reasons for preparing a business plan - london … · web viewthis section will briefly outline the...

Business Plan Outline

There are many variations in the format that can be used when writing a business plan. The tabs in this binder outline a common format used in the Self-Employment Benefit program. If you follow this particular outline thoroughly, without skipping any of the listed sections, you will have a complete and comprehensive business plan.

Your business advisor is here to help answer any questions you may have with your business. They can assist you in the development of your business plan. They can provide additional resources, support, and guidance. Schedule a meeting today!

Title Page

Your plan should begin a title page that includes the following information: Company name and address, your name and contact information Date of submission Confidentiality Statement

Example of Confidentiality Statement

Example # 1:

“This document is subject to a confidentiality agreement between the Small Business Centre and SEB Client Enterprises. Any disclosures, dissemination, distribution or copying of this document without the express and written consent of SEB Client Enterprises is prohibited.”

Example # 2:

The information provided by ABC Company in this business plan is unique to this business and confidential; therefore, anyone reading this plan agrees not to disclose any of the information in this business plan without the express written permission of ABC Company.

Points to Remember:

Your business plan is a reflection of your business; be professional, remember branding Type your plan using a standard font e.g. “Times New Roman” (minimum 10 pt font) It should be on 8 ½”X 11” white paper It should be neatly organized with divided and labeled sections Submit 2 copies of your completed business plan

SEB Program – June 2010 - Business Plan Outline

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Table of Contents

Remember to list the corresponding page numbers of all sections. Make sure to include a list of appendices.

Section 1: Executive Summary

Section 2: Company Overview

Personal Bio Management Team & Support Business Structure Mission and Vision

Section 3: Environmental Analysis

Industry Analysis Customer Analysis Competitor Analysis Strength Weaknesses Opportunities and Threats (SWOT) Analysis

Section 4: Marketing Strategy

Target Market Profile Positioning Statement Marketing Mix: 4P’s (Product, Price, Place, Promotion) FAB Chart (Features, Advantages, Benefits) Promotional Plan – Objectives, Goals & Activities Business Branding

Section 5: Operations Human Resources Location Sales Process Production Process Suppliers Legal Considerations Office Systems Operations Checklist / Operations Implementation Plan

Section 6: Financials Cash Flow Tool Contingency Plan

Section 7: Appendices


Section 1 – Executive Summary

A well-written Executive Summary should give an overview of what is to follow in the business plan. It should intrigue the reader and create a desire to continue reading your plan . You will include such things as the nature of your business, general location, financing required, the market share you plan to attain, and other general, but important, points about your business. Because it summarizes your plan it should be completed LAST and be no longer than two pages.

Checklist:

I have included a summary of all major sections of the business plan. All debt and equity financing has been addressed.


Section 2 – Company Overview

Personal BioThis section provides the reader with background about you - the business owner. You will include such things as your experience in this field, any relevant education, and why you are interested in starting this business. The introduction will allow the reader to gain a more thorough understanding of the person behind the business. You should refer to your business resume in this section, telling the reader it is attached as an appendix item.

Management Team Profile & Support

I have described other members of the management team and provided a brief profile

I have included a listing of Business Management Supports such as:

Lawyer Accountant Bookkeeper Insurance Agent Bank / Banker Mentor Advisor / Advisory Team Technology Support / Advisor

Business Structure

I have explained the rationale for choosing my business structure; Sole Proprietor, Partnership or Incorporation.

Mission StatementYour mission statement focuses on the fundamental focus and purpose of your business. It answers the question – “why do we exist?” Mission statements are usually no longer than three sentences. Well crafted mission statements are often 1 sentence in length.

Vision StatementThe vision statement is based in the future. It identifies where the organization would like to go and what they wish to be. The vision statement provides inspiration, direction and motivation.

Checklist:

I explained clearly what my business is or does. I have introduced the skills, knowledge and experience being brought to the business. I have referred to my business resume. I have developed a concise Mission Statement. I have developed an inspiring Vision Statement.


Section 3 - Environmental Analysis

Industry AnalysisThis section describes the larger context within which you are working. An analysis will describe the state of your industry as well as the current trends, changes and opportunities. How healthy is the industry? Is the industry growing? Is it declining? State any trends or movements in your industry that may influence business. Trends can be identified using a PESTE Analysis (Political, Economic, Sociological, Technological and Environmental). Some examples of these trends include an aging population, increasing government regulations in specific industries, economic recession, and new technology, to name just a few. If you have supporting documents they must be put into the appendix with the important information highlighted.

