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Business Plan
A business plan is a written document that describes in detail how a business — usually a new one — is going to achieve its goals. A business plan lays out a written plan from a marketing, financial and operational viewpoint. Business plans are important to allow a company to lay out its goals and attract investment. They are also a way for companies to keep themselves on track going forward. Although they're especially useful for new companies, every company should have a business plan. Ideally, a company would revisit the plan periodically to see if goals have been met or have changed and evolved. Sometimes, a new business plan is prepared for an established business that is moving in a new direction. [1]
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- 1 Elements of A Business Plan [2]
- 2 Types of Business Plans [3]
- 3 Components of a Good Business Plan [4]
- 4 The Need For A Business Plan [5]
- 5 The Audience for Business Plans [6]
- 6 Who Needs a Business Plan [7]
- 7 Common Business Plan Mistakes [8]
- 8 Business Plan Vs. Strategic Plan [9]
- 9 Benefits of a Good Business Plan [10]
- 10 See Also
- 11 References
- 12 Further Reading
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There are four common elements to an excellent business plan.
- An explanation of why your company is relevant and the need are you addressing
- A description of corporate priorities and the processes to achieve them.
- An overview of the various resources, including the people that will be needed, to deliver what’s expected by the customer.
- A description of the state of your market and its important trends.
- A detailed description of your customers.
- A description of your current competitors and their advantages. Which ones will you displace?
- A description of your products, how they compete with other brands, and why they are needed.
- An explanation of why customers will pay a fair economic value for your product or service. This element is conspicuously absent from some of today’s most expensive unicorns. Companies such as Uber and Tesla are losing massive amounts of money on rapidly growing sales because these companies may not be selling their services/products for fair economic value. Of course, sales grow rapidly when customers can buy your services/products for far less than their fair economic values!
- Conservative
- Each scenario should have realistic and achievable sales, margins, expenses, and profits on monthly, quarterly, and annual bases. Again, these elements appear to be conspicuously absent from some of today’s most expensive unicorns.
Types of Business Plans [3]
- One-Page Business Plan: A one-page business plan is exactly what it sounds like: a quick summary of your business delivered on a single page. No, this doesn’t mean a very small font size and cramming tons of information onto a single page — it means that the business is described in very concise language that is direct and to-the-point. A one-page business plan can serve two purposes. First, it can be a great tool to introduce the business to outsiders, such as potential investors. Since investors have very little time to read detailed business plans, a simple one-page plan is often a better approach to get that first meeting. Later in the process, a more detailed plan will be needed, but the one-page plan is great for getting in the door. This simple plan format is also great for early-stage companies that just want to sketch out their idea in broad strokes. Think of the one-page business plan as an expanded version of jotting your idea down on a napkin. Keeping the business idea on one page makes it easy to see the entire concept at a glance and quickly refine concepts as new ideas come up. Learn more about how to create a one-page business plan.
- The Lean Business Plan: A Lean Plan is more detailed than a one-page plan and includes more financial information, but it’s not as long as a traditional business plan. Lean Plans are more likely to be used internally as tools for strategic planning and growth. The Lean Business Plan dispenses with the formalities that are needed when presenting a plan externally for a loan or investment and focuses almost exclusively on business strategy, tactics, milestones, metrics, budgets, and forecasts. These lean business plans skip sections like company history and management team since everyone in the company almost certainly knows this information. You don’t do an exit strategy section of your business plan if you’re not writing for investors and therefore you aren’t concerned with an exit. The simplest lean business plan uses bullet points to define strategy, tactics, concrete specific dates and tasks, and essential numbers including projected sales, spending, and cash flow. It’s just five to 10 pages when printed. And few Lean Plans need printing. Leave them on the computer. Review and revise them at least once a month. The first Lean Plan takes just a few hours to do (or less), and a monthly review and revision can take only an hour or two per month. Lean business plans are management tools used to guide the growth of both startups and existing businesses. They help business owners think through strategic decisions and measure progress towards goals.
