THE SECTIONS OF THE BUSINESS PLAN
The basic business plan is broken into nine sections. While it will appear that the plan is repetitious in
some areas, presenting the material in context to each heading is important. Sometimes the reader of
your business plan will go directly to the headings that are of the most interest, rather than reading the
entire report.
A.
Title Page
B.
Business Plan Summary
C.
Table of Contents
D.
Description of Company
E.
Operations Plan
F.
Marketing Research
1.
Industry Analysis
2.
Competitive Analysis
3.
Customer Analysis
4.
Market Analysis
5.
Estimated market Share and Sales
G.
Marketing Plan
H.
Financial Plan
I.
Risk Analysis
J.
Appendices
The business plan should also include all relevant supporting data for areas such as appraisals,
environmental studies, suppliers’ price lists, competitors’ price lists, photographs of your product,
product tests, etc.
A. Title Page
The title page should include your name, business name, your address and company logo if you have
one.
B. Business Plan Summary
The business plan summary is the first section the reader will read and the last section the writer
writes. The business plan summary of the business is your 30-second “soft sell” of what your business
idea is and the work you have done to make it a reality. This section is a complete overview of the
business plan covering such things as:
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Personal name
Company name
Location
Structure of the business
Overview of the business
What you are selling
C. Table of Contents
Be sure to include a table of contents assigning page numbers to your business plan sections. This step
seems simple but it is very important to help the reader find everything he/she is looking for.
D. Description of Company
1. Nature of the business
a. Type of operation (retail, manufacturing, service etc.)
b. Company mission and goals
2. Management
a. Duties, responsibilities and relevant skills of management team
b. Information about entrepreneurial and industry experience
3. Company size and location
a. Location relative to the market
b. Size of facilities
c. Home-based or commercially-based
E. Organizational Structure
You will want to clearly outline the organizational structure of your company. The three most common
types of legal structures for businesses in Canada are:
1.
Sole Proprietorship
2.
Partnership
o Who are the partners?
3.
Incorporated Company
o Who are the directors?
o Who are the officers?
Each of these models has unique legal and tax implications, so you should carefully consider all the
advantages and disadvantages of each before deciding on the organizational structure of your business.
Management/Personnel
This is an extremely important section of the business plan, as it describes the roles that the owner and
the other members of the management team will play, and their qualifications for such positions. The
reader of the business plan will want to know the quality of the management of the company and, if
necessary, that you have gathered a competent team around you. For example, you should consider the
following:
Who will be your Financial Manager? This person is responsible for:
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Keeping financial records
Managing day-to-day cash flow
Budgeting
Handling payables/receivables
Who will be your Staff Manager? This person is responsible for:
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Hiring
Training
Supervising staff
Who will be your Operations Manager? This person will be responsible for:
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Purchasing supplies
Purchasing inventory
Who will be your Sales/Marketing Manager? This person will be responsible for:
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Finding customers
Developing sales strategies
Setting prices
Promotions
Making the sales
Be sure to provide detailed information for all the positions listed including:
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List of work experience for principals in the business
Relevant education
Résumés (attach to appendices)
Job descriptions
Supporting Professionals
Be sure to indicate the names of any professionals who will be providing assistance for your business
and outline additional supporting services that may be required. Some key areas where a business may
have professional/support services include:
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Accounting
Banking
Advertising
Consulting
Insurance
Legal
E. Operations Plan
Your operations plan includes information about the day-to-day business activities. In order to make
your start-up and first critical months a success you should identify the key activities which must be
completed, with details as to how these tasks will be achieved, and a schedule of dates for completion.
It is in this section where you will provide information about aspects such as:
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Schedule of key activities
Business location
Days/hours of operation
Machinery/Equipment requirements
Inventory control
Suppliers
Staffing
Quality control procedures
F. Marketing Analysis
In the Marketing Analysis section of the business plan you incorporate all of the prior research you have
done to test the viability of your idea. In this section you would also provide a description of the
following topic areas:
Industry Analysis
What is the industry that your business will operate in?
 Briefly indicate market size and growth trends.
 Discuss any new developments or trends in the industry.
 What key factors influence industry growth?
 What constraints to industry growth are there?
 Is this industry in growth or decline?
 Is this industry affected by technology? If so what are the trends?
 What are the past, present and future trends in the industry?
 What are the industry safety regulations?
 Is this industry seasonal?
Competition Analysis
What is the competitive environment your business will operate in?
 Make a realistic assessment of the strengths and weaknesses of other companies producing
the same or similar products that appeal to your target market, and list the company names.
 Compare competing businesses on the basis of product/service quality, price, performance,
customer service, etc.
 Determine and discuss the market share held by major competitors.
 Explain clearly what it is about your company and its products that will appeal to customers
more than the offerings of your competitors.
 How do you define the competition?
o Provides the same service or product
o Provides an acceptable substitute service or product
o Uses a similar production technology
o Provides an incentive/benefit for customers to buy.
 Are there other products available in the market that might present a threat?
 Who are your top competitors and why?
Customer Analysis
Who are your customers?
 Identify where the customers are geographically.
 Describe the customers and classify them by age group, gender, income level, etc.
 Indicate whether the customers are easily reached and receptive to your product/service,
and describe their purchasing behaviour and the factors that influence or motivate them to
purchase products/services similar to yours (be sure you explain your answers to these
questions in depth).
 List any orders, contracts, or firm “commitments (conditional) to buy” that you have
received from potential customers.
