Unit 4 Business Plan Summary

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BUSINESS PLAN
Planning Your Business: Why Do I Need a Business Plan?
A business plan is a valuable tool for every business owner, whether you are starting up, have
been in business for years, or are ready to grow.
Think of your business plan as a sales document. It must convince readers that your venture has
the potential to be successful. Your enthusiasm, dedication and confidence in the project should
be evident to the reader. Avoid highly technical terms and diagrams that the reader may not be
familiar with. You will want to write the plan as if the reader is not familiar with the type of
business you are starting.
The most effective business plans are dynamic documents that evolve as your business grows
and changes. Your plan should reflect the current reality of your business, the environment in
which it operates, and your present and future goals.
If you're starting a business, a business plan can help you:
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Turn your ideas and capital into a viable business
Secure financing from lenders and investors
Identify strengths, weaknesses, opportunities, and threats
Although business plans vary in terms of length and scope, all successful business plans contain
common elements. The plan should take into consideration your particular business and its
environment. Here are some sections that you may want to include in your business plan:
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Your Business Plan Can and Should Include Most of These Categories
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Executive Summary
Business Strategy
Marketing Strategy
Operational Plan
SWOT Analysis
Human Resources Plan
Social Responsibility
E-Business
Financial Forecasts and Other Information
Additional Resources
1. Executive summary
The executive summary is an overview of the key points contained in your business plan and is
often considered the most important section. It is usually the first section that a potential investor
or lender will read, and may be the only section to be read if it is not prepared properly. This
important summary should:
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Include highlights from each of the other sections to explain the basics of your business
Be sufficiently interesting to motivate the reader to continue reading the rest of your
business plan
Be short and concise - no more than two pages long
You will want to describe your business concept, competitive advantage, legal structure (e.g.
sole proprietorship, corporation), the market, and your own experience.
Although the executive summary is the first section of the plan, you should write it last.
2. Business Strategy
This section should briefly but clearly describe what your business is all about. This segment
should include the following elements:
Introduction
This section should give readers a very brief overview of your business – where you've been,
where you are now, and where you're going in the future. Include:
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A short history of your business – is it a new business venture, are you purchasing an
existing business, or are you expanding an existing business?
The purpose of your business – discuss your vision and the main objectives of your
business
A description of your products and services – what will you offer?
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Your business' legal structure – are you a sole proprietorship, a partnership, a
corporation, or a cooperative?
Current Position
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Your current position – what stage of the business lifecycle is your organization in?
Your industry – is it growing, stable, or contracting?
Your achievements – what have you achieved so far?
Competitive Advantage
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Your competitive advantage – what is your advantage over the competition (e.g.
innovative products, strong business model, appeal to niche markets)?
Your competitors – who are they and what are their strengths and weaknesses?
Your business model – why is it effective?
Growth Plan
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Growth timeline – where do you see your business in a year from now? Three to five
years down the road?
Milestones – what objectives have you set for your business and when do you expect to
achieve them?
Goals – what are your short-term (the upcoming year) and long-term (the next 3-5 years)
goals?
You should also include the date the business was registered/incorporated, the name of the
business, its address, and all contact information.
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Corporation, Partnership, or Sole Proprietorship?
Find out which type of business structure is right for your business.
Benchmarking: How does your business measure up to others that are similar to yours?
Benchmarking allows you to evaluate your performance and ensure that your business is
operating at an optimum level.
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Planning for Business Growth
You've decided it's time to expand, but there's plenty to consider before you begin. These
resources can help you make sound decisions that work for your business.
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Ways to Grow Your Business
Explore various business activities that could help you expand and grow your business.
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3. Marketing Strategy
Describe the activities you will use to promote and sell your product or service. You should
touch on each of the “four Ps” of the marketing mix:
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Product – how does your product or service meet the needs of your target market?
Price – how much will you charge for your product or service and why?
Place – how are you going to get your product to your customers?
Promotion – how will you connect with your target market?
Your marketing strategy should also include information about your budget – how much money
have you budgeted for marketing and sales costs?
You may also want to include a profile of your "ideal customers". You can create profiles based
on customer type – consumers, retailers, or wholesalers – or base your segments on demographic
information such as age, location, and income level.
Keep in mind that solid market research is the backbone of an effective marketing strategy. You
will want to back up your statements with facts – explain how you reached your conclusions and
include statistics from reliable sources.