- External Business Plan (a.k.a the standard business plan document): External business plans, the formal business plan documents, are designed to be read by outsiders to provide information about a business. The most common use of a full business plan is to convince investors to fund a business, and the second most common is to support a loan application. Occasionally this type of business plan is also used to recruit or train or absorb key employees, but that is much less common. A formal business plan document is an extension of the internal business plan, or the Lean Plan. It’s mostly a snapshot of the internal plan as it existed at a certain time. But while the an internal plan is short on polish and formality, a formal business plan document should be very well-presented, with more attention to detail in the language and format. See example business plans in our sample plan library to give you an idea of what the finished product might look like. In addition, an external plan details how potential funds are going to be used. Investors don’t just hand over cash with no strings attached—they want to understand how their funds will be used and what the expected return on their investment is. Finally, external plans put a strong emphasis on the team that is building the company. Investors invest in people rather than ideas, so it’s critical to include biographies of key team members and how their background and experience is going to help grow the company.
Components of a Good Business Plan [4]
The 10 components of a business plan are as follows:
- Executive Summary: The executive summary should appear first in your business plan. It should summarize what you expect your business to accomplish. Since it’s meant to highlight what you intend to discuss in the rest of the plan, the Small Business Administration suggests that you write this section last. A good executive summary is compelling. It reveals the company’s mission statement , along with a short description of its products and services. It might also be a good idea to briefly explain why you’re starting your company and include details about your experience in the industry you’re entering.
- Company Description: The next section that should appear in your business plan is a company description. It’s best to include key information about your business, your goals and the customers you plan to serve. Your company description should also discuss how your business will stand out from others in the industry and how the products and services you’re providing will be helpful to your target audience.
- Market Analysis : Ideally, your market analysis will show that you know the ins and outs of the industry and the specific market you’re planning to enter. In that section, you’ll need to use data and statistics to talk about where the market has been, where it’s expected to go and how your company will fit into it. In addition, you’ll have to provide details about the consumers you’ll be marketing to, such as their income levels.
- Competitive Analysis : good business plan will present a clear comparison of your business to your direct and indirect competitors. You’ll need to show that you know their strengths and weaknesses and you know how your business will stack up. If there are any issues that could prevent you from jumping into the market, like high upfront costs, it’s best to say so. This information will go in your market analysis section.
- Description of Management and Organization: Following your market analysis, your business plan will outline the way that your organization will be set up. You’ll introduce your company managers and summarize their skills and primary job responsibilities. If you want to, you can create a diagram that maps out your chain of command. Don’t forget to indicate whether your business will operate as a partnership, a sole proprietorship or a business with a different ownership structure. If you have a board of directors, you’ll need to identify the members.
- Breakdown of Your Products and Services: If you didn’t incorporate enough facts about your products and services into your company description (since that section is meant to be an overview), it might be a good idea to include extra information about them in a separate section. Whoever’s reading this portion of your business plan should know exactly what you’re planning to create and sell, how long your products are supposed to last and how they’ll meet an existing need. It’s a good idea to mention your suppliers, too. If you know how much it’ll cost to make your products and how much money you’re hoping to bring in, those are great details to add. You’ll need to list anything related to patents and copyright concerns as well.
- Marketing Plan : In your business plan, it’s important to describe how you intend to get your products and services in front of potential clients. That’s what marketing is all about. As you pinpoint the steps you’re going to take to promote your products, you’ll need to mention the budget you’ll need to implement your strategies.
- Sales Strategy : How will you sell the products you’re building? That’s the most important question you’ll answer when you discuss your sales strategy. It’s best to be as specific as possible. It’s a good idea to throw in the number of sales reps you’re planning to hire and how you’ll go about finding them and bringing them on board. You can also include sales targets.
- Request for Funding: If you need funding, you can devote an entire section to talking about the amount of money you need and how you plan to use the capital you’re trying to raise. If you’ll need extra cash in a year or two to complete a certain project, that’s something that’s important to disclose.
- Financial Projections: In the final section of your business plan, you’ll reveal the financial goals and expectations that you’ve set based on market research. You’ll report your anticipated revenue for the first 12 months and your annual projected earnings for the second, third, fourth and fifth years of business.
The Need For A Business Plan [5]
A business plan is important in that it serves two core purposes; it provides 1) financial validation and 2) serves as a roadmap .
- Financial Validation: With regards to financial validation, your business plan gives a strong indication, to both you and outside funding sources, as to whether your venture will be financially successful. Your financial projections, if completed properly (more on this below), allow financing sources to calculate whether you’ll be able to repay your loan or provide an appropriate Return on Investment. Importantly, the written sections of your business plan support your financial projections. For instance, the Industry Analysis section must prove that your market size is large enough to support your success. And your Marketing Plan section must show that you’ll be employing promotional tactics that allow you to attract customers at a reasonable cost.
