How can you tailoring the business plan template?

A BUSINESS PLAN TEMPLATE

The style, length and content of a business plan will depend on the business decision or activities the plan is designed to support and the audience for whom the plan is to be prepared. There are no hard and  fast  rules  as  to  length,  but  a  business  plan should be as short as possible while meeting all the needs of those who will read it. During the heyday of the dotcom boom, business plans were occasionally presented as “elevator pitches”: those with a business idea had as long as an elevator journey to convey the main thrust of their business plan. These days, as in pre-dotcom days, business plans are expected to be more substantial. A business   plan   for   a   small   and   straightforward    business may range from 20 to 40 pages, whereas a “beauty-parade” document may  run  to  over  500 pages once all the technical appendices have been included. In large organisations the format for business plans may be predefined, and in the case of tenders or beauty parades a structure may be provided as part of the “Request for tender” document.

On the next page is a template for a generic business plan. The headings used have been expanded to provide more insight into the contents of  each section. In  the  final  business  plan,  more succinct section headings would be used. It is unlikely that all the sections contained within the template will be relevant, but it may be necessary to include additional sections or subsections to reflect the peculiarities of a specific business.

A business plan template:

·         Executive summary

1.       Vision,  mission,  objectives  Current  state  of  the business Products and services

2.       Strategy  and  sources  of  sustainable  competitive advantage

3.       Customer acceptance Summary financial forecasts

4.       Money required, timing and deal on offer

·         Basic business information

1.       Title Contents

2.       Contact information Document Control Professional

3.       Advisers Definitions

4.       Legal structure and corporate data

·         Current business situation

1.       Definition of the current business and its market Corporate history, major events and past financial performance Current business and market position

2.       Core competencies

3.       Current business organisation and outline business infrastructure

·         Strategic analysis

1.       Political, economic, social and technological analysis

2.       and impacts Key differentiators and unique selling points

3.       VRIO analysis

4.       Core competencies Configuration of resources Value add analysis

5.       Value chain analysis

6.       Value System Resource audit Operations resources Human resources Organisational resources Financial Resources Industry life cycle Industry Structure Competitor analysis SWOT analysis

·         Strategic plan

1.       Vision, mission and objectives Sources of sustainable competitive advantage

2.       Competitive position

3.       Market Positioning

4.       Brand Strategy Portfolio Strategy Business design

·         Marketing plan

1.       Market segments, size and growth

2.       Description of customers and customer needs

3.       Target market segment Product positioning and value proposition

4.       Marketing mix

5.       Description of products and services

6.       Pricing and discounting

7.       Advertising and promotional plans

8.       Channel and distribution strategy

9.       Guarantees and warranties

10.   After-sales service and customer care Comparison with competition Performance and economics Marketing forecasts

·         Operations/production

1.       Physical location

2.       Make or buy considerations the production process Facilities, equipment and machinery

3.       Scalability of operations

4.       Engineering and design support

5.       Quality control plans

6.       Staffing requirements

7.       Sources of supply of key materials

·         Research and development

1.       Objectives

2.       Organisation

3.       Plans

4.       Resources

·         Management and organisation

1.       Organisation chart

2.       Top management

3.       Management’s ability to deliver the plan

4.       Corporate governance and shareholder control Staffing

5.       Recruitment

6.       Training

7.       Labour relations

8.       Office space and amenities

9.       Employment and related costs

·         Forecasts and financial data

1.       Summary of performance ratios Sales forecast

2.       Assumptions underpinning

3.       financial forecasts

4.       Profit and loss account (income statement) Balance sheet

5.       Cash flow statement

6.       Evaluation criteria and valuation

7.       Discounted cash flow Internal rate of return Payback

8.       Breakeven

9.       Return on investment

10.   Benchmarks

11.   Sensitivity analysis

·         Financing

1.       Summary of operations prior to financing Current shareholder loans outstanding Funds required and timing Use of proceeds The deal on offer

2.       Anticipated gearing and interest cover

3.       Expected returns

4.       Exit routes for investors

·         Risk analysis

1.       Risk Overview Limiting factors

2.       Critical success factors

3.       Alternative scenarios and strategic responses

4.       Specific risks and risk-reduction strategies

·         Business controls

1.       Information Technology

2.       Financial Sales and marketing Operations

3.       Other controls

·         Appendices

1.       Glossary of terms

2.       Details of market research Consultants’ reports Product Specifications Marketing Collateral Orders in hand Organisation charts Curricula vitae

3.       Detailed financial forecasts Technical data

4.       Details of patents, copyright

In tailoring the template to meet the specific needs of the project or business being presented, the following questions should be asked:

1.       What is the ultimate objective of preparing the business plan?

2.       How  will  the  business  plan  be  used  and  by whom?

3.       To  what  level   of  detail  should  the  plan  be prepared: will the plan be used to examine high- level strategic issues or for actually running the business?

