Small Business Center
Design Your Plan to Fit Your Business
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.
- Partnerships
- Corporations
- Sole Proprietorships
- Incorporation Basics
- Naming your Business
- Writing a Business Plan
- Limited
Liability Companies
- Complying with Zoning Laws
- Getting
Licenses and Permits
- Why Form a Nonprofit Corporation?
-
Choosing Between a Corporation and an LLC
- Leases and Rental Agreements: An Overview