- Serves as a Roadmap: In particular, the Operations Plan section of your business plan lays out your action plan. It details the key accomplishments and milestones you have established and when you expect to complete this. The roadmap gives you and your team a clear path to follow. It keeps you focused and improves your odds of reaching the goals you’ve set.
The Audience for Business Plans [6]
Who needs a business plan [7].
About the only person who doesn't need a business plan is one who's not going into business. You don't need a plan to start a hobby or to moonlight from your regular job. But anybody beginning or extending a venture that will consume significant resources of money, energy or time, and that is expected to return a profit, should take the time to draft some kind of plan.
- Startups: The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many, many great companies had their starts on paper, in the form of a plan that was used to convince investors to put up the capital necessary to get them under way. Most books on business planning seem to be aimed at these startup business owners. There's one good reason for that: As the least experienced of the potential plan writers, they're probably most appreciative of the guidance. However, it's a mistake to think that only cash-starved startups need business plans. Business owners find plans useful at all stages of their companies' existence, whether they're seeking financing or trying to figure out how to invest a surplus.
- Established firms seeking help: Not all business plans are written by starry-eyed entrepreneurs. Many are written by and for companies that are long past the startup stage. WalkerGroup/Designs, for instance, was already well-established as a designer of stores for major retailers when founder Ken Walker got the idea of trademarking and licensing to apparel makers and others the symbols 01-01-00 as a sort of numeric shorthand for the approaching millennium. Before beginning the arduous and costly task of trademarking it worldwide, Walker used a business plan complete with sales forecasts to convince big retailers it would be a good idea to promise to carry the 01-01-00 goods. It helped make the new venture a winner long before the big day arrived. "As a result of the retail support up front," Walker says, "we had over 45 licensees running the gamut of product lines almost from the beginning." These middle-stage enterprises may draft plans to help them find funding for growth just as the startups do, although the amounts they seek may be larger and the investors more willing. They may feel the need for a written plan to help manage an already rapidly growing business. Or a plan may be seen as a valuable tool to be used to convey the mission and prospects of the business to customers, suppliers or others.
Common Business Plan Mistakes [8]
- Not bothering to write one: This is far and away the most common error. Entrepreneurs are doers so it's natural that they want to get on with things and get them done – especially when they have an idea that they’re excited about buzzing around in their heads. But who hasn’t heard the adage "He who fails to plan plans to fail?" And that's the fate of almost every business someone starts without a business plan; failure. So yes, you need to write a business plan.
- Not being clear about the purpose of your business plan: A business plan is essentially a solution to a problem, the problem being how you are going to turn your vision of a successful business into a reality. So why are you preparing a business plan? Is it to persuade a potential lender to give you a business loan? Attract investors? Figure out if your new business idea could actually be turned into a viable business? Serve as a blueprint for your successful startup? The purpose of your business plan will affect everything from the amount of research you have to go through what the form of the finished plan will look like. If all you want to do is find out if a business idea is a good one that might be worth working up a business plan about, use these five questions to tell if your business plan idea is worth it.
- Not having a clear business model: A successful business has to make a profit. It's astonishing how many people who start small businesses don't seem to grasp this basic fact or are incredibly skilled at ignoring it. lanning to sell something is not a business model; a business model is a plan for generating revenue over and above your expenses. You can make the best mousetrap in the world, but if it costs you $90 to make each one and people are only willing to pay $10 for one, there’s no point to doing it as a business. By all means, if it provides you with personal satisfaction and you feel the cost is fair, do it. Otherwise, forget about it and move on to a business idea that does have profit potential. Professional and service businesses can be real dead-end traps if you don't have a clear business model set up.
- Not doing enough research: Not doing enough research to do the job is another common business plan mistake. Your business plan is only going to be as good as the research you put into it. To answer the central question of "Will this work?" you have to find the answers to a whole cluster of other questions, from "What are the current trends in this industry?" to "How will this business counter what its competitors are doing?" And the more complete the answers to the questions, the better prepared you'll be to either start your new business or shelve the idea and move on. Every section of the business plan will need research except for the Executive Summary. Fortunately, a lot of the required research can be done online, but there’s no getting around the fact that writing a business plan is a lot of work.
