Dustin Scott
November 5, 2014
MGMT 4252 – Assignment #3
A business plan is a document that gives every single detail of a future venture.
Any potential investor should be able to read through this plan and end with a complete
understanding of what the business will do and how money will be made. Every business
plan is different, however they each take a great deal of time to complete. An average of
11 sections will be included with an average of 15-20 pages (Entrepreneur, 2014). This is
while starting with an introductory page and ending with an appendix (Hisrich, Peters, &
Shepherd, 2012).
The introductory page is always what comes first in a business plan. This is like
the title page that should catch the reader’s attention from the start. The company name
along with the entrepreneur’s contact information will be at the top, followed by a brief
description of the business. Summing up this page should be the initial financing
requirements and what it is for, along with a statement of confidentiality. This page
shouldn’t be overly flashy; it should just get the basic company information into the mind
of your reader early.
Secondly, you will include the executive summary into the business plan. This is
to be written after the rest of the plan has been completed. It will be 2 to 3 pages in length
and should finish the deal of grabbing the reader’s attention. If this part lacks in any way,
the rest of your plan may not be read at all. Explain the business concept in this part and
explain what makes it worthwhile. You should also discuss yourself in this part because
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every reader will not always know. Tell how the investor will make money and how
much too. This is most likely the reason they are reading your business plan anyways.
Next in the business plan comes the environmental and industry analysis section.
The environmental analysis looks at changes happening worldwide that could possibly
impact the new business. Examples of this would be economy trends, culture movements
and technology advancements. As a potential investor, you need to know this to make
sure you are putting your money in a safe place. The industry analysis is very similar to
the environmental analysis but focuses more on internal risks. Examples of this would be
the current competition and industry demand. If demand is low or your business lacks a
competitive advantage against your competition, it will be near impossible to get
investors.
The description of the venture is next on the business plan. This should be a more
detailed description of the company, starting with the mission statement. All products or
services should be described along with the size of the business. Equipment needed for
the office should be put here too. It is very important that the location of the business is
described in this part. Location can determine many things, such as parking and delivery
rates for suppliers or distributors.
The production plan is a very important part of any business plan, especially for
proving financial needs. Here, you will tell if the product will be manufactured on site or
subcontracted, and why. Potential investors want to see that you are being as efficient as
possible in this. The machinery needed will have to be listed along with a layout. Raw
material suppliers will be listed as well with contact information. If no manufacturing is
needed for this business, then this section can be scratched off of the business plan.
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Next, the operations plan should be included. The entire flow of your business is
described in this section. This shows how the product or service makes it from scratch in
your business to the customer in completion. Inventory control procedures, shipping and
customer services are all relevant to this. For service-oriented businesses, it includes
more of your business’s reliability and assurance. Describe what makes your service
better than your closest competitors’ (Business Start-Up and Resource Guide).
A huge part of the success of your business depends on the marketing. For this
reason, you should have a strong marketing plan next in your business plan. The product,
price and promotion will be discussed here. Forecasted sales are important in this section
to illustrate profitability for the venture. This plan should be updated annually to show
how marketing would continue to raise sales, thus increase revenue. Once developed, it
can always be changed if necessary. This part is never set in stone (Developing a
Marketing Plan).
The organizational plan is to come next in the business plan. This will state
whether the venture is going to be a proprietorship, partnership or corporation. If it will
be a corporation, details of the stock and share options should be included. For a
partnership, each owner’s terms should be included. The members of the management
team must be listed here along with their responsibilities. Lastly, include the salaries and
forms of payment for each level of management in the business.
Next in the business plan is the assessment of risk. This plan should address your
hazards in the particular industry. First, you should discuss all of the risks that are out
there for the venture. Then, discuss what happens if the risks actually come reality.
Lastly, discuss what you can do to minimize the risks for your business or how you will
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deal with them if they actually happen. Major risks for a new venture are from
competitors who respond to your business or your own weaknesses as a new company.
Either way, it is best to assess all of the possibilities and have a plan of how to react to
them. All potential problems not considered will lead the reader to believe the plan is
unrealistic (Develop Your Business Plan).
The financial plan is the last major part of your business plan and perhaps the
most difficult to put together. Here, you discuss all of the numbers that are being
predicted for your company in the near future. You should forecast sales and discuss
expenses first, to give potential investors an idea of profits. Next, include the cash flow
figures for your first 3 years of operation. The first year should be broken down by
months to show how much money will be available in your vulnerable beginning stage.
Lastly, provide a projected balance sheet. Balance sheets show a snapshot of the
company’s financials at a given time. This will be important to show investors what your
planes assets, liabilities and retained earnings will be.
(Elmaleh, 2007)
The very last section that needs to be included into a business plan is the
appendix. This will consist of all the backup material that was previously discussed in
your business plan. Any letters from suppliers or distributors should be included here.
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Place all of your research data or survey results in this section as well. Lastly, include the
price lists that have been given to you by your suppliers. Potential investors will want to
see this information in writing from them.
Overall, the business plan will come to good use for the entrepreneur and anyone
who reads it during the opening stages of the company. It will always be of good use to
look back on to help you stick with the original plan. Implementing what it is in the
document is very important and should be strived upon. Always measure your progress as
you continue forward and stick with the plan.
Works Cited
Business Start-Up and Resource Guide. (n.d.). Retrieved 11 05, 2014, from SBTDC:
www.sbtdc.org/pdf/startup.pdf
Develop Your Business Plan. (n.d.). Retrieved 11 05, 2014, from SBTDC:
www.sbtdc.org/pdf/startupguide/SUBRG_DevelopPlan.pdf
Developing a Marketing Plan. (n.d.). Retrieved 11 05, 2014, from SBA:
www.sba.gov/content/developing-marketing-plan
Elmaleh, M. (2007). Understand Accounting. Retrieved 11 04, 2014, from
www.understand-accounting.net/simplebalancesheet.html
Entrepreneur. (2014). Retrieved 11 04, 2014, from Introduction to Business Plans:
www.entrepreneur.com/article/38290
Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2012). Entrepreneurship (Vol. 9). New
York, NY: Paul Ducham.
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