Customer AnalysisThis section describes the local context within which you are working and will describe the size of the market, the health of the industry within the local London-Middlesex market, and trends within your market segment. Some examples include: the number of potential customers, the demographics of the region, the trends in the region, etc.

Remember to include what you learned from your customer survey and its findings.

Competitor Analysis

List 10 competitors and provide an in-depth analysis of 4 competitors. (Remember your BCP – be sure to use this info but also update the info.) Competitors include anyone who offers a similar product or service, or one that can be used instead of yours, or in-direct competitors. The product / service may not be identical, but it provides the consumer with the same or similar key benefits. Do not forget to include “Do-It-Yourselfer” competitors.

Strengths Weaknesses Opportunities and Threats Analysis (SWOT)

Complete a SWOT analysis of you and your business. Identify the key strengths and key success factors of you and your business. Identify your own weaknesses, the weak areas of your business, and the key risk areas in your business. By identifying these weaknesses, you can identify strategies that reduce or eliminate these threats or risks.

Typical Risks-Examples:Inside the venture Important team member leaves venture Slow prototype development delays market entry Not finding a suitable location can delay startup Limited access to capital Venture is subject to bank approval

Outside the venture Competitors respond aggressively Competitive advantage is eroded Strategic partner cannot be found No agreement with suppliers can be reached Industry downturn limiting customer spending


Section 3 - Environmental Analysis continued

Provide the reader with your conclusions. You should identify how you are applying this knowledge specifically to your business strategies.

Simply described, this section should describe “what does this mean for my business”. These business strategies are based in the SWOT analysis. Some examples:

Participation in a specific trade show might be necessary and vital to your business Specific marketing tools and venues could be identified as the best tactics to utilize A strategic alliance with related businesses could be a way to “get known” in the industry Insurance on business owner(s) or partners could be seen as a way to mitigate risk of getting

sick, injured and therefore unable to generate revenue

Checklist:

I have fully described the industry I operate within I have fully described my marketplace I have identified associations and memberships I will belong to so as to keep informed regarding

trends in my industry I have identified trends, global changes, or issues that may impact my industry:

Political Issues or Trends Economic Trends Sociological Trends Technological Impact Environmental Issues, Trends or Impact

I have listed at Least 10 of my Competitors. I have completed a thorough SWOT Analysis of 4 competitors (update BCP information) I have summarized my conclusions based on my personal SWOT analysis and have identified

key strategic goals. I have identified opportunities within the industry and marketplace. I have identified key risks within the industry and identified strategies to address these threats

I have identified my competitive advantage(s). I have identified my value proposition / unique selling features


Section 4 – Marketing Strategy

Your marketing strategy is one of the most important areas of your business plan. This section outlines where your product/service fits in the marketplace (referred to as market positioning). For example, do you want to be recognized as a lower quality, inexpensive alternative? Do you want to sell larger quantities and maintain lower margins? Or do you want to cater to the more affluent individuals with higher priced, higher “image” goods?

The main components of your marketing strategy include:1. Target market profile2. Positioning Statement3. Marketing Mix: The 4 P’s – Product, Price, Place, Promotion4. F.A.B Chart (Features, Advantages and Benefits)5. Promotional Plan - Objectives, Goals & Activities6. Business Branding

Target Market Profile

First you must realize that “everybody” is NOT your customer! This section should define the very specific groups you will be targeting in your marketing efforts (neighborhoods, ages, income level, size of the market, life style, etc.). Remember to use your research findings.

Positioning Statement

The Positioning statement. Should illustrate how you want your target customer to view your product, service or organization. The statement defines the benefit of your product, service or company to your target customer, and states how you are different from your competitor. Every decision you make regarding your product, brand, service, company, etc. should support your positioning statement.

The following is an example of a positioning statement that successfully delivers the message to its target audience.

“To Frequent Flyer Business Executive (Target audience) FlyRight (Product/Company name) is the one jet lag remedy (category) that allows you to stay healthy through the flight and arrive at your destination feeling as invigorated as when you left so you can get right to work (key benefit) unlike sleeping pills and caffeinated drinks that provide temporary relief, but take huge toll on productivity later on (differentiator/competitive advantage). By: Mike Gospe, The Marketing High Ground.

