A Simple Business Plan Format

Business Plan Elements

Almost always successfully starting a new business requires a written business plan.  In the past, I have been asked for my business plan format I used to start and manage my companies. The following format helped me focus on the implementation of action plans that supported my business concepts.

To start, the business plan should address the financial needs of the business.  Anywhere you go to raise capital for the start‐up will require one.  The business plan provides the information necessary to make a decision on funding.  It also is the basis for your verbal presentation to investors.  The business plan will provide your thoughts on what part you want to play in the business, i.e. working owner; department manager; silent partner; etc.  It will also show your knowledge of the business and market.  The information such as: product competition; market differentiation; staffing; use of funds; etc. will often expose possible early mistakes.  Here is my simple outline of topics for each heading I successfully used to communicate business concept expectations to employees, investors and customers:

Simple business plan format outline

  • Executive Summary: Write this last.  It is just a page or two of highlights.
  • Business Description: Describe how you fit into the industry.
    • Describe the industry and your business fit (include discussion on the SWOT 4 powers that affect it):
      • Customer
      • Substitutions
      • Suppliers
      • New Entrants
    • Business structure…Legal structure and type of operation i.e. established or new; manufacturer or wholesaler or retail or service.
    • Product or Service: Describe what you are selling including features & benefits.  Focus on customer benefits.
    • Competitive analysis including benchmarking & your Unique Selling Proposition (USP)…why should customers buy from you?
  • Strategy and Implementation: Be specific.  Include management responsibilities with dates and budgets.  Make sure you can track results.
    • Market strategies (Price/Place/Promotion/eCommerce): You need to know your market, customer needs, where they are, how to reach them, etc.
      • Pricing strategy: i.e. Premium / Value / Niche / Markup / Competitive / Discount / etc. and why. Value means comparison with competition.
      • Positioning strategy: Brand image/perception compared to competition…How you will reach your audience.
      • Distribution strategy: Direct/Indirect/eCommerce
      • Promotion strategy including advertising, packaging, public relations and personal sales.
      • eCommerce Strategy Summary: Include discussion of website, development costs, operations, sales and marketing strategies.  If you’re looking for a free platform, WordPress and its WooCommerce plug-in is the way to go. I also recommend Shopify if you’re looking for more support and an all-in-one solution.
    • Manufacturing strategies: Goals for product development should center on the technical as well as the marketing aspects of the product so that you have a focused outline from which the development team can work.
  • Management Team: List key management members and advisors.
  • Financial Analysis: Make sure to includes projections for: Sales/P&L/Balance Sheet/Cash Flow/Breakeven. Download the SCORE Financial Projections Template and Guide.

Build your plan … then organize it.  I do not recommend developing the plan in the same order in which you present it as a finished document.  For example, although the Executive Summary obviously comes as the first section of a business plan, I recommend writing it after everything else is complete.  It will appear first, but you write it last.  Cash flow is the single most important numerical analysis in a plan, and should never be missing.  Most plans will also have Sales Forecast and Profit & Loss statements.  I believe they should also have separate Personnel listings, projected Balance Sheet, projected Business Ratios, and Market Analysis tables.  I also believe that every plan should include bar charts and pie charts to illustrate the numbers.

Size your business plan to fit your business.  Remember that your business plan should be only as big as what you need to run your business.  While everybody should do planning to help run a business, not everyone needs to develop a complete formal business plan suitable for submitting to a potential investor, bank, or venture capitalist.  Do not include outline points just because they are on a big list somewhere, or on the list above, unless you are developing a standard business plan that you will be showing to somebody else who expects a standard business plan. There is an excellent website for the Small Business Association (SBA) that walks you through writing a business plan.  Just go to https://www.sba.gov/business-guide and then follow the directions.

I recommend you complete the written business plan before you spend any money on starting the business.  It will limit unnecessary spending and hone your focus on what is required for success.  It will also provide the means to apply for funding.

A word of caution about business plans: remember that if your business plan was a book, it would be categorized as realistic fiction. Could it happen? Sure. But will it happen exactly as you described? Not likely. Don’t approach your business plan as a step-by-step map to success. Realize that the plan merely provides the guard rails. It may inform future decision making, but it shouldn’t dictate it. You need to learn to be flexible with your business plan. Things won’t always go as planned. For instance, you might get rejected by an investor or customer. New technology could disrupt your industry. Companies like Blockbuster and Kodak are obsolete because they weren’t willing to change. Don’t make the same mistakes they did. Throw out your pride and become a constant learner so you can adapt when needed.

General George Patton once said, “No battle plan survives the first contact with the enemy.” The same is true with an entrepreneurial idea — “no product or service stays the same once you get customers,” said AOL co-founder Steve Case. This means that you should build into your plan strategic inflection point testing. Inflection points are changes that alter the taken-for-granted assumptions underlying a business model. They can “feel” like sudden changes however, they tend to build up slowly, gather momentum until the transformative shift becomes clean.

For more information about the contents of the simple business plan format, view the free video Customer Centric Approach To Business Planning. If you are planning to start a business or are thinking about scaling an existing one, be sure to read the ebook “Customer Centric Business Planning: A Guide to Optimizing Your Business for Maximum Success”. It is an essential book for business owners, managers, and entrepreneurs looking to leverage real-time insight to start and improve their business operations. Learn how proper customer centric business planning can assess risk and opportunity, and create an actionable roadmap for success.

Copyright ©John Trenary 2021

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