Business plans vary in shape, size, and color. If you were to view 100 business plans submitted to banks, you would see 100 unique plans. Some plans would be 10 pages, and others would be 100 pages. You might even have 5 page business plans.
Investors, including banks and the small business administration, all have different requirements and rubrics for decision making concerning business plans. In addition, entrepreneurs all have different drivers that helps them focus their plans. Some entrepreneurs will need much focus in “legal” sections, and others will need very little, depending on their business.
For instance, when this instructor submitted their plan, there was no legal section. But there wasn’t a lot of intellectual property to protect, either. Nor were there patents. Some legal matters were covered in the purchase agreement, but not in the plan.
So keep in mind the very flexible nature of a business plan. However, keep in mind also that you are enrolled in a class, and thus it is important to cover material in a thorough manner. Thus, students are required to complete all of the sections below, with guidance from their instructor. This will give you a broad and thorough experience, and prepare you should you actually submit a plan.
Maybe you will never actually *start* a business, and if this is the case you will be exposed to all of the important elements in a plan so you can help your future spouse, sibling, parent, friend, boss, or student as they work to put together a solid plan.
See the next page for step by step advice for each phase. Note on the syllabus when each phase is due, so you can be in compliance with the course due dates.
Executive Summary (To be added later, after all phases complete)
Create the executive summary after completing your full business plan. This will be uploaded with the Final Business Plan, which merges Phases 1-4 together into one document.
Note that each item here should be a “header” in your document. You will literally start each section with the heading below, and then include content below. Please write in single space, block format. This means there is no indentation before each paragraph.
This franchise is a part of the home cleaning industry. The home cleaning industry has been growing at 5% annually for the past 10 years, and is projected to grow 6% in 2016. New innovations in…(and so on)
The next page will contain instructions for each Phase.
For this section, review what industry your product/service/idea exists in. A sports team is in the “sports entertainment industry”, Chipotle is in the “Fast Casual Restaurant” industry, Mcdonalds is in the “Fast Food industry”, and so on.
Discuss this industry in terms of “past performance” and “future projections”. Is this industry growing? Do some research. Briefly discuss the competitors in this industry, including their market share. (Again you will need to research for this!) What are the gaps in this industry? Why is it ripe for your entry?
You should be able to perform this overview in 4-5 paragraphs.
This section covers “Industry Analysis” through “Nature of Participants” in the Chapter 4 guide.
Key Success Factors
Every industry has certain requirements for success. Chipotle has struggled recently because their key success factor: Fresh, organic ingredients as a part of a clean supply chain, has been compromised.
Perhaps your industry is service oriented? Or perhaps it is price conscious. Perhaps personnel are the utmost value? What is it? Quality, value, convenience? What are the key success factors? There should be at least 5 mentioned, thus this will be 7 paragraphs.
Here is where you look back so you can look forward. You are trying to see what is coming and happening right now. Think about the external forces of control (google it) and discuss the trends from each of these perspectives. What other industry trends are there? This section should be 7-9 paragraphs.
Long Term Prospects
Here you are speculating on the long term prospects of your industry. You are providing proof that in the long term, this is a viable industry. Are you trying to start up a newspaper or radio station? Well, you will have a lot of convincing to do! Long term, these industries are under threat!
Discuss the positive things happening in the industry and external environment that provide for this industries long term success. 3-7 paragraphs.
Here you will simply, in one paragraph, describe the company. The name, and a broad overview of the products and services the company provides. As an example:
McDonalds is a fast food restaurant that will be based in Isanti, MN. McDonalds will sell a variety of fast food products, such as burgers, sandwiches, and other meat products. In addition, the restaurant will sell side items such as French fries, soft drinks, and cheese pops. The restaurant also will offer coffee, deserts, and services such as catering, drive thru, and seated dining.
For the company history, provide a two paragraph overview of the history of the company. Who is the founder? What is the competitive advantage? Describe past performance.
If you are starting from scratch, include a history of your own professional development. Your experience, talent, abilities, and skills.
