Business planning is about results. For every business plan, you need to make the contents of your plans 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 online business degrees, 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 business or applying for business loans / government grants. But they are also vital to start a business, whether or not the business needs new loans or government grants. Businesses need plans to optimize growth and development according to priorities.
What’s a Start-up Plan?
When you start a business, A very simple business 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 or not, to tell if there is a business worth starting, but it is not enough to start a business with.
Is There a Standard Business Plan?
When figuring out how to write a business plan, one that follows the advice of business experts, it must includes a standard set of elements. Plan formats and outlines vary, of course, but generally, a business plan will include standard components such as descriptions of the company, product or service, marketing, forecasts, management team, and financial analysis.
Your business plan depends on your specific situation. For example, if you’re going to write a business plan for your own use, you may not need to include all the background details that you already know. Description of the business 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 Business Plan?
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 marketing strategies and formatted business 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.
It depends on each business, but usually it’s the cash flow analysis and the implementation details.
Here is a Standard Outline
If you have all the main components, you can put it in any order you want, but here’s a suggested sample business plan outline:
- 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.