Business planning is about results. For
every business plan, you need to make the contents
of your plan match your purpose. Don't accept a
standard outline just because it's there.
In the United States business market there is a
standardization about business plans. You can find
dozens of books on the subject, about as many Web
sites, two or three serious software products, and
courses in hundreds of business schools, night
schools, and community colleges. Although there are
many variations on the theme, a lot of it still
falls into the same standard.
What is a Business Plan?
A business plan is any plan that works for a
business to look ahead, allocate resources, focus on
key points, and prepare for problems and
opportunities. Business existed long before
computers, spreadsheets, and detailed projections.
So did business plans.
Unfortunately, people think of business plans
first for starting a new business or applying for
business loans. But they are also vital for running
a business, whether or not the business needs new
loans or new investments. Businesses need plans to
optimize growth and development according to
priorities.
What's a Start-up Plan?
A very simple start-up plan includes a summary,
mission statement, keys to success, market analysis,
and break-even analysis. This kind of plan is good
for deciding whether or not to proceed with a plan,
to tell if there is a business worth pursuing, but
it is not enough to run a business with.
Is There a Standard Business Plan?
A normal business plan, one that follows the advice
of business experts, includes a standard set of
elements. Plan formats and outlines vary, of course,
but generally, a plan will include standard
components such as descriptions of the company,
product or service, market, forecasts, management
team, and financial analysis.
Your plan depends on your specific situation. For
example, if you're developing a plan for internal
use only (not for sending out to banks or
investors), you may not need to include all the
background details that you already know.
Description of the management team is very important
for investors, while financial history is most
important for banks. Make your plan match its
purpose.
What's Most Important in a Plan?
It depends on the case, but usually it's the cash
flow analysis and specific implementation details.
- Cash flow is both vital to a company and hard
to follow. Cash is usually misunderstood as
profits, and they are different. Profits don't
guarantee cash in the bank. Lots of profitable
companies go under because of cash flow problems.
It just isn't intuitive.
- Implementation details are what make things
happen. Your brilliant strategies and beautifully
formatted planning documents are just theory
unless you assign responsibilities, with dates and
budgets, follow up with those responsible, and
track results. Business plans are really about
getting results and improving your company.
Can you Suggest a Standard Outline?
If you have the main components, the order doesn't
matter that much, but here's the outline order we
suggest in Business Plan Pro software:
- Executive Summary: Write this last.
It's just a page or two of highlights.
- Company Description: Legal
establishment, history, start-up plans, etc.
- Product or Service: Describe what
you're selling. Focus on customer benefits.
- Market Analysis: You need to know your
market, customer needs, where they are, how to
reach them, etc.
- Strategy and Implementation: Be
specific. Include management responsibilities with
dates and budget.
- Management Team: Include backgrounds of
key members of the team, personnel strategy, and
details.
- Financial Plan: Include profit and
loss, cash flow, balance sheet, break-even
analysis, assumptions, business ratios, etc.
We don't recommend developing the plan in the
same order you present it as a finished document.
For example, although the Executive Summary comes as
the first section of a business plan, we recommend
writing it after everything else is done. It will
appear first, but you write it last.
