BUSINESS PLAN

A business plan is a formal statement of business goals, reasons they are attainable, and
plans for reaching them. It may also contain background information about the organization
or team attempting to reach those goals.
Business plans may target changes in perception and branding by the customer, client,
taxpayer, or larger community. When the existing business is to assume a major change or
when planning a new venture, a 3 to 5-year business plan is required, since investors will
look for their investment return in that timeframe.
Your business plan is essentially your answers to a comprehensive list of questions. The
first and most important question is this: where do you want your business to go? Stated
differently, what do you want your business to look like in three, five or even 10 or more
years? What level of revenues and profits do you have at that time? How many employees?
How many locations? And so on.
Likewise, your business plan should answer these questions for a shorter time period,
particularly one year. That is, what are your business’ goals for the current year, and what
must you accomplish to make the year a success.
In answering these big business planning questions, you naturally have to answer questions
pertaining to each of the core business plan sections as follows:

 Company Analysis: what products and/or services do you offer now and/or what
will you develop and offer in the future?
 Industry Analysis: how big is/are your market(s) and how are they changing?
What trends are affecting them and do these trends bode well for your future
success?
 Competitive Analysis: who are your competitors and what are each of their key
strengths and weaknesses? In what areas will you have or gain competitive
advantage? How?
 Customer Analysis: who are your target customers? What are their demographic
and/or psychographic profiles? What are their needs?
 Marketing Plan: how will your reach your target customers? What promotional
tactics and marketing channels will you use? How will you price your products and/or
services? What brand positioning do you desire for each?
 Management Team: who comprises your current team and what key hires must
you make in order to execute on the opportunity in front of you. Will you build a Board
of Advisors or Directors, and if so, who will you seek?
 Operations Plan: what is your action plan? What are the milestones you must
accomplish to go from where you are now to where you want to be at year’s end? At
the end of five years?
 Financial Plan: how much external funding (if applicable) do you need to build your
company? In what areas will these funds be invested? What are your projected
revenues and profits over the next one to five years? What assets must you acquire?
Answering the questions in these eight key business plan sections helps you formulate
specific business goals. They also help you answer the most important question to include
when you write the Executive Summary of your business plan, which is this: why is your
business uniquely qualified to succeed?
There are many reasons why your business might be uniquely qualified to succeed. For
example, it could be the quality of your management team. Or unique technology and/or
partnerships you’ve created. But importantly, if you have no unique qualifications, it’s too
easy for competitors to steal your customers and market share at any time.
So, if you’re thinking right now about how to write a business plan, sit down and start
answering the questions outlined above. It’s the thinking and strategizing part which is
actually more important than the writing part. Sure, if you want others to read and/or fund
your business, your plan has to read well and be formatted properly. But it’s the content in
the business plan, your strategy and reasons why you’ll succeed, that will prompt others to
invest or otherwise join you in your conquest to build a thriving business!

AUDIENCE
Business plans may be internally or externally focused. Externally focused plans target goals
that are important to external stakeholders, particularly financial stakeholders. They typically
have detailed information about the organization or team attempting to reach the goals. With
for-profit entities, external stakeholders include investors and customers. External stake-
holders of non-profits include donors and the clients of the non-profit's services. For
government agencies, external stakeholders include tax-payers, higher-level government
agencies, and international lending bodies such as the International Monetary Fund, the
World Bank, various economic agencies of the United Nations, and development banks.
Internally focused business plans target intermediate goals required to reach the external
goals. They may cover the development of a new product, a new service, a new IT system,
a restructuring of finance, the refurbishing of a factory or a restructuring of the organization.
An internal business plan is often developed in conjunction with a balanced scorecard or a
list of critical success factors. This allows success of the plan to be measured using non-
financial measures. Business plans that identify and target internal goals, but provide only
general guidance on how they will be met are called strategic plans.
Operational plans describe the goals of an internal organization, working group or
department. Project plans, sometimes known as project frameworks, describe the goals of
a particular project. They may also address the project's place within the organization's
larger strategic goals.

CONTENT
Business plans are decision-making tools. The content and format of the business plan is
determined by the goals and audience. For example, a business plan for a non-profit might
discuss the fit between the business plan and the organization’s mission. Banks are quite
concerned about defaults, so a business plan for a bank loan will build a convincing case
for the organization’s ability to repay the loan. Venture capitalists are primarily concerned
about initial investment, feasibility, and exit valuation. A business plan for a project requiring
equity financing will need to explain why current resources, upcoming growth opportunities,
and sustainable competitive advantage will lead to a high exit valuation.
Preparing a business plan draws on a wide range of knowledge from many different
business disciplines: finance, human resource management, intellectual property
management, supply chain management, operations management, and marketing, among
others. It can be helpful to view the business plan as a collection of sub-plans, one for each
of the main business disciplines.
"... a good business plan can help to make a good business credible, understandable, and
attractive to someone who is unfamiliar with the business. Writing a good business plan
can’t guarantee success, but it can go a long way toward reducing the odds of failure."