    • write the summary last.

  • Get a qualified outsider to review your plan in draft form and be
    prepared to adjust the plan in the light of comments secured and experiences
    gained.
  • External help and guidance in preparing a business plan can be extremely
    valuable. If outside help is used, make sure that the resultant plan
    remains your own and not that of your advisers.
  • If presenting the plan to outsiders, attach appendices and number
    pages. Add a contents page and bind it within attractive covers.

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    All versions of Exl-Plan include a free 150-page
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