- Ignoring market realities: You and what you want to do are only one half of the equation of starting a successful business. The market is the other. You can have the best product or service in the entire world for sale but it doesn't matter if no one is willing to buy it. That is one bedrock, non-negotiable market reality. So it's crucial that you market test your product or service before you try to base a business on selling it. If you want to sell products, try selling them at local venues, such as farmers’ or flea markets and local trade shows, selling small batches online through eBay or Etsy, using focus groups to gauge interest, or giving out free samples and gathering people's feedback about them. If you want to sell services, surveys of potential interest or focus groups can work well. Do-It-Yourself Market Research explains how you can do your own market research, including tips for designing surveys and questionnaires. The competition is another market reality that has to be adequately dealt with in your business plan. It's not enough to just point out who they are; you need to examine what the competition is doing and explain specifically how you’re going to counter what they're doing to win market share. You have to make sure you take into account all the competition. Don't just think of those competitors operating exactly the same kind of businesses; think laterally, too, to be sure you identify all competitors. For instance, a prospective flower shop is not just competing against other flower shops in a particular area; it’s also competing with all the other local businesses that sell flowers, including grocery stores and big-box retailers and online flower sellers. That doesn't mean you have to list every potential competitor in your business plan and explain how you’re going to win the contest with them, but you do have to list and explain how you’re going to deal with the potential threat of each type of competition at least.
- the income statement
- the cash flow projection
- the balance sheet
To do this, you need to figure out how much money you need to start and operate your business and make educated guesses about how much money your new business will bring during its first year of operation. There are two common mistakes people make when they're tackling this section of the business plan.
- The first is not being realistic about their expenses. People often leave out expenses entirely or underestimate the cost of particular expenses. Meticulous research will prevent this mistake.
- The second is being overly optimistic about your new business's prospects. You're hoping your new business will do well. You wouldn't choose to start it otherwise, but you mustn't let your optimism lead you to create overly rosy cash flow projections.
- Setting your business plan aside after you've written it: If you write a business plan, use it to get a loan and never look at it again, you're wasting most of its value. A business plan is just that; a plan for how your new business is going to succeed. Treat it as your new business's first planning document and as you move through the startup period and beyond, edit and add to it as necessary. A pair of good first additions to your business plan is the Vision Statement and the Mission Statement ; creating these will solidify your goals and make sure you don't get sidetracked. Your original business plan will also be a useful reference document when you’re doing the ongoing business planning running a successful business requires. For instance, see Quick-Start Planning for Small Businesses for instructions on how to create an action plan for your small business.
- Not Every Business Plan is Worth Finishing: When you're writing a business plan, the answer to the central question, "Will this work?" is not always positive. And that's fine. It means the business plan is doing its job of showing you whether or not a business idea is worth doing and saving you potentially huge amounts of money and time. Usually, this discovery occurs during the course of working through a business plan, not at the end. And that's the time to quit developing that particular plan. If you discover, for instance, that the market for your proposed product is saturated while you're working on the Competitive Analysis section of the business plan, there's no point in carrying on and going to the trouble of preparing financials – your time is much better spent coming up with another business idea that may be more workable. Perseverance and determination are great traits for entrepreneurs to possess – until they turn into foolish persistence and keep you from accomplishing what you could be accomplishing. That can be the worst business plan mistake of all.
Business Plan Vs. Strategic Plan [9]
The truth is that strategic plans and business plans are more alike than different and can be combined together to create social sector genius. Business plans and pitches are more popular in the social sector than ever before, but this does not mean that strategic plans are not equally needed. In fact, a strategic business plan is a nice hybrid between the two. As the graphic below suggests, they have very similar recipes.
