Business Plan Outline

Is your company Business Plan on a long to-do list, but you never seem to get to it, or get to regularly updating the one you have, because it seems like such an overwhelming project? You may not want to hear this, but I am here to tell you that Business Plans are not optional. You must have one, and it must be up-to-date. Some people apparently believe that once the Business Plan is written it is forever carved in stone, because they fail to change the plan as their circumstances and direction change.

The Business Plan is meant to be a sound, carefully conceived outline of the way you intend to develop and run your business. The Business Plan is an excellent tool to help track your achievements and see what remains to be done. It helps you move toward your short- and long-range goals. A Business Plan defines your business, its products, markets and financial aspects, today and into the future. It introduces the management team, detailing their backgrounds and responsibilities. It is an essential sales and marketing tool for any business. When raising capital, the Business Plan serves as a fundable proposal to help you attract financial commitments. The Business Plan also demonstrates your leadership abilities. 

The Courtship

Wooing bankers, brokers, venture capitalists and others to “know you and love you” can be likened to a romantic courtship. In both cases, when things begin to get serious everybody wants a clear, defined vision of a possible future together before either party commits to a permanent arrangement. Without that clarity either party may suffer pain, disappointment and significant financial loss. That is where the Business Plan comes in.

If you do not want to write the plan yourself and feel that a professional can do it better, hire a professional writer. Whether you keep it in-house or outsource, you should assemble an internal team to coordinate the project. If your company has multiple divisions, make each division head responsible for formulating and expressing his or her vision, in writing. When it’s assembled, you, as the head honcho, can determine whether everyone is on the same page.

There are plenty of excellent reference guides with sample Business Plans that separate the project into manageable steps. I most highly recommend the following: 

The Complete Book of Business Plans: Simple Steps to Writing a Powerful Business Plan, by Joseph A. Covello and Brian J. Hazelgren (Naperville, IL: Small Business Sourcebooks, Inc., 1994). The Successful Business Plan: Secrets & Strategies, by Rhonda M. Abrams and Eugene Kleiner (Grants Pass, OR: Oasis Press, 1997).

The most important thing to remember when writing your Business Plan is this formula: Quality not Quantity. I’ve seen excellent plans that were only 20 pages, but those pages sure packed a punch. I’ve also seen overstuffed plans that took up 200 pages and never got to the point! Much will depend on the nature of your business. If you have a simple concept, you may be able to explain it simply and easily. Proposing a new kind of business or industry will most likely require a more extensive, detailed explanation. The length of your Business Plan will also be determined by its purpose. The days of getting $20 million for a dot-com business idea scribbled out on the back of an envelope are long gone, and well they should be. 

If you are seeking millions of dollars in replenishment capital, and there is any possibility that a potential investor, reading your plan, might consider the investment in any way risky (even if you think you’re offering a “sure bet”), write out your plan carefully and thoroughly. Make sure you convincingly address legitimate concerns about potential risks.

 

The Three Main Parts of the Business Plan 

To be properly assembled, the Business Plan must include these three primary parts:

  1. The Business Concept: a discussion of your industry, business structure, particular product or service, and plan for ensuring your company’s success.
  2. The Marketplace Section: a description and analysis of potential customers — who and where they are, what makes them buy, and so forth; and a discussion of the competition and how you are prepared to surpass them.
  3. The Financial Section: an assessment that includes income and cash flow statements, balance sheets and other financial ratios, such as break-even analyses.
 