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Marketing Basics
Brush up on key marketing concepts, learn how to develop a marketing plan, and assess
strategic marketing options for your company.
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Guide to Market Research and Analysis
Discover how market research can help your business succeed and learn how to conduct a
variety of market research activities.
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4. Operational Plan
Your business plan should outline your current operational requirements as well as your
projected requirements for the next three to five years. Your inventory management and
accounting systems should have the ability to produce up-to-date reports.
You can include:
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Day-to-day operations – provide a general description of the day-to-day operations of the
business, such as hours of operation, seasonality of business, suppliers and their credit
terms, and so on.
Facility requirements – identify your requirements in terms of size and location. Include
any related documents in the appendix of your business plan, such as lease agreements or
supplier quotations. Detail any special requirements associated with the facility and
include any licensing documentation in your appendix.
Management information systems – indicate how you plan to control stock, manage
accounts, control quality and track your customers.
Information technology (IT) requirements – identify the IT systems you will be using for
your business. As this is a key factor for most businesses, indicate if you are using a
consultant or IT support service and outline any planned IT developments.
You may also want to include your operations manual as an appendix to your business plan.
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Day-to-day operations
Find out how you can structure your business, manage production processes and avoid
risks.
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5. SWOT ANALYSIS: (Strengths, weaknesses,
opportunities and threats analysis of your Business).
Conducting a SWOT analysis is an important part of business planning. A properly prepared
SWOT analysis shows investors that you have realistically and objectively considered these
elements.
Banks and other lenders understand that businesses will encounter difficulties at some point, and
want to know how you will deal with these challenges. Remember that overestimating strengths
and opportunities or ignoring potential problems will undermine your credibility.
Putting time and effort into conducting a comprehensive SWOT analysis can help you:
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Make sound decisions and future plans
Anticipate problems and make the necessary changes
Set aside resources to take advantage of potential opportunities
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Assessing your business' health
A periodic business health assessment should be a staple of your ongoing business
planning cycle.
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Identify Opportunities Arising From Your Current Business
Are you sitting on a golden opportunity for growth? Your current operations may be
more fruitful than you think.
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6. Human Resources Plan
This section addresses how you plan to manage your employees and human resources processes.
You should also discuss your short-term and long-term plans for employee recruitment, training,
and retention. If appropriate, discuss any advisors, mentors, consultants that offer you support.
You may want to include:
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A brief organizational layout or chart of the business
Who does what, with a brief job description of each position
The essential skills required for each position
Information on your employee training program
Any other relevant information related to personnel (e.g. gaps in your team, training
budget)
Don't underestimate the importance of this part of your plan. Investors need to know that you and
your staff have the necessary balance of skills, drive and experience to enable your business to
succeed. It is also advisable to outline any recruitment or training plans, including timelines and
costs.
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Business Support Organizations
You don't become an expert business manager overnight. Seeking the advice of peers,
professional business counselors and coaches can help you transition from new business
owner to experienced entrepreneur.
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Managing Employees
Learn how to measure your employees' performance on the job, to help them understand
what is expected of them and to deal with performance problems.
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Develop Your Management Team
Find out the processes and methods you will need to set up your management team.
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7. Social Responsibility Strategy
Implementing good environmental and social practices is good business – it can give you a
competitive advantage and help foster goodwill toward your business. In this section you should
discuss ways in which your business honors ethical values and respects people, your community,
and the environment.
You may want to include information about:
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Your company's environmental policies and initiatives
Your company's contributions to your community
Relevant certifications such as fair-trade certification, organic certification, or Leadership
in Energy and Environmental Design (LEED) certification
8. E-business Strategy
Effectively using information technology is an important part of managing a business. In this
section, you should outline how you plan to use internet technologies to reach customers,
manage your business, and reduce costs. You should include information about:
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E-commerce activities (selling your product or service online)
Website development
Hardware and software requirements
Relationships with external information technology specialists
Keep in mind that implementing e-business strategies can save money – if this is the case for
you, you may want to highlight potential savings in this section.
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9. Financial Forecasts and Other Information
This section of your business plan essentially turns your plans into numbers. As part of any
business plan, you will need to provide financial projections for your business. Your forecasts
should run for the next three to five years. However, the first 12 months' forecasts should have
the most detail, including assumptions both in terms of costs and revenues, so investors can
clearly see your thinking behind the numbers.
As you put your plans down on paper, remember the importance of thinking objectively.
