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WRITING YOUR PLAN
Now's the
time to consider the actual elements that you'll
include in the written document.
A business plan customarily
has a number of major elements or sections. Each
of these elements serves a particular purpose in
the overall presentation of your plan. The
following list identifies and briefly describes
each of the documents or document categories
that will make up your plan. They are presented
in the order in which they usually appear
in the plan. But don't feel constrained to
follow this exact format if another way makes
more sense because of the nature of your
business. For example, the financial portion of
a plan for a business with a 20-year track
record is much more important (and
comprehensive) than the financial portion of a
startup business's plan.
The relative mix of product
and services to be offered can also affect
the content of a plan. Issues relating to
inventory, production, storage, etc., become
less significant as the product/service mix
moves toward a purely service business. For
example, a business that relies on the services
of many professional employees would provide
substantial details about acquiring and
retaining these vital workers.
In any event, it pays to at
least mention all the major issues listed below,
even the ones that are relatively less
significant to your particular business. Someone
who's reading your plan will be more confident
about your assessment of the situation if you
identify such issues and resolve them, however
summarily. For example, if you plan to work
alone and perform all services personally, you
might note that you anticipate no need to hire
employees or engage independent contractors if
the business succeeds at the levels projected in
the plan. You don't want to raise any questions
in the mind of your audience that aren't
resolved somewhere within the plan document.
Remember that there is no
requirement that these items be created
in the order shown. In fact, conventional wisdom
has it that the executive summary, which is
preceded only by the cover sheet and table of
contents, should be prepared after the rest of
the plan is complete. The components of a
written business plan are:
- General
format and presentation: first,
remember that the business plan is a clearly
recognizable type of document, and your
audience will have some expectations with
respect to style and contents. Just as your
teachers in school expected you to conform
to certain standards, the people who will
look at your business plan will have certain
expectations.
- Cover
page and table of contents: they
identify your business and make it easy for
readers to find and examine particular
documents.
- Executive
summary: this is arguably the
most important single part of your document.
It provides a high-level overview of the
entire plan that emphasizes the factors that
you believe will lead to success.
- Business
background: this is the section
that provides company-specific information,
describing the business organization,
history, and the product or service the
business will provide.
- Marketing
plan: this presents an analysis
of the market conditions that the business
faces, sets forth the marketing strategy
that the business will follow, and provides
a detailed schedule of marketing activities
to support sales.
- Action
plans: this is where you detail
how operational and management issues will
be resolved, including contingency planning.
- Financial
projections: this is another
extremely important section. Your
projections (and historical financial
information, if you have it) demonstrate how
the business can be expected to do
financially if the business plan's
assumptions are sound.
- Appendix:
this is the place to present supporting
documents, statistical analysis, product
marketing materials, resumes of key
employees, etc.
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