Key items to include in a Business Plan:

  
A business plan is an important tool for planning, managing and growing your business. A well-designed plan lays out a vision of growth, important factors involved and the steps needed to get there. It also provides a guide for managers and staff as your business grows. A business plan is also an essential document for obtaining financing for your business. Every plan needs to be unique, but the key items to include in a business plan include:
  • Define a new business or existing/reconfigured business
    • Executive Summary (max 2-pages)
      • Introduce company (business name, location), what it does (1-sentence mission statement), value proposition (1-sentence Unique Selling Proposition), consumers’ identified key pain points (summary table of identified relevant key problems faced by existing & target consumers), solutions (summary table of company’s existing and/or future products & services that address these problems), target market (summary table of ideal customers, how many, where, value), competition (summary table of other key competitors, with similar products and services), team (summary table list of executive/management & key employee/contractors with relevant credentials & experience of each), financial plan (summary table highlights of key aspects of financial plan, e.g., planned sales/revenue, expenses, profitability), funding requirements (summary table of amount and allocations), metrics & milestones (summary table of hard & soft Key Performance Indicators and milestones)
    • Company Overview (max 6-pages)
      • More key details about company’s ownership and legal structure (privately held sole proprietorship or family-owned or partner-owned company? investors? shares? value? Non-profit or LLC or C-corp or S-corp?), company history (brief major historical achievements and/or issues), location (previous, current, future), mission statement (with reasons), value proposition (with reasons)
    • Products & Services (max 12 pages)
      • More key details about products & services (list, prices, features & benefits, value proposition/USP), problem & solution (list what and how target consumers’ key pain points identified, how the company’s products & services address these key pain points), competitive matrix (SWOT/Strengths Weaknesses Opportunities Threats and gaps analysis: compare company’s products & services, prices, features and benefits vs. those of competitors; sourcing & fulfillment distribution chain vs. key competitors; list with brief descriptions relevant supporting technology, costs, contributions toward & detractions from company’s performance & processes vs. key competitors’ known supporting technology; intellectual property, e.g., registered patents, trademarks, copyrights, value vs. competitors; future products & services vision for 3-year short-, 6-year mid-, and 9-year long-term future; industry/sector economic, political/fiscal/legal, social/cultural, technological environment & trends).
    • Target Market (max 10-pages)
      • TAM/Total Available or Addressable Market, SAM/Segmented Addressable Market or Served Available Market, SOM/Share of Market (3-year short-term future), buyer/user personas, key customers
    • Marketing & Sales Plan (max 10-pages)
      • Positioning (mass-market or mid-market or up-market or luxury-market brand based on competitive matrix analysis)
      • Pricing (cost-based? competition-based?)
      • Promotion (packaging, advertising, PR, content marketing, social media)
      • Distribution (direct? retail? manufacturers’ representatives? original equipment manufacturer?)
      • Strategic alliances/partnerships
    • Metrics & Milestones (max 8-pages)
      • List of hard & soft Key Performance Indicators, with start-, mid- & end-point milestones and key assumptions
    • Team (max 8-pages)
      • List of key executives, managers, key employees & contractors, with relevant credentials & experience of each, compensation (base, deferred, benefits), risks & risk mitigation (confidentiality, non-compete, insurance)
    • Financial Plan (max 10-pages)
      • Profit & Loss Statement (annual): revenue/REV; direct cost-of-sales/COS or direct cost-of-goods-sold/COGS, gross margin/GM, operating income/OI, total operating expenses/TOE, earnings before interest-taxes-depreciation-amortization/EBITDA, interest-taxes-depreciation-amortization expenses, net profit/income) for current and projected short-term future (3-year forward)
      • Cash Flow Statement (accrual accounting by month and annual) for current and projected short-term future (3-year forward)
      • Balance Sheet (by month and annual): assets (accounts receivable, money in the bank, inventory, etc.), liabilities (accounts payable, credit card balances, loan repayments, etc.), equity (owner’s equity + investors’ shares, retained earnings, stock proceeds, etc.) for current and projected short-term future (3-year forward)
      • Sales Forecast (by month and annual): by customer segment, by product & service category, for current and projected short-term future (3-year forward)
      • Personnel Plan (by month and annual): by team member (type, compensation) for current and projected short-term future (3-year forward)
      • Business Ratios (annual): profitability ratios (gross margin, return-on-sales, return-on-assets, return-on-investment), liquidity ratios (debt-to-equity, current ratio, working capital), for current and projected short-term future (3-year forward)
      • Break-Even Analysis (by month and annual): for current and short-term future (3-year forward)
      • Use of Funds (by month and annual): major areas (equipment, inventory, renovation, technology hardware & software, personnel, education & training, marketing, sales, partnerships, research & development/R&D)
      • Exit Strategy: acquisition (by another business, with names of some potential buyers), initial public offering/IPO, management buyout, family succession, liquidation
  • Support a loan application
    • Basic loans
      • Term loans (collateralized, typically 10-year)
      • Unsecured loans (borrower’s creditworthiness)
      • Acquisition loans (asset-specific)
    • Revolving credit loans
      • Credit lines
      • Credit cards
    • Complex loans
      • Self-liquidating loans (short-/intermediate term, repaid with money generated by asset purchased)
      • Asset-conversion loans (short-term, repaid by converting an asset such as inventory or receivables into cash)
      • Cash flow loans (for day-to-day cash flow needs, should be short-term/temporary)
      • Working capital loans (for day-to-day operations, such as clearing up accounts payable and paying wages & salaries, short-term)
      • Non-notification loans (with accounts receivable pledged as collateral)
      • Bridge loans (short-term interim financing/gap financing/swing loans to remove existing obligation till permanent financing is secured)
  • Support application for funding by loan alternatives
    • Factoring lenders (accounts receivables factored down, typically by 20% – 25% as the “reserve,” to receive 75% – 80% of their value)
    • Hedge Fund lenders (quick access money for higher risk businesses such as asset or technology-concept backed companies)
    • Peer-to-Peer lenders (family, friends, cause-supporting strangers)
    • Customer lenders (from within the community which a business serves)
    • Convertible Debt lenders (private placement and corporate bond investors, with unpaid balances of guaranteed interest-generating investments convertible into equity position holdings of the business)
    • Venture Capital lenders (people/companies with access to bank loans not previously available to the borrower business)
  • Support application for funding via SEC-regulated sources
    • Public Offerings (registered equity or debt securities public offerings)
    • Reg A Offerings (lower-threshold less-stringent registration-exempt equity or debt securities public offerings; Tier 1 up to $20 million in Year 1, Tier 2 up to $50 million in Year 1)
    • Reg D Offerings (registration-exempt private placement equity or debt securities offerings)
  • Define objectives and describe programs to achieve those objectives.
  • Evaluate a new product line, promotion, or expansion
  • Create a regular business review and course correction process
  • Define agreements between partners
  • Set a value on a business for sale or legal purposes
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