Guide on How to Write a Viable Business Plan

Writing a Business Plan Business plans are considered the resumes of businesses. They give a clear description of what your company offers, how much profit is expected, how the business operates, as well as how soon these goals will be met. If you want to start a business, you need to write a business plan, as no financial institution will ever make the mistake of approving a business loan without going through the blueprint of success. There are free business plan templates on the Internet today. You can also buy book references at local bookstores. A sample business plan is generally enough to give you all the important details you need as a prospective business owner. To help you get started, below is a quick outline of how a business plan should be written.

Sample Business Plans

A template refers to the standardized document that contains the basic layout of a business plan, where additional details may be added to customize for specific use. A business plan template is basically an outline that will serve as your guide on making your own, adding information regarding your company and making a distinctive presentation. All business plans must include these sub-headings:

• Executive summary – The opening section of the business plan must include introductory information about your business, such as names of the owners, date started, employee accounting, as well as a comprehensive description of the premises. It must also include a summary of the rest of the document, as the executive summary is oftentimes the only section people read in great detail. You need to briefly describe the service or product your business offers, the description of your advertising approach, startup money, other financial requirements, expected sales numbers, and selling successes to date, if any.

• Company overview – Each segment of the summary should contain as much information as possible. You must include detailed biographies of each principal owner, especially if they relate to the industry where your business will operate. Explain the industry and its current financial condition and future expectations. Thoroughly describe new developments and products that will either negatively or positively affect the position of your business in the industry. Make sure that you also include any innovation that you introduce in your business. List your client base, include the names of your target customers, and describe how you’ll get their attention.

• Market analysis – In this section, expound on the items stated in the company overview. Come up with an accurate estimate of the current size of the market you wish to enter (when and how it is expected to develop and grow), the trends that affect your operation, the direct and indirect competitors of your business, the prices of your services or goods, and the strategies you have come up with to enter your target market. This is also the section that will include the list of your vendors or suppliers. You can also incorporate a testimonial or a feedback for each supplier if possible.

• Sales strategy – Provide all necessary information pertaining to both sales and marketing, including descriptions for your ad materials, type of marketing methods you wish to use, and how you intend to deliver and sell your service or product to customers. Also include a projection of sales for the first eight to twelve business quarters.

• Operations plan – Describe your business location in detail and give an example of what each staff member is expected to perform on a daily basis. List the equipment you have and don’t have. Also include sources and prices. Outline your inventory tracking methods, and detail the processes you intend to follow to track purchases, sales, as well as customer satisfaction.

• Management plan – Create a list of personnel you need and identify the costs associated with maintaining a certain level of service. Describe your hiring methods and the skills each employee must have in order to fulfill their jobs properly. Mention all the benefits you offer, give a summary of their costs, and include a copy of employee policies and procedures.

• Financial information – This is one of the most important sections of a business plan. Include profit-and-loss statements, the evaluation of the money you need to earn break even, and the figures that move into profitability. Come up with a list of sources and uses of funds. Also include a cash flow projection. Provide an explanation where the money will go – equipment, real estate, personnel, inventory, or capital – as well as your exit strategy. This information will be used by anyone who wants to invest in your business.

Business Plan – Purpose and Objectives

A detailed description of a new or existing business, including the company’s product or service, marketing plan, financial statements and projections and management principles, require a plan to be implemented. A document that spells out a company’s expected course of action for a specified period usually includes a detailed listing and analysis of risks and uncertainties. For the small business, it should examine the proposed products, the market, the industry, the management policies, the marketing policies, production needs and financial needs. Frequently, it is used as a prospectus for potential investors and lenders.

Think of it as a production line. What’s go in the start are raw materials and unfinished assemblies. Here, the raw materials include:

-Talent and initiative from employees

-Capital -Market position

-The company’s creditworthiness

-The firm’s earning capacity

-Assessment of changes in the marketplace.

It should have four major aspects:

- Its contribution to purpose and objectives

- Its primacy among the manager’s tasks

- Its pervasiveness

- The efficiency of resulting plans.

The Contribution of Planning to Purpose and Objectives: Every plan and all its supporting plans should contribute to the accomplishment of the purpose and objectives of the enterprise.

The Primacy of Planning Manager must plan in such a way that it leads to proper organizing, staffing, leading and controlling which support the accomplishment of enterprise objectives. Planning and controlling are inseparable. Any attempt to control without a plan is meaningless, since there is no way for people to tell whether they are going where they want to go. Plans thus furnish the standards of control.

The Pervasiveness of Planning: Planning is a function of all managers, which vary with each manager’s authority and with the nature of the policies and plans assigned by superiors. If managers are not allowed to a certain degree of discretion and planning responsibility, they are not truly managers.

The Efficiency of Plans: The effectiveness of plan refers to its contribution to the purpose and objectives. Plan is efficient if it achieves its purpose at a reasonable cost, when cost is measured not only in terms of time or money or production but also in the degree of individual and group satisfaction.

Procedures: Procedures are plans that establish a required method of handling future activities. They are chronological sequences of required actions. They are guides to action rather than to thinking and they detail the exact manner in which certain activities must be accomplished.

Rules: Rules are unlike procedures in that they guide action without specifying a time sequence. In fact, a procedure might be looked upon as a sequence of rules. Rule may be a part of procedure.

Programs: Programs are a complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action; further supported by budgets.

Budgets: Budget is a statement of expected results expressed in numerical terms. Financial operating budget is often called a “profit plan”. This budget can be expressed in financial terms, in terms of labor- hours, units of product or machine hours or in any other numerically measurable term.

Steps in Planning: Being aware of opportunities, a manager should take a preliminary look at possible future opportunities and see them clearly and completely know where they stand in light of their strengths and weaknesses, understand what problems they wish to solve, and why and know what they expect to gain. Planning requires a realistic diagnosis of the opportunity situation.

Establishing objectives: This is to be done for the long term as well as for the short term. Objectives specify the expected results and indicate the end points of what is to be done, where the primary emphasis is to be placed and what is to be accomplished by the network of strategies, policies, procedures, rules, budgets and programs. Objectives form a hierarchy.

Developing premises: There are assumptions about the environment in which the plan is to be carried out. It is important for all managers involved in planning to agree on the premises. Forecasting is important in premising: what kind of markets will there be? What volume of sales? What prices? What products? What technical developments? What costs? What wage rates? What tax rates and policies? What new plans? How will expansion be financed? What are the long-term trends? Because the future is so complex, it would not be profitable or realistic to make assumption about every detail of the future environment of a plan.

Determining alternative courses: The more common problem is not finding alternatives but reducing the number of alternatives so that the most promising may be analyzed. The planner must usually make a preliminary examination to discover the most fruitful possibilities.

Evaluating alternative courses: From the various alternatives available proper evaluation should be done which may involve ash flow.

Selecting a course: The best alternative should be selected.