The foundation of a strategic plan is vision, mission and values of an organization – all of which can be directly connected to an organization’s market, customer and fit. Both of these foundations serve as the “true north” for the organization, but they can and should be modified as the environment changes. The process between creating a strategic plan and a business plan are also remarkably similar. You start with an internal and external scan, or research, to gather insights on the best direction for the organization. Those insights become the basis for an organization’s strategy, which is value creation for a business and impact for a social sector organization. In both cases, value and impact must be coupled with sustainability through a strong business model or fundraising plan. Then, strategy is followed by execution, which can be set via goals, KPIs (key performance indicators) and an action plan, which are often tracked in a dashboard. A business plan takes execution to the next level of detail and dictates the resources needed to be successful, e.g., personnel, operations. However, the outcome associated with each planning process is different. A strategic plan charts the long-term direction of an organization, while a business plan tests the feasibility of a business or organization and builds a roadmap for implementation. Taken together, a business plan and strategic plan communicate the same thing – confidence in the future direction. So, the hybrid strategic business plan communicates not only your vision for the future, but also how you plan to get there. It combines hopes and dreams with reality.
Benefits of a Good Business Plan [10]
Here are the top ten benefits of a good business plan.
- See the Whole Business: Business planning done right connects the dots in your business so you get a better picture of the whole. Strategy is supposed to relate to tactics with strategic alignment. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products right for your target market? Are you covering costs including long-term fixed costs, product development, and working capital needs as well? Take a step back and look at the larger picture.
- Strategic Focus: Startups and small business need to focus on their special identities, their target markets, and their products or services tailored to match.
- Set Priorities: You can’t do everything. Business planning helps you keep track of the right things, and the most important things. Allocate your time, effort, and resources strategically.
- Manage Change: With good planning process you regularly review assumptions, track progress, and catch new developments so you can adjust. Plan vs. actual analysis is a dashboard, and adjusting the plan is steering.
- Develop Accountability: Good planning process sets expectations and tracks results. It’s a tool for regular review of what’s expected and what happened. Good work shows up. Disappointments show up too. A well-run monthly plan review with plan vs. actual included becomes an impromptu review of tasks and accomplishments.
- Manage Cash: Good business planning connects the dots in cash flow. Sometimes just watching profits is enough. But when sales on account, physical products, purchasing assets, or repaying debts are involved, cash flow takes planning and management. Profitable businesses suffer when slow-paying clients or too much inventory constipate cash flow. A plan helps you see the problem and adjust to it.
- Strategic Alignment : Does your day-to-day work fit with your main business tactics? Do those tactics match your strategy? If so, you have strategic alignment. If not, the business planning will bring up the hidden mismatches. For example, if you run a gourmet restaurant that has a drive-through window, you’re out of alignment.
- Milestones: Good business planning sets milestones you can work towards. These are key goals you want to achieve, like reaching a defined sales level, hiring that sales manager, or opening the new location. We’re human. We work better when we have visible goals we can work towards.
- Metrics: Put your performance indicators and numbers to track into a business plan where you can see them monthly in the plan review meeting. Figure out the numbers that matter. Sales and expenses usually do, but there are also calls, trips, seminars, web traffic, conversion rates, returns, and so forth. Use your business planning to define and track the key metrics.
- Realistic Regular Reminders to Keep onTtrack: We all want to do everything for our customers, but sometimes we need to push back to maintain quality and strategic focus. It’s hard, during the heat of the everyday routine, to remember the priorities and focus. The business planning process becomes a regular reminder.
- IT Strategic Plan (Information Technology Strategic Plan)
- ↑ Definition - What Does Business Plan Mean? Investopedia
- ↑ Four Key Elements of A Business Plan Toptal
- ↑ Overview of Three Common Types of Business Plans bplans.com
- ↑ What are the 10 components of a business plan? SmartAsset
- ↑ Why do you need a business plan? GrowThink
- ↑ The Audience for Business Plans Wikipedia
- ↑ Who Needs a Business Plan? Entrepreneur
- ↑ The Most Common Business Plan Mistakes the balance
- ↑ Business Plan Vs. Strategic Plan Social Impact Architects
- ↑ What are the Benefits of a Good Business Plan? Tim Berry
Further Reading
- How To Build A Billion Dollar Business Plan: 10 Top Points Alan Hall
- The Undeniable Importance of a Business Plan SEAN HEBERLING, CFA
- 10 Benefits of Business Planning for all Businesses Evanston Chamber of Commerce
- If You Can Write a Grant, You CAN Write a Business Plan Suzanne Smith
- Search Search Please fill out this field.
What Is a Business Plan?
Understanding business plans, how to write a business plan, elements of a business plan, special considerations.
