THE BUSINESS PLAN FORMAT

In reality there is no standard format for the presentation of a good business plan. Business plans
vary in content and size according to the nature and size of the business concerned and on the
emphasis that is placed on certain critical areas as opposed to others.

THE CONTENTS

Every business plan should address a number of fundamental issues without which it would not be
complete. These issues can be grouped under six major areas that are the pillars of every business
activity whether large or small. These are:

 Sales and Marketing

 Operations
 Human Resources
 Finance
 Information & Communication Technologies (ICT)
 Information Management

ESSENTIAL CONTENTS OF A BUSINESS PLAN IN A SIMPLE FORMAT

The table below lists the important elements of a business plan and offers some simple points that
need to be taken into consideration in regard to each section. It is worth noting that these points are
by no means exhaustive and are meant to serve only as examples. The table is intended to provide
you with a simple format upon which to base your business plan.

The format provides you with a framework for presenting your thoughts, ideas and strategies in a
logical, consistent and coherent manner. In other words the business plan format helps you to clarify
your own ideas and present them clearly to others.

1. Executive Summary
2. Enterprise Description
3. Product or Service Description
4. Industry Analysis
5. Competition Analysis
6. Swot Analysis
7. Marketing Sub-Plan
8. Operations Sub-Plan
9. Human Resources Sub-Plan
 10. The Budget
11. Liquidity
12. Financial Sub-Plan
13. Selected Options and Critical Measures
14. Milestone Schedule

1. EXECUTIVE SUMMARY

This section is a brief overview of the whole Business Plan.

 Description of Business: Provide some information about the product or service you wish to
offer.
 The Market: What markets do you intend to target?
 Growth Potential: What is the potential for your business? (What do you hope to achieve in
one to three years’ time?)
 Sales & Profit Forecast: Give a summary of the sales and profit forecast figures (for the next
three years).
 Financial Requirements: How much money would you requirements 

1. To start the business.

2. To sustain your business during the first three years.

 Utilisation of Finances: What will the loan/overdraft/investment be used for?

 Where will you source your funding from: Loan, Bank Overdraft, Personal funds?
 Repayment of Loans: How long do you expect the loan repayment period to be?
 List of Critical Issues for the Success of the Project: Present a list of the critical success
factors most likely to affect your project.
 Assistance required: What assistance would you require to help you launch your project?

2. ENTERPRISE DESCRIPTION

It is important that you demonstrate a clear understanding of the business you would like to be in.
You should also explain your business concept and the reasons why you think it will be a success.

 Provide an overview of your business idea

 What inspired you to choose this line of business?
 What personal qualities and experience will you invest in the business?
 In what way is your concept innovative? What are you offering that other businesses do not
offer already?
  Do you believe there is a real need for your product or service?
 Where do you see your business in the medium and long term?

3. PRODUCT OR SERVICE DESCRIPTION

This section helps you to think about your product or service which reflects on your ability to
understand and cater for your clients’ expectations.

 Provide a detailed description of your product or service.

 What innovative features does your product or service offer?
 How does your product or service distinguish itself from other products or services already
existing on the market?
 Can you list three unique selling points offered by your product or service?
 How will your product or service satisfy client needs and expectations?

4. INDUSTRY ANALYSIS

This section helps you to understand the industrial environment you intend to work in and through it
you can identify important changes that are likely to take place in your market.

 How big is the sector you will be operating in?

 How many companies already operate in this sector?
 What are the general sector trends? Is it growing, static or slowing down?
 Can you perceive any important changes in this sector?
 How can these changes affect your business?
 Are you aware of any Political, Economic, Social, Technological, Legislative or Environmental
changes that could seriously affect your business in the medium or long term? This is known
as the PESTLE analysis.
 How desirable do you consider this sector to be for new, local entrants and from other areas?

5. COMPETITION ANALYSIS

In order to compete successfully in any business you need to know your competitors. It is useful to
study how and why they achieve success. Also you need to be aware of their failures to avoid
committing the same errors.

 
 Who are your most important competitors?
 What are their main strengths and weaknesses?
 How can you be different?
 How can your product or service be more competitive?
 What are your competitors’ pricing policies? How do these affect your sales strategies?
 Can you list your main competitors and their estimated market share?
6. SWOT ANALYSIS

This section enables you to look closely at the internal strengths and weaknesses of your business,
and to identify external threats and potential opportunities.