Marketing Mix: The 4 P’s – Product, Price, Place, Promotion

The “Product” section should describe your product / service in detail. What makes your product / service different and unique? It includes the strategy you used in establishing your product mix (the products/services you carry). Incorporate your research findings.


The “ Price” section describes your pricing and the strategy used in establishing your pricing. What pricing strategies are you using? How does your pricing compare to your competitors? Your price does not necessarily have to be lower than your competitors for you to be successful.

The “ Place” section (distribution channels) describes where your customers are going to be able to purchase your products or services. How are your customers going to access you, your products / services? Are you going to them, or do they come to your premises? Do your customers make appointments, or do they just drop in? Are you home-based?

The “Promotion” section This section provides an overview of how you will be promoting your business. This section will briefly outline the marketing strategies, tactics and tools which you will use to promote your business. The details of various campaigns can be described more fully in the marketing implementation plan.

F.A.B Chart (Features, Advantages and Benefits)The FAB Chart is not only a summary of your product and service offerings, but a description of why your customer would purchase from you. The benefit statements can be helpful when developing your marketing messages and your marketing peripherals. Features are specific characteristics of your product or service (Facts can also be used to describe your organization and your qualifications). The Advantages describe what the product does for the customer and the Benefits explain how it will help the customer.

For example: Our company provides 24/7 customer service (Feature), which means you will be able to speak to anyone the minute you have a problem (Advantage) giving you peace of mind that you and your loved ones will be taken care of immediately (Benefit).

Promotional Plan –Objectives, Goals & Activities

Be Specific ! – it is not enough to say your marketing plan is to generate word of mouth. The marketing plan is a summary of how you are reaching your target customer. It is also linked to timelines.This section should reflect your marketing goals and how you are going to achieve these goals. Many of these goals will be tied to a timeline as well. All new businesses need to create awareness in order to start generating business. How do you plan to start this word of mouth? How are you creating a “splash” or enter the market? What specific actions are you undertaking? What marketing tools will you use to accomplish these goals? Please use the Marketing Campaign sheets provided.

For example: Consider an exterior house painting business. In order to initially create word of mouth, I am going to use “door knockers” to hang on neighbouring properties in order to increase the awareness of my business and the work that I have done”. Describing the tool along with why and how you are using these tools will help you to develop a solid strategy.


Examples of marketing goals for new businesses might include a) creating awareness b) generating sales leads and c) obtaining referrals.

Business Branding

Branding your business is an essential part of marketing and promoting your business. Describe how you will brand your business and create a brand identity.

Checklist:

I have identified my Target Market

I have described the buying habits / purchasing process of my customers.

I have identified the geographic area that my target market is in.

I have included relevant customer surveys and market research findings.

I have described my pricing strategy and I have compared my pricing with my competitors.

I have identified the Features, Advantages & Benefits in a FAB chart.

My marketing goals, actions and promotional activities (campaigns) have been clearly described (S.M.A.R.T. goals).

I have identified all short-term goals/objectives – First 3 months

I have identified all medium-term goals/objectives – Four months to 1 yr.

I have identified all long-term goals/objectives – 1, 3 & 5 years (Paragraph each)

I have included copies of my marketing materials in the Appendix


Section 5 - Operations

Checklist:

Human Resources I have described my staffing needs and plans to hire I have listed any employment agencies and contacts that can assist me in staffing I have included a job description for each position in my business. I have provided an organization chart

Location I have identified my location and any related costs I have provided a map of the physical location and described my location strategy I have provided a floor plan of the facilities, and scheduled hours.

Sales ProcessA Sales Process describes the steps from promotion to closing the deal, including follow up. Planning what these steps are helps in setting Sales goals such as how many cold calls/day? How many marketing letters per day? How will you follow-up with these prospects? How will you handle objections? How do you plan on following up with clients to ensure repeat business?

I have mapped out or described my sales process (verbal description, a chart, or drawing) I have included documents such as a list of questions I will ask the customer during a

sales call, a customer relationship management form, a list of possible objections and my responses, etc. in the Appendix

Production Process Each business will have its own flow of information and goods. Sketching out this process out often helps you plan the day to day operations of your business and will assist you in determining if you have all the proper tools, equipment, staffing and processes in place to successfully deliver your product / service.