 Outline for a Business Plan

 I Cover Sheet
  • Company name, address, telephone numbers and contact persons
  • Company description and overview
  • Amount of capital required

II Table of Contents


III Executive Summary
  • Company mission
  • Unique selling advantages
  • Projections for the future
  • Capital needs

IV Context of Your Business — The “Big Picture”

  • Growth potential
  • New products and developments — what will make your product more attractive to the public
  • Economic trends — evidence that spending is favorable to the industry
  • Industry outlook and trends — the future of the industry according to industry experts, leaders, economists, government forecasters and other authoritative spokespersons
 
V Profile of Your Business
  • Nature of your business
  • Brief history of how the products and services were developed
  • Economic trends, and how are they favorable for the industry
  • Organizational details — legal structure, personnel resources and operational patterns
  •  Factors influencing the business (i.e., dependence on special vendors or suppliers)
  •  Patterns for research and development
  •  Test-marketing procedures, if any
  •  Results achieved
  •  Product development
  •  Legal controls of process or products
  •  Contracts and agreements (in some cases, copies of contracts should be included)
  •  Operational procedures
  •  Space requirements
  •  Purchasing procedures and plans
  •  Inventory systems
  •  Staff and equipment requirements
  •  Special training required
 

VI Profile of Your Specific Market

  • Intended consumers of the products or services
  • Geographical scope of the market, including size and populations
  • Growth potential of the market
  • Ability to satisfy demands of the market
  • Techniques for attracting new customers while retaining old ones
 

VII Anticipated Challenges (S.W.O.T. Analysis —Strengths, Weaknesses, Obstacles, Threats)

  • The competition — their strengths and weaknesses, as well as your advantages and strengths
  •  Your weak areas, and how you will compensate for them
  •  Legal Factors — required licenses, restrictions, regulations and future litigation in government policies
  •  Protection issues, patents, trademarks, and how trade secrets will be preserved.
  •  Key personnel: depth of the management, and plans for replacing or recruiting key people
 

VII Marketing Plan

  • Publicity, advertising, merchandising and market research
  • IR and PR plans
  • Pricing issues
 

IX Financial Projections

  • Profit & Loss Statement
  • Balance Sheet
  • Cash Flow Statement
 
X Implementation Schedule
  • When the financing will be needed
  • Main steps of the marketing campaign undertaken to-date
  • Dates to fulfill obligations of sales
 
XI Statement of Resource Needs
  •  How much is needed, cash-flow projections, and how the money will be used
 
XII Appendix
  • Assumptions
  • Supporting documents
  • Articles, special reports, etc.
  • Biographies
    •  Graphs and Charts
    • Copies of agreements and contracts
    • Glossary of terms
    • References, such as lenders, creditors, bankers, suppliers and trade creditors
  

Business Plans as Works in Progress

As I noted at the beginning of this article, Business Plans are fluid. It is time to update your plan if any of the following has occurred in your business model:
  • A new financial period is about to begin. If your industry is fast-changing, update your plan annually, quarterly or even monthly.
  • You need to raise money. Your targeted lenders and private investors will require an updated plan from you in order to make their financing decisions.
  • A significant change in your related market has occurred. Shifting client tastes, consolidation trends among customers, and altered regulatory climates can trigger the need for Business Plan updates.
  • Your firm develops or is about to develop a new product, technology, service or skill.
  • A change in management has been instituted. New managers should get fresh information about your business and your goals.
  • Your company has achieved a significant milestone, such as opening new offices, crossing a sales mark, or hitting new levels of employees.

If your business has changed significantly for any reason since you wrote your original plan, it’s time for an update. If your current plan no longer reflects reality, change it, correct it, and if necessary, completely rewrite it. Perhaps you did a poor job the first time. Perhaps events have progressed more rapidly than expected — a positive development that may leave you in need of additional funding. As frequently happens, the business you have today is drastically changed and no longer possesses any of its original fundamental characteristics. If this is the case, you should not hesitate to redo your Business Plan quickly and effectively.

If you would like more information on this topic, or a copy of one of Dian's books, contact us.

About the Author

Dian Griesel, Ph.D.
Founder and CEO of The Investor Relations Group
Author, Entrepreneur, PR & IR Expert

Dian has over 30 years of business experience from owning and growing companies in the health, marketing, investor and public relations, professional writing and sponsorship sectors. In addition to being the Founder and CEO of The Investor Relations Group, she's also the Dean of The Business School of Happiness. You can contact her via Twitter, Facebook, and/or by email.