4.       What is the scope of the business plan: does it relate     to   the   entire   business,   a   division   or geographic region or just a product or service?

5.       For what time period should the business plan be prepared?

6.       Should the financial projections within the plan be prepared on a monthly, quarterly or annual basis or some combination, for example monthly for the first two years and quarterly thereafter?

LAYOUT AND STYLE

In large organisations, the layout of the document may be prescribed by the company’s approval process; in others, although ultimately the contents  of  the  plan  are  critical,  the  document  should be attractive, impressive and as easy to read as  possible.

General appearance:

The plan should have a hard front and back cover   to   prevent   the   pages   from   becoming damaged. The cover should be simple and pleasing to  the  eye,  featuring  the  business  logo  (if  one exists),  the  name  of  the  business,  the  date  and some basic contact details. In the case of large business plans, dividers can be used to make the contents of the document more accessible.

The document should be securely bound; comb or ring binders work well and ensure that the document can be read easily when placed flat on a table. The plan should be printed on good-quality paper  using  a  good-quality  printer.  Plain  white paper is usually best, especially if colour diagrams are  to  be  included.  Each  page  should  follow  a standard layout with clear, easy-to-follow headings and subsection headings. Each new section should begin on a fresh page. Diagrams should be used where they help to convey an important message or a complex subject more clearly.

·         Page layout

The  layout  of  the  page  should  be  consistent with size of paper being used. The standard office document size in the UK is A4 (297mm x 210mm). In the United States, the standard is 280mm x 216mm. For a business plan aimed at both sides of the Atlantic,  make  the  design  and  layout  work  to

280mm x 216mm. The page should be laid out to avoid presenting the reader with too much dense text; allowing adequate space between lines   and paragraphs will help make the page less intimidating. The choice of font is a matter of personal preference or may be dictated in a larger business by the “house style”.

The chosen font should be clear and easy to read such as Times New Roman or Arial. The size of the font is important: nothing smaller than 10 points should be used for the main body of the text; 12 points is probably the ideal. If the pages are to be printed only on one side, there should be a larger margin on the left-hand side to allow for binding because once the document has been bound the text should appear to be centrally positioned on the bound  page.  If  the  document  is  to  be  printed double sided, larger margins will be required on the left-hand side of the facing page and the right-hand side of the underside to ensure that the text is consistently aligned.

A simple and clear structure for headings and subheadings should be used throughout the document. If  there  are  more  than  four  levels  of headings and  subheadings, the  document  rapidly becomes unwieldy and difficult to follow: three levels or fewer are ideal. Each heading should be numbered and the numbers should be based on the current section, as this will make editing the section easier. The use of capital letters in headings – including headings for charts and diagrams, which may be prepared using a different software package – should also be consistent. Where figures, charts and graphs are used, all axes should be clearly labelled and  all  units  of  measurement should be consistently and clearly stated. If appropriate, the sources for any data should also be  included.

Headers  and  footers  can  be  used  to  convey additional pieces of information, which are valuable for the purposes of editing, reviewing and version control. Information that is useful to place in a header or footer  includes:

1.       Document title

2.       Date

3.       Page number

4.       File name

5.       A confidentiality messages

6.       Copyright

7.       Writing style

A clear and concise writing style is crucial. Readers  will   not   appreciate  the   brilliance   and lucidity of an idea if it is described in a clumsy and convoluted manner. Sentences and paragraphs should be kept short and precise. The opening sentence or paragraph should make the writer’s point. The writer should think carefully about the point he wishes to make and then should make it as simply and succinctly as possible. The main body of text should then provide evidence or arguments to support  the  writer’s  position  before  finally repeating, expanding or refining the statement. The same structure should be applied to the document as a whole and throughout each section of the document.  The  Economist  Style  Guide  contains many useful tips.

·         Page set-up

On  the  opposite  page  is  an  example  of  a business plan page. It  was prepared in Microsoft Word and utilises  a  number of  useful formatting functions.