I have mapped out or described my production process I have included documents such as customer information tracking sheets, quotes,

confidentiality agreements in the Appendix.


Section 5 - Operations continued

Suppliers I have identified all potential suppliers with contact information and price lists.

Legal Considerations I have drafted all applicable legal contracts, either for customers or sub-contractors. I have all the required licenses, permits, training to operate my business. I have obtained proper insurance – liability, business, WSIB, Errors & Omissions. I have included my privacy statement I have drafted my code of ethics

Office Systems I have described how I am going to track important customer information (be sure to

include any Customer Relationship Management software) I have included a “backup” plan – computer, staffing, illness etc I have described my bookkeeping system and how I will keep track of revenue expenses.

Operations Implementation PlanThis section describes the most important activities and milestones for the development of the business and what the goals for the company are.

I have included an operations checklist I have identified all short-term goals/objectives – First 3 months I have identified all medium-term goals/objectives – 3 months to 1 yr. I have identified all long-term goals/objectives – 1, 3 & 5 years (Paragraph each)


Section 6 - Financial Plan

Your financial plan is a key component of your plan. The financial plan is an overview of your business and gives the reader an insight to your business and its economic viability. A financial plan is a critical piece of information that you will need when looking for financing, so don’t overlook its importance.

Start-Up Costs - Project exactly what you will need to begin this venture as far as equipment, cash, inventory, supplies, etc. Be specific; a list describing the tools and equipment required may be included with your financials. Calculate the economic value of what you are contributing to your business. This is known as your contributed equity. State how you much you will need in financing and how you intend to obtain the financing (banks, investors, personal investments, PLC)

A Projected cash flow should also be done for your breakeven scenario. A cash flow basically shows all of your “cash in” from operations minus all of your “cash out” from expenses, wages, loan payments, etc. For SEB purposes, use the Cash Flow Tool to compute the “Expected Outcome”

Your projected income statement shows your sales minus your “cost of goods sold” (if applicable), less expenses. It also takes depreciation, interest, and taxes into consideration. Its ultimate goal is to determine when you will be “in the black”. For SEB purposes, use the income statement included in the Cash Flow Tool. If applying for bank financing, please do not use the Income statement provided as it does not accurately portray the financial situation.

The balance sheet identifies total assets minus liabilities to determine the owner’s equity. An opening balance sheet is a statement of your business financial health at this point in time (right before you open). A variety of ratios can then be completed to see how your situation compares to that of your industry. The balance sheet will be more important for business that have larger capital investments in inventory and equipment such as manufacturing and retail businesses. A balance sheet is not required at this time for SEB purposes, however a bank may require you to provide one.


Section 6 - Financial Plan continued

Assumptions – In order to make any projections you need to make assumptions. Make a list of assumptions to be made regarding your financial statements so that the reader can understand your thought process. Example: loan payments are based on a $10,000 principle amortized over 5 years at a 10% interest rate. Stating these assumptions will make your information clearer to the reader.

State the type of accounting system to be used, by whom, and how frequently it will be updated (e.g. every day by my bookkeeper, once a week by myself, etc.)

Contingency Plan - If sales are below projections what will you do? What is your alternate plan?

Check List:

Cash Flow Tool I have listed all of my Start-up costs.

I have completed a thorough Sales Activity Chart. I have included pricing and costing worksheets (COGS worksheets)

I have completed a Cash Flow Statement for my first year.

I have completed Pro Forma Income Statement for my first year.

I have completed a Marketing Activity Chart

Other I have listed all my key assumptions made in the financial statements

I have included a contingency plan


Section 7 – Appendix

Below please see a list of items that you might consider adding in your appendix

I have included my business resume, brief biography or web bio. I have included a Location diagram. I have included sample invoices, business cards, stationary or any other

business related material. I have included a draft of my website I have included any relevant contracts or draft documentation. I have included a copy of my privacy policy regarding any documentation

relevant to the “Privacy Act” (Must be put in place when collecting any type of personal information = consent)

I have included process flow diagrams – sales process, information flow, billing and accounting process

I have included relevant supplier lists I have included relevant potential customer lists I have included a price list All relevant appendices are included to reinforce business plan.


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