S  = Strengths
W = Weaknesses
O  = Opportunities
T  = Threats

Strengths
Provide a list of your core competencies that give your product or service certain advantages.
(Example: High quality, competitive pricing, customer care)

Weaknesses
Given the necessary resources, which areas of your business would you need to improve? 
(Example: Lack of funds, lack of management skills, unskilled workforce)

Opportunities
Given the right conditions, which business opportunities can you identify for growth and greater
profitability? 
(Example: New markets, export potential, joint venture proposal)

Threats
Think about possible factors which could adversely affect your business in the future. 
(Example: Imported products, new entrants, political and economic changes)

7. MARKETING SUB-PLAN

It is no use having the greatest product in the world if you cannot sell it.

This section focuses on your potential customers and allows you to see whether your products can
satisfy their needs.

The Product

 List three important features that make your product or service worth having. Example:
design, functionality, reliability.
 List three features where you think your product or service could be improved.
 Can you list three major competitors that offer similar products or services to yours? Can you
identify differences between your product and theirs?
  In what aspects can your product or service be described as innovative?
 What image do you want to project with your product or service?
 Do you have any plans to add more products or services to your current portfolio?

 
The Customer

 
 Will your business depend on one main customer or will you sell to a wide variety of
customers?
 If you plan to sell to a wide variety of customers, list five types of customers that are likely to
buy your product or service.
 Do you plan to have a uniform approach to all customer groups or will you vary your
strategies accordingly?
 What measures will you employ to identify customer requirements with regard to your
product or service?
 How do you plan to collect customer feedback in order to ensure that your product or
service has a high degree of customer satisfaction?

 
The Place

 
Where do you plan to sell your product or service?

1. Directly from the factory

2. From a showroom
3. E-Commerce
4. Other (give details)
5.
 How easy will it be for your customers to gain access to your products or services? Give
details.
 If you feel that customers will find it difficult to access your products, can you suggest ways
of improving the situation?
 Mention three ways in which your competitors facilitate access to their products or services
for their customers.
 How do you plan to get the product to the market?

1. Distribute the product yourself?

2. Employ full/part-time salesmen?
3. Enter into a distribution agreement with third parties?
4. Online sales

 
The Method

 
What methods of advertising do you intend to use for your product or service?

1. Newspapers and magazines

2. Television
3. Radio
4. Sponsorships
5. Internet (websites, e-newsletters, search engine optimization)
6. Other (specify)

 If you intend to use any of the media mentioned above, which do you rate as the most
effective and why?
 How do your competitors advertise their products? Do you think their methods are effective?
 How will you price your products? Explain the reasons behind your pricing strategies.
 How will your prices compare with those of your competitors?
 Do you intend to give your customers credit? Explain the reasons behind your decision

8. OPERATIONS SUB-PLAN

This section helps you to look at your internal operations in detail to see if your business can be run
efficiently and effectively. It draws attention to your team and allows you to develop strategies for
good and effective management.

 Do you already have business premises or are you planning to buy/lease/rent them in the
near future?
 Give details of your business location and premises
 How long and how well will the present premises (if any) meet your business needs?
 Are the business premises you have identified easily accessible to your clients?
 Give details of equipment/machinery/vehicles you will require to operate your business (such
as purpose, current value and future replacement date)
 Give details of equipment/other items which you plan to acquire or lease in the near future
(such as purpose, costs and credit terms)
 Make up a list of your main suppliers and their credit terms
 Plan on contingency suppliers in case of emergencies
 Do you intend to operate a quality management system of any sort? Are you planning to
apply for quality certification?

1. What type of quality system?

2. Who will take charge of implementing it?
3. What are the timings for its introduction?

 Ensure you are conformant with Health and Safety and/or Environmental regulations relevant
to your business
9. HUMAN RESOURCES SUB-PLAN

People are the greatest resource of any business venture. This section focuses your attention on your
work force, their training needs as well as their material needs in terms of health & safety,
professional development, job satisfaction and remuneration.

 
 Describe your Management Structure (If you do not have a management structure, list those
people who can assist you with the running of the business).
 How many people do you plan to employ? (Full Time / Part Time)
 What types of skills and/or experience are you looking for?
 What training will your work force require to be able to meet your future plans?
 What measures do you plan to adopt to ensure employee loyalty?
 How soon do you think you will need to expand your work force?
 Plan you own development and that of your management team as your business continues
to expand.

10. THE BUDGET

The budget provides the financial planning detail for every aspect of the business e.g. employee
costs, rent, IT investments, machinery costs, sales value , direct material costs, shipping and freight
charges, etc. The ultimate target that should result from the budget is the budgeted net profit. It is a
key tool for operating the business, and by facilitating comparison of actual performance versus
budgeted performance, it highlights the operating VARIANCES to management.