 How much are your customers willing to pay? Are they price-sensitive?
 Are they interested in your product/service?
 Where do they presently buy and why?
 How many potential customers are there?
Market Analysis
Describe the market for your product thoroughly:
 Outline the size of your market. Market size can be measured in several ways:
o Number of potential customers
o Total expenditure on similar products
o Total number of units of similar products sold.
 Using appropriate data indicate the size of the market for your products, classified by
target market segment, if possible.
 Provide historical data for the most recent few years to indicate trends in the market.
 Discuss previous trends in the market and the major factors affecting market growth
now and in the near future, including industry trends, population changes, social
trends, government policy, etc.
Be sure to provide all the information to the relevant questions outlined earlier in this guide for market
research.
G. Marketing Plan
This section describes the strategies and tactics that you will use to attract the interest of those in your
target market, deliver the goods to them, ensure their satisfaction, and achieve your sales forecast.
The marketing plan should flow directly from your analysis of market conditions and the identification of
your target market. The marketing plan should explain how you are going to use the fundamental
marketing building blocks of product, price, place, and promotion to your advantage.
Product
When developing and describing your product you should consider the following aspects:
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Description of the Product/Service
o Describe exactly what your product/service is
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Uniqueness of Your Product
o What unique feature(s) will your product/service offer to differentiate it from the
competition?
o If you are providing a totally new product/service to the area, provide a further details
about it.
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Competitive Advantage
o Describe how your business will maintain an advantage over the competition.
o What is it about your product/service, your business, or other factors that persuades
you to think your business can gain a share of the market?
Price
In order to make an informed pricing decision you have to consider the following questions. You should
also include a price list in the business plan.
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What prices are your competitors charging?
What are the basic industry profit margins?
In your research how much did the prospective client indicate he/she would spend on your
product/service?
What is your cost of goods sold?
What is your overhead cost (day-to-day costs)?
Is the price of your product/service compatible with the image it conveys?
To determine the end price of your product/service you must figure out what the competition charges
or what the general prices for the product/service are in your industry. If your product/service is new,
you need to determine what price the market will bear. You must establish if you can sell the
product/service for this price, still cover your costs and overhead, as well as generate a reasonable
profit.
To establish your costs and overhead you need to:
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Determine the cost of goods sold
Identify how much to allocate as the cost of your own labour
Take into account provision for future expansion, as well as additional working capital for
the company.
Place (Distribution)
In this section you describe how you propose to provide your product/service to the prospective
customers. The following questions will assist you in development of this component of the business
plan:
 What channels will you use to distribute your product/service?
o Producer to Customer (End User)
o Producer to Retailer to Customer
o Producer to Wholesaler to Retailer to Customer
o Producer to Agent to Wholesaler to Retailer to Customer
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How will you time your distribution?
o Are you going to sell your snow blowers in April/May?
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Will your distribution be:
o Intensive – try to get your product everywhere?
o Selective – place your product in strategic locations?
o Exclusive – offer distribution rights?
What are your sales goals per day/month/year, including any anticipated seasonality in sales
How will sales be conducted and who will be responsible for sales?
Promotion
Promotion is the element of the marketing mix which describes how you intend to communicate
information to your potential customers. Describe the program you plan to use to create awareness in
your target market about your company and your product/service. In this section the following should
be answered:
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What target customer are you trying to reach?
What media do you plan to use?
o Radio
o TV
o Newspaper
o Magazines
o Billboards
o Direct Mail
o Brochures
o Tradeshows
o Website
o Social Media
How much do you plan to spend on each medium?
o Quarter One $_____________
o Quarter Two $_____________
o Quarter Three $_____________
o Quarter Four $_____________
When do you plan on using these mediums? What is your implementation plan for your
marketing strategy?
It is important to note that not all mediums are necessarily “paid advertisements”.
H. Financial Plan
For the financial portion of the business plan you will need to provide the following statements from
your preliminary work:
 Start-Up Expense Report
 Sales Forecast Schedule
 Projected Cash Flow
 Projected Balance Sheet
 Projected Income Statement
 Break-Even Analysis
These statements are the backbone of your financial projections and will give the reader all the
information he/she needs, in conjunction with the rest of the business plan, to assess your business
viability. Your financials will tell the true story of what you intend to do. Often someone will state an
aggressive marketing campaign in the marketing strategy section of the plan and then leave out a
budget for it in their cash flow. If it is not in your cash flow, you are not going to do be able to meet that
aggressive marketing campaign! Make sure your financials support your efforts outlined in the business
plan.
I. Risk Analysis
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Competitive reaction – how have the competitors reacted?
External risks
o External risk factors for your industry and your market (economy, weather, new
competition, supplier issues, technology, politics, demand)
Internal risks
o Identify the main internal factors that impact your business (sales projections not
realized, cost overruns, staff turnover, legal issues)
Contingency plans
o Review how each risk will be managed and what contingency plans will be in place
K. Appendices
Any supporting documentation you can provide to enhance the viability of your business idea can be
included in the Appendices section of the business plan. Following is a list of possible appendices that
are commonly included in a business plan:
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Product photographs and specifications
Résumés of your management team
List of prospective customers
o include letters of intent/support from potential clients/customers
List of possible suppliers
o include letters of intent from prospective suppliers
Job descriptions for management team
Consulting reports
Market surveys
Legal agreements and contracts
Publicity articles and promotional pieces
Other supporting material