A mission statement is made up of the following items:
1. WHAT you are selling
2. WHO you are selling to (who is your target market?)
3. What do you do BETTER than anyone else?
Let’s take an elevator company:
“Otis Elevators designs and builds equipment that moves things and people up, down, and sideways, with more reliability and value than any other competitor.”
You can identify the “WHAT” (design and build of equipment)
You can identify the “WHO” (things and people)
You can identify the “BETTER” (more reliable, better value)
Students must write their own short mission statement that matches this construct.
Products and Services
Delve into each and every product line. Describe what the product is, and what the competitive advantage is for each product. Do the same for service.
Do NOT feel the need to go into “hyper detail”. In other words, do NOT write the following:
You do not need to break down your product line into this much detail (unless you want to)
Instead, you would write:
If your business has service elements, then be sure to describe the service.
Also, describe the customer benefit package associated with your business.
A customer benefit package includes products, services, and variants.
Products – Straight forward, but for this item, simply state “Food”, or whatever your product is. For example, if you owned a resort, you might say “Cabin Rentals”, “Boat Rentals”, “Lodge” as the products.
Be very general here. The goal is to simply see what the Total Package is
Services – Include a description of services that are both “for sale” and “not for sale”
Take an auto repair business. They will fix your car (service), but they also might have wifi, newspapers, and an inviting waiting room that are also services.
Variants – Discuss something unique or special that is offered in your business. For example, McDonalds might have Ronald McDonald every Thursday (scary!), or an auto repair place might have video games for the kids. A car dealership might have a big tank where kids can fish while mom and dad look at cars.
Quirky things that will help your business tand out.
This is simply a 1 paragraph overview of the current status of the business. Is this a brand new startup that is only currently “under development” in your tiny little brain? J Then state that.
Is it a business that is currently “For sale”, and operating under different ownership?
Legal Status and Ownership
If your business is currently owned by someone else, state that, and who owns it. Is it a LLC, a corporation, or a sole proprietorship?
Key Partnerships (If Any)
What existing partnerships are there, or are forseen? Perhaps your restaurant will partner with a homeless shelter, or your auto mechanic business will partner with a used car lot that does not have service on-site.
Describe the current state of the market. What are the strengths and weaknesses right now? 2 paragraphs.
Market Segmentation and Target Market Selection
What are the different segments in the market? Are you going to focus on any particular segments. (Please know what a segment is, do some research).
Clearly lay out the segments you are going to focus on. Within each segment, set a target market.
You must have at least 1 segment and one clearly defined target market. Research to make sure you understand what these are. Each segment should get a paragraph description.
Do some consumer behavior analysis here. How do your customers generally move through the consumer behavior decision process? Google for more information.
Watch a video (2min) on Porter’s 5 forces.
Provide an overview of each of the 5 competitive forces mentioned in the video below.
When it comes to “Industry Rivals”, be thorough and List all of your main competitors, and describe their strengths and weaknesses.
Revenue Drivers and Profit
What are your main sources of profit? How will you plan to maximize focus on your main sources of profit?
What important considerations are there for driving revenue in your main product line?
Fixed and Variable Costs
Create a spreadsheet that lists your anticipated fixed and variable costs. Forecast the first year’s sales.
So you will list your various revenue streams, and your various expense items.
What are the start up costs associated with this endeavor? What sources of funding must be used in order to start the business? (think self, family/friends, investors/bank)
Challenges and Risks
Identify some potential challenges with the business. Research PESTEL analysis, and read about each of the external forces that affect your business. Are there any within PESTEL that are particularly challenging or cause risk?
Management Team (Including a Skills Profile)
Utilize the Birkman Method to describe your organizational focus/skill set. Describe how your interests and organizational focus areas, as described in the Birkman Method, converge for success within this business model.
Look at your bottom 3 areas of interest. Describe how you will delegate those tasks to others.
What other leaders are involved in this business? Briefly describe.
Ancillary Documents (Not Required)
Some business plans will require the below items, but we will not cover them in this class:
Pro Forma Income Statement
Pro Forma Balance Sheets
Pro Forma Cash Flows