The budgeted net profit, after taxation, when expressed as a percentage of the net investment in the
business, gives the Return On Investment - ROI - the single most important piece of financial data
and the reason for being in business in the first place.

 Prepare a detailed budget

 Plan periodical reviews of actual performance against budget
 Prepare a corrective action plan for the variances that will inevitably occur
 Set the basis for the Return on Investment you wish the business to give you

11. LIQUIDITY

Liquidity is fundamental to every business in relation to being able to trade and meet obligations.

Management monitors the risks in liquidity by tracking cash movements with a Cash Flow Forecast
ensuring adequate cash or facilities to raise money to carry out the business.

 How will you keep control of your cash flow?

 How will you finance the changes you may need to make in your business?

12. FINANCIAL SUB-PLAN

Business is all about the management of products, services and money. To enable management to
do their job, the tool they need is management information.

Information relating to business performance is transmitted via management accounts. These are
therefore a very powerful and essential reporting mechanism requiring high priority attention.
Successful businessmen understand how money works but need to have the information to support
the decision making.

Calculate the break-even point of your business and how soon you can reach it. Take into
consideration all the costs involved:

1. Direct Costs are generally straight forward to identify as they relate specifically to a product:
e.g. labor, material and shipping costs.
2.
3. Indirect costs, for example rent and service charges, need to be included in the
general overheads and a proportion of those general overheads will need to be added to the
cost of each product to arrive at its true cost. The principle is that overheads also need to be
covered and therefore “the overhead recoupment cost” is an important financial that needs to
be kept up to date to make sure that your sales prices cover all the costs of running the
business.

 Give amount of overdraft / funds needed as shown in cash flow forecast.

 Can you offer any security to support your financial requirements?
 Over what period will loan/overdraft be repaid and are these repayments included in the
cash flow forecast?
 How much do you and your partners plan to invest in the business?
 Do you have access to other sources of funds? Give details if any.
 Do you have any contingency plans if your sales turn out to be lower or the costs higher than
your forecast?
 Have you taken account of tax consideration in your calculations?
13. SELECTED OPTIONS AND CRITICAL MEASURES

Following a careful analysis of your business you should now be in a position to make a list of logical
options open to you.

Once the options have been identified, you should be in a position to list a number of critical
measures that need to be implemented in line with the options you have selected.

Now that you have carried out a systematic analysis of your project, you should be in a position to
look at your options in a more formal manner. Consider your options very carefully and seek advice
in order to be in a position to draw up a list of critical measures you need to implement in order to
launch your project. These measures should also indicate what kind of assistance (technical and
financial) you require to get started. As a result of the analysis carried out in the preceding sections
make a list of the critical measures you need to carry out, such as:

 
 Look into energy savings efficiencies on machinery
 Apply for ISO certification
 Invest in training for management
 Invest in training for employees
 Employ new staff
 Carry out market research
 Invest in Information Technology Systems
 Seek new premises
 Seek foreign partners
 Look for new market segments
 Others

14. MILESTONE SCHEDULE

This is a list of all the critical measures that are mentioned in the Business Plan. When implemented,
the measures in the milestone schedule will help your enterprise become more efficient.

At this stage, after having gone through the Business Planning Process, you should be in a much
better position to identify and prioritize your needs in line with the realities of your business venture. 
Once you have identified the critical measures, you should plan their implementation over a three
year period. Base your decisions on the information provided by your Business Plan. When
implemented, the critical measures in the milestone schedule will help your enterprise become more
competitive. The milestone schedule should include:

 The type of assistance required (based on the critical measures)

  The date of implementation of these measures
 The cost of implementing such measures
 Other information specific to the business that needs to be monitored at a glance

THE MILESTONE SCHEDULE

The table below is a sample Milestone Schedule. The information given within is by no means
exhaustive and is only meant to serve as an example.

Milestone Schedule (Example)

ASSISTANCE REQUIRED DATE OF IMPLEMENTATION COST 

Operations

ISO Certification January - May 10,000

Health & Safety Standards February 3,000

IT Systems March - April 8,000

Payroll System May 3,000

New Machinery January 11,000

Human Resources

Consultancy January - May  5,000

March - May

Employ New Staff September 1,000

Management Training February 800

Overseas Training April 1,500

February 2,000
 November 1,500

Export Marketing

Market Survey March - July 4,000

Enhance Product for Export July - October 4,500

Promote Product (Abroad) November 6,000

Participate in Fairs (Abroad) May 2,500