Example Business Plan Outline

Introduction

Business plans are often prepared only when a company is seeking financing, in order to demonstrate that it can manage itself and sell enough of its goods and services to be attractive to investors. However, a good business plan can also provide a review of the company's goals and objectives and provide benchmarks for measuring progress. The process of creating a business plan often allows a company to clarify its goals or spot potential problems, and assists in long-range planning and growth.

Most business plans use some or all of the following sections:

Table of Contents

You should include this even on a short business plan so nobody has to hunt for specific information.

Executive Summary

This section should be relatively short (no more than 2-3 pages) and provide an overview of the entire business plan. To be effective, it should highlight management, describe the product or service and how it is sold, explain the need for the product or service and highlight critical benchmarks. If the business plan is a financing proposal, it should also ask for the appropriate amount of money and present clear reasons for the request. It should not present detailed information (resumes, mission statement, etc. can be included in the Appendix), but should make the reader interested in reading the complete business plan.

Description of the Company

Cover basic information, such as the business type (sole proprietorship, S-corp., etc.), years in operation, location, number of employees, etc. It should include the overall company strategy and key successes. It should also describe the company's future objectives and goals and how they will be met.

Management

This section should include a short description of each top manager's skills and experience and may list certain supporting staff (such as the company's accounting firm or specific consultants who provide mission-critical services or will be key in implementing a proposed business change). If appropriate, it may also include an organization chart and employment policies. It should also address the question of whether or not the company's goals and objectives will require additional management or staff; estimated costs for that should be addressed in the financial projections and/or an appendix.

Product/Service

Clearly describe the product or service, using common English. Include any factors which differentiate the product or service from similar ones sold by competitors (e.g. it is faster or less expensive). You may want to include catalogs, photographs, sell sheets, etc., product reviews, and customer endorsements or testimonials.

Description of the Market

Specifically identify the primary and secondary market. Include potential additional revenue sources (e.g. affiliate programs, banner ads, etc.).

Market Research and Analysis

Whether you use formal or informal research and analysis, you need to demonstrate that there is a need for your product. You might also include supporting data in an appendix.

Marketing Plan

This should include more than your advertising budget. A comprehensive marketing plan addresses many issues, including public relations, associate programs, co-marketing with complimentary businesses, pricing and packaging strategy, distribution, sales incentives, and industry trends.

Competition

Be specific in identifying your competition and their target market. Describe similar products or services and show why yours has an advantage or how it will be differentiated. If you plan on creating a demand for your product by offering 24-7 customer service or free delivery and the competition doesn't, talk about it in this section of the business plan.

Operating Plan

How will the business operate? What is the general process used to take goods from raw materials to finished product? For providing services?

Financial Information

This section should describe the company's capital equipment requirements, investment needs, etc.

Historical Financial Data

This section should include income statements, cash flow analysis and balance sheets. This only applies if you are working with or buying an existing business.

Assumptions

Describe the assumptions which were used in creating future projections. For instance, what industry trends did you use, what assumptions are you making about your target market, etc. You might include supporting information (trade magazine article, survey, etc.) in an appendix.

Five-year Projections

Estimate company growth over a five-year period. If applicable, compare to industry growth.

Use of Proceeds

Describe how profits will be utilized. What percentage is expected to be reinvested into the company? Will these investments involve equipment purchases, relocation, staff training, etc.? What percentage is expected to be taken out of the company as profit?

Risks

Describe risks which could affect projections, and show that management has the capability to address them. Demonstrate that you have thought out possible scenarios and how you would respond to them. Have you planned on enough capitalization to survive a slow period? Would you be able to replace key staff? Think up worst-case scenarios and make sure you would be able to address them.

Benchmarks

Describe how the company plans to execute the business plan over time. Use charts or timelines to detail specific goals or steps the company will take to meet objectives.

Appendix/Attachments

Include supporting information, such as management resumes, industry-related articles or detailed breakdowns of information summarized in the body of the plan, in this section. Reference this information in the appropriate sections of the business plan.

Resources

MSBDC

Massachusetts Small Business Development Centers - The Massachusetts Small Business Development Centers (MSBDC) engage in individual counseling, training and economic development activities that contribute to the improvement of the economic climate for small businesses in Massachusetts. Includes useful links and information about the center locations, services, and workshops.

SCORE

Service Corps of Retired Executives - "a resource partner with the U.S. Small Business Administration. SCORE is dedicated to aiding in the formation, growth, and success of small business nationwide." Includes links to SCORE's free email counseling, workshops, FAQ's, resources, volunteer opportunities, and more. The site also has a directory to find the nearest SCORE office, including six in Massachusetts.

 

 

 

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