How to structure your business plan?
All entrepreneurs will tell you that writing a business plan can often be a tedious exercise. To help you do it, here is a standard template that you can follow step-by-step and adapt to your specific project.
As there are various ways to present your business plan, the template presented here is intended to be relatively comprehensive. It is up to you to delete anything superfluous, change the order and fill in what makes sense for your project, preferably with expert help.
When you embark on this exercise, remember that the contents of a business plan should present all the aspects (human, strategic, financial and technical) of your project and be based on verifiable information and realistic assumptions.
Section 1: the executive summary
To be completed last, this first section presents a summary of your value proposition (which makes you unique), your objectives and how you will reach them in the most convincing way possible. It should conclude with a precise description of what you are expecting from the person to whom you are submitting your business plan.
This section is essential for capturing attention! This is the section that will determine whether your business contact will or will not take the time to read the remainder of the document. Take great care over it and do not beat about the bush.
Section 2: presenting the business
In this section, provide detailed information on your business, its objectives and its human assets. This includes:
- the company name and legal form chosen;
- the share capital;
- the mission, related objectives and value proposition;
- the historical background, i.e. the origins of the project/company;
- the organisation chart;
- the human assets and key people (shareholders, management and staff);
- the applicable tax regime;
- useful contacts.
Section 3: products and services
Under this heading, you present your products and services and their value added for the identified target groups. If your offering is still at the project stage, remember to provide details of your objectives and how you expect to achieve them in order to deliver products and services in line with your value proposition.
Also remember to mention future updates and enhancements to your solutions in order to meet your clients’ requirements. This demonstrates that your project is substantial and viable.
Section 4: the market and the competition
To be credible, you need to demonstrate that you know your market, its potential and how it is likely to change. Also include in this section an analysis of your competitors together with details of their offering. Lastly, determine who precisely the target customers are and mention your existing customers, if any, as well as any commitments to any of them.
Section 5: marketing and sales
Depending on the complexity of your business and your market, this can be a challenging section. It is, however, essential to convince your business contacts that you are able to move on from the concept to actual sales. In this section, focus mainly on the following aspects:
- brief summary of the target market segment and related target groups;
- target market share and expected turnover;
- launch, distribution and sales strategy;
- pricing policy;
- marketing, public relations, media relations, social networking strategy, etc.
Section 6: action plan
This section covers (e.g. in the form of a schedule) the major stages of launching your business and the associated deliverables and planned implementation costs for each of these stages.
Section 7: risk analysis
While your business contacts may pay close attention to your strengths and opportunities, they look even more closely at your project’s risks or even its weaknesses. Do not let them discover your challenges by themselves; maintain control by preparing this SWOT analysis yourself, focusing in particular on:
- internal risks (organisational, management-related, logistics, etc.);
- external risks (increases in marketing, product, competitive and legal costs, etc.);
- potential safety issues (high-risk occupations, environmental risks, etc.);
- probable barriers to market entry (political, economic, administrative and cultural barriers, etc.).
Section 8: the financing plan
In a business plan, the question of business finance is key. This section will therefore be examined very closely by most of your business contacts. The overall concept, day-to-day financial management, expected balance sheet and profit & loss account, cash-flow plan, sureties, deposit statement, property valuation, current lease or loan agreements: it should all be in there!
Here is one proposal among many as to how to structure this section:
1. The initial financing plan, i.e. the sustainable requirements and resources needed to be able to launch your project:
- the formation expenses (deeds, studies, consultancy, etc.);
- the acquisition of (financial or (in)tangible) assets and the related depreciation;
- the cost of alterations and improvements to the premises, IT equipment, etc.;
- the working capital requirements (current assets and liabilities);
- the resources available (contribution of personal funds, government aid, bank funding, etc.).
2. The profit & loss account which records the expenses and income for the early years of your business if already launched. Be careful to show a clear distinction between fixed overheads and variable costs.
3. The projected cash flow which shows, on a monthly basis, all cash inflows and outflows in the first year of operation. This makes it possible to verify whether you have sufficient cash to meet your payment deadlines.
4. The financing plan over a minimum of three years, i.e. the “standard” spreadsheet showing the financial requirements and the resources to meet them and to finance both your operating cycle and investments. This plan should be drawn up on the basis of points 1 to 3 and your basic assumptions. It should show the breakeven point and the theoretical point at which it is reached.
Section 9: the appendices
This section contains all the additional information, the sources to check your analyses and the various certificates needed to help understand the status of the project and its potential success.
So, all that’s left to say is… Good luck!