Business plans, when completed, mean that every aspect of the business opportunity has been considered and worked out.
A business plan is typically used to investigate business opportunities i.e. a company wishing to expand into a new product or service; or is used when purchasing or setting up a new business venture. Business plans, when completed, mean that every aspect of the business opportunity has been considered and worked out. Decisions can then be made as to whether the venture should proceed or not.
Elements of a Business Plan
- Executive Summary
- Statement of Purpose
- Description of the Business
- Products and/or services
- Market Analysis
- Operations Plan
- Marketing Plan
- Financial Plan
- Management and Personnel Plan
- Critical Path Planner
The Business Planning Process
- Determine overall goal(s)
- Develop basic assumptions or premises
- Identify alternative courses of action
- Evaluate alternative courses of action
- Determine best course(s) of action
- Document the Plan
The Core of the Business Plan
1. Description of the Business
- What business are we in?
- What is the nature of the industry/sector – trends/ the future
- Where do we come from/where are we going?
- What are our business strengths, weaknesses, opportunities, restrictions?
- What unique features, proprietary advantages, do we have?
- What are the major services we offer?
- What type(s), range, mix, characteristics, uniqueness, quality and value, cost, design and development, technology and trends?
3. Market Analysis (See Note 1)
- Who are our target customers/clients?
- What is the potential demand?
- How do we know the demand? How can we measure it?
- What competitors do we have? – specify them, and their uniqueness, etc
- What is the current market size?
- What is the condition of the market?
- What trends are apparent in the market, in the sector?
- What market shares have the competitors got?
- What are the dynamics of the market?
- What market share do I want?
4. Operations Plan (How the business is going to operate)
- What equipment do I need?
- What, if any, sub-contracting will I do?
- What facilities, buildings do I need?
- What is the physical location of the business?
- What inventory will I carry? (sources; quantities in use/in stock; lead times; prices; storage; systems)
- What documentation will I need?
- What labour will I require? (skills; numbers; cost; unions; health, safety, training)
- What professional services will I require?
- What contracts will I use?
- What is my costing system? Pricing system?
- What insurances do I need? (professional indemnity, etc)
- What secretarial, PR, research and development do I need?
- What overheads do I have?
- What administrative systems do I need?
- What documentation do I need?
- What is the marketing strategy? What do client’s need and want?
- What is our pricing ? (i.e. low price/high volume; high$/quality pricing; daily rate; fixed rate for the job; % of savings?)
- What, if any, distribution channels?
- Who is going to do the sales?
- What is our policy on customer services (complaints; warranties; information; bring up systems; freebies; meet and greet; ease of billing?)
- How are we going to advertise and promote?
- What image of the business do we want to convey – internally and externally?
- What is the service(s) life cycle?
- What is the marketing budget?
- What are the sources of funding?
- What are the income and expenditure forecasts?
- What are the cash flow forecasts?
- What is the break even analysis?
- What are the monitoring mechanisms?
7. The Management/Personnel Plan
- What is the business structure?
- What is the remuneration policy?
- What about training and development?
- What are the personnel policies?
- What are the industrial relations issues?
Sources of information for marketing or other purposes can be obtained from the Department of Statistics; Libraries and databases; Local Bodies; Industry Associations; Newspapers; Real Estate companies; competitors.
Field research can be done using various methodologies, using professional research firms, local universities or yourself.
8. The Critical Path Planner