- Business Plan FAQs
- Investopedia
Business Plan: What It Is, What's Included, and How To Write One
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
:max_bytes(150000):strip_icc():format(webp)/adam_hayes-5bfc262a46e0fb005118b414.jpg "what is a business plan wikipedia")
Investopedia / Ryan Oakley
A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.
A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.
Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.
Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
Key Takeaways
- A business plan is a document describing a company's core business activities and how it plans to achieve its goals.
- Startup companies use business plans to get off the ground and attract outside investors.
- A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives.
- Businesses may create a lengthier traditional business plan or a shorter lean startup business plan.
- Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.
Want Funding? You Need a Business Plan
A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.
Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.
A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.
While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.
A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.
Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.
When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.
Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.
The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.
As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.
- Executive summary: This section outlines the company and includes the mission statement along with any information about the company's leadership, employees, operations, and location.
- Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
- Market analysis: A firm needs a good handle on its industry as well as its target market. This section of the plan will detail a company's competition and how the company fits in the industry, along with its relative strengths and weaknesses. It will also describe the expected consumer demand for a company's products or services and how easy or difficult it may be to grab market share from incumbents.
- Marketing strategy: This section describes how the company will attract and keep its customer base and how it intends to reach the consumer. A clear distribution channel must be outlined. The section also spells out advertising and marketing campaign plans and the types of media those campaigns will use.
- Financial planning: This section should include a company's financial planning and projections. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.
- Budget: Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
Unique Business Plans Help
The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.
Types of Business Plans
Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.
Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.
Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.
Financial Projections
A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.
Other Considerations for a Business Plan
A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.
If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.
Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.
Think of the business plan as a living document that evolves with your business.
A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.
Why Do Business Plans Fail?
Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out of control budgets. Markets and the economy can also change. Without flexibility built in to your business plan, you may be unable to pivot to a new course as needed.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.
Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.
Small Business Administration. " Write Your Business Plan ."
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How to Write a Business Plan
Last Updated: October 30, 2022 References Approved
This article was co-authored by Keila Hill-Trawick, CPA . Keila Hill-Trawick is a Certified Public Accountant (CPA) and owner at Little Fish Accounting, a CPA firm for small businesses in Washington, District of Columbia. With over 15 years of experience in accounting, Keila specializes in advising freelancers, solopreneurs, and small businesses in reaching their financial goals through tax preparation, financial accounting, bookkeeping, small business tax, financial advisory, and personal tax planning services. Keila spent over a decade in the government and private sector before founding Little Fish Accounting. She holds a BS in Accounting from Georgia State University - J. Mack Robinson College of Business and an MBA from Mercer University - Stetson School of Business and Economics. There are 10 references cited in this article, which can be found at the bottom of the page. wikiHow marks an article as reader-approved once it receives enough positive feedback. This article received 83 testimonials and 93% of readers who voted found it helpful, earning it our reader-approved status. This article has been viewed 2,290,612 times.
If you’re interested in starting your own business, by now you probably know that writing a business plan is one of the first steps. But what should a business plan include? How detailed should it be? Do you need to do research first? Don’t worry—below we’ll answer all of your questions and walk you through putting together your first business plan from start to finish!
Doing Your Homework
- Is there a viable market for the product or service you want to sell?
- How old are your potential customers?
- What do they do for a living?
- Is your product or service attractive to a particular ethnic or economic population?
- Will only wealthy people be able to afford it?
- Does your ideal customer live in a certain type of neighborhood or area?
- How many car mechanics are in need of soap in any given community?
- How many children in the United States are currently under the age of eight?
- How much soap will they use in a month or a year?
- How many other soap manufacturers already have a share of the market?
- How big are your potential competitors?
- Don't aim for the best of everything at the beginning. You can forgo the expensive trimmings of an office of a more well-established company and stick to the basics at the beginning. Get what is affordable, works and is actually needed and don't buy frills.
- Don't lose heart if you discover some, or even all, of your ideas have been adequately covered by the market. Don't ignore this reality; instead, work with it. Can you still do a better job or provide a better widget than your competitors? In many cases, it's likely that you can provided you know the market well and how to add value in ways your competitors are not doing. In other cases, it may be a case of focusing more narrowly or more broadly than your competitors are doing.
Structuring Your Business
- What will your product or service enable people to do better, more cheaply, more safely, or more efficiently? Will your restaurant make people’s palates delirious with new taste sensations? Will your new mousetrap help people capture mice without feeling sick to their stomachs? Will your new bubblegum scented bubble bath revolutionize the way children agree to take nightly baths?