Analyzing your venture from three points of view – optimistic, pessimistic, and realistic – can
give you a solid idea of what to expect as you move forward.
Your financial forecasts should include:
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Cash flow statements – this is a cash balance and monthly cash flow pattern for the first
12-18 months. Include working capital, salaries and sales.
Profit and loss forecast – this is the level of profit you expect to make, given your
projected sales, the costs of providing goods and services, and your overhead costs.
Sales forecast – this is the amount of money you expect from sales of your product and/or
service.
Things to consider:
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How much capital do you need, if you are seeking external funding?
What security can you offer to lenders?
How do you plan to repay any borrowings?
What are your sources of revenue and income?
Your forecasts should cover a range of scenarios, and you should include the contingency
plans you've developed to offset any risks. You can also review benchmarks and averages
for your type of business and discuss your business' position.
10. Additional Resources
You'll want to thoroughly review your plan once it's done. Try to avoid using jargon – the person
reading your plan may not understand your businesses as well as you do. You can ask friends,
family, associates, and mentors to review it. Don't be afraid to seek advice from professionals
such as lawyers and accountants. You may also want to consider hiring a professional proofreader to check for errors.
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Financing Your Business
Entrepreneurs often report that getting financing is the most challenging aspect of starting or
growing a business. If you are looking for money for your business, you should start by learning
about the different types of financing that are available and assessing which one best suits your
needs. You can reduce your need for assistance by managing your finances effectively.
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Government grants and financing
Find out about government grants, loans, and other financing available for your business.
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Private sector financing
Your business may be eligible for different types of private sector financing, including
debt and equity.
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Personal assets
See how you can use personal assets to help finance your business.
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Financing from non-government organizations
There may be not-for-profit or community-based organizations that can offer you
financing or direct you towards financing.
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Accessing equity financing
Learn how to develop the plan, the materials and the confidence to go after the equity
financing for your business opportunity.
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Business planning
Find out how to write a business plan, and access templates, sample business plans, market
research information and statistics.
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Managing Your Business
Managing your business includes a wide range of activities, from day-to-day operations to longterm planning. It is important that you understand what you are responsible for, and what you
can do to make your business run efficiently. This section covers topics such as organizational
design, budgeting, hiring and training employees and marketing and sales.
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Day-to-day operations
Find out how you can structure your business, manage production processes and avoid
risks.
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Employees
Being the boss is not easy. Discover how to effectively manage your employees.
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Marketing and Sales
How well you market your business and interact with your customers can vastly
influence your success.
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E-business Security, Privacy and Legal Requirements
Be aware of the risks of e-business and protect yourself and your customers.
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Developing Your Website
Learn how to create a website so you can attract more customers to your business.
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Uses for E-Business
E-business is about conducting business online. Discover some of the many ways you can use ebusiness to your advantage.
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Growing Your Business
Expanding your business requires preparation. How do you want to grow? Do you have the
resources to take on new challenges? Discover ways to expand your business — from
innovation, to joint ventures, to exporting.
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Planning for business growth
You've decided it's time to expand, but there's plenty to consider before you begin. These
resources can help you make sound decisions that work for your business.
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R&D and innovation
Innovate to get new products and services to market or improve your business processes.
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Exporting and importing
Selling and investing abroad? Buying from foreign suppliers? Find information to help
you operate internationally.
Government Involvement With Your Business
As an entrepreneur, you need to stay on top of all your obligations, such as regulations that apply
to your business. This section offers guidance on how to register your business and obtain any
necessary permits or licenses. You will also find information on selling to various levels of
government and how to protect your business.
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Taxes, GST/HST
Learn how to manage and understand the many forms of taxation that may affect your
business.
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Registering your business
Find out about the requirements to register your business with different levels of
government.
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Permits and Licenses
Use our search tool to find out what permits and licences your business may need from
the federal, provincial and municipal governments.
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Regulations
Learn about the regulations that apply to your business.
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Copyright and intellectual property
Learn about intellectual property, including patents, trade-marks, copyrights, industrial
designs and integrated circuit topographies, and how they can protect your business.
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Selling to governments
Learn how your business can take advantage of contracting opportunities from the
federal, provincial, territorial, municipal and foreign governments.
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Bankruptcy
Get information on alternatives to bankruptcy and details on the process of bankruptcy, if
you need to take that route.
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Government grants and financing
Find out about government grants, loans, and other financing available for your business.
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