- Your competitive advantage may include designing special features not found in rival products. It may entail superior service characteristics such as speedier delivery, a lower price, or more attentive sales people––these are never to be sniffed at as possible winning ways, as many companies grow complacent and can be overtaken by giving customers experiences that are better than the average expectations. Even where your product or service is already well established, perhaps you’re establishing an image or brand of exceptional quality or reputation.
- Keep in mind that your initial plans will undoubtedly change as your business grows. You may need to hire more managers to supervise your expanding staff or to set up new departments to meet new customer demands. Projected growth and expansion for your company should be mentioned in your business plan, but it’s not the primary focus. For now, you want to secure help in getting started and convince your funding sources that you will become profitable.
- Investors will want to know if you’re capable of running the business. Do you need to bring in experienced managers right away? Will you keep some of the existing employees or hire all new people? And where do you find these potential employees?
- Funding sources will also want to know if any of your partners expect to work alongside you or if their obligations are only financial. Your plan will need to specify the key management jobs and roles. Positions such as president, vice presidents, chief financial officer, and managers of departments will need to be defined along with stating who reports to whom.
- Consider how will you reach your customers. [14] X Research source What will you say to persuade and convince customers that your product or service is better value, more timely, more useful, etc. to the consumer than the rival product or service? If it currently has no rival, how will you properly explain the purpose of and the consumer's need for the product?
- What advertising and promotional efforts will you employ? For example, two for the price of one specials or free coupons inside those same kid-oriented cereal boxes? Where can you locate lists of the greatest concentrations of children under the age of eight or whatever group constitutes your market?
- What will your basic sales philosophy be? Building long-term relationships with a few major clients or developing a clientele of many short-term customers?
Writing the Business Plan
- Title Page and Table of Contents
- Executive Summary , in which you summarize your vision for the company
- General Company Description , in which you provide an overview of your company and the service it provides to its market
- Products and Services , in which you describe, in detail, your unique product or service
- Marketing Plan , in which you describe how you'll bring your product to its consumers
- Operational Plan , in which you describe how the business will be operated on a day-to-day basis
- Management and Organization , in which you describe the structure of your organization and the philosophy that governs it
- Financial Plan , in which you illustrate your working model for finances and your need from investors
- Sustainability Plan , in which you consider how your business's operations in the ecological, social, and economic context will create long-term value for society. [16] X Research source
- At first, do not worry about capitalization, punctuation, and grammar. All you need to worry about is putting your ideas down on paper. Once you have a general form, you can spend time proofreading your plan and correcting mistakes. Have someone else read over it for you and take heed of their comments.
- The accuracy of your financial figures and projections is absolutely critical in convincing investors, loan sources, and partners that your business concept is worthy of support. The data must also be scrupulously honest and extremely clear.
- Since banks and many other funding sources will compare your projections to industry averages in the R.M.A data, in the United States you can use the R.M.A figures to test your projections before the bank does.
Sample Business Plans
Expert Q&A
- Many sources exist for finding information for your business plan. Your local library and the internet are always helpful sources. If you live near a university, you may be able to schedule an appointment with one of the college's professors. The professor may be able to give helpful insight. ⧼thumbs_response⧽ Helpful 1 Not Helpful 0
- There are a few valuable online archives of business plans that feature companies which have successfully penetrated the market based on a well defined and executed business (and marketing) plan. Take the time to study the market through a successful company's eyes and consider what your company will offer that distinguishes your product or service from the rest. Be certain about what gives your business the competitive edge. ⧼thumbs_response⧽ Helpful 1 Not Helpful 0
- Make sure you cite your information. This way you will have support for any statistics you put into your business plan. ⧼thumbs_response⧽ Helpful 1 Not Helpful 0
- Do not submit your draft business plan to potential investors! However, it is advisable to give the executive summary instead of the whole plan after it is completed. Sometimes, busy investors may not have the time to look at an entire plan, which can sometimes be up to 50 pages. ⧼thumbs_response⧽ Helpful 65 Not Helpful 12
You Might Also Like
- ↑ https://extension.psu.edu/developing-a-business-plan
- ↑ https://www.extension.purdue.edu/extmedia/ec/ec-735.pdf
- ↑ https://sbdc.siu.edu/resources/writing-a-business-plan.php
- ↑ https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan
- ↑ Keila Hill-Trawick, CPA. Certified Public Accountant. Expert Interview. 30 July 2020.
- ↑ https://www.rmahq.org/who-we-are/
- ↑ https://www.scu.edu/mobi/business-plans/
- ↑ https://www.ofm.wa.gov/state-human-resources/workforce-data-planning/workforce-planning/introduction-workforce-planning
- ↑ https://www.ictsd.org/how-should-sustainability-be-considered-in-a-business-plan/
- ↑ https://www.investopedia.com/university/business-plan/business-plan7.asp
About This Article
To write a business plan, start with an executive summary that lays out your grand vision for your business. Follow that with a section that describes what products and services your company will offer. Then, write a marketing section where you detail how you're going to inform people about your business. You'll also want to include a section on your business model and how it will operate. Finally, conclude your business plan by letting investors know what you need from them. For help with doing research for your business plan, read the article! Did this summary help you? Yes No
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Business Plan
A generic business plan
- 2.1.1 1. Department History
- 2.1.2 2. Where/What Is Direction Of Clinical Engineering Field?
- 2.1.3 3. Identify Where We Are Today
- 2.1.4 4. Goal
- 2.1.5 5. How Do We Obtain our Goal?
- 2.1.6 6. S.W.O.T. Analysis
- 2.1.7.1.1 Direct Labor Hours
- 2.1.7.1.2 Indirect labor Hours
- 2.1.7.1.3 # FTEs requirement
- 2.2.1 Staffing
- 2.2.2 Maintenance Costs
- 2.3.1 Staffing
- 2.3.2 Maintenance Costs
- 2.3.3 Training Costs
- 2.4 10. Summary
- 3 Reference
A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team as well as how the clinical engineering team will attempt to reach those set goals. When an existing department plan is to assume a major change or when planning a new venture, a 3 year business plan is required, so corporate suite (C_Suite) can look for their annual return in that time frame.
Presentation
The following format of a clinical engineering business plan depends on these 5 key factors:
1. Department History 2. What direction are we going 3. Where we are today 4. Short/Long term goals 5. How we will obtain these goals 6. S trengths, W eaknesses, O pportunities, and T hreats (SWOT) 7. Needs Analysis 8. This and Next years Proposals 9. Summary
1. Department History
Staffing before 2010 was a full time manager and three full time technicians. The staffing was reduced to two technicians, with one acting as a lead technician and no management oversight. There was very little management functions at first as preparation for an JCAHO/AAAHC in 2010 because the previous manager was able to effectively manage that function. Zero discrepancies were found. Management functions have decreased since 2010 and the shop is unable to meet peer standards.
This increase in management time currently takes up a minimum of 80% of the current lead technician’s time to include reports, regular meetings, hazard alerts and recall monitoring and tracking, planning equipment and replacement, educating staff on the safe and effective use of equipment, investigating device failures and near misses, technology assessment to control costs, and ensure hospital/clinic compliance with full accreditation as well as local self-inspection standards. The clinical engineering department has also expanded its responsibilities in handling more high equipment in-house by reducing contracts and an increased high dollar equipment inventory due to hospital expansion, such as MRI, CT, U/S, Sterilization, etc. yet the Biomedical Equipment Repair department staffing has not changed in over three years. This has put a considerable strain [i.e. ensuring timely completion of PM’s, adequate manpower for repairs, inability to take vacation, inability to attend advanced medical device training or continuing education especially with the constant change in technology, low morale, etc.] upon the department.
Actual FTE available hours to repair and maintain equipment have decreased while equipment inventory has increased by approximately 500 pieces of equipment from 2010 to present. The following Business Plan is a proposal from the Clinical Engineering Department to re-engineer itself and to provide the information and guidance to help make an effective decision for the facility.
2. Where/What Is Direction Of Clinical Engineering Field?
The Clinical Engineering field has been and continues to move in the direction of operating as a business within a business. It is our goal to offer a total service package oriented to meeting our customers’ needs and expanding their expectation by superior customer service. Services provided by maintaining an adequate maintenance staff will ensure the facility is able to accomplish the medical mission and to take care of the military community and its beneficiaries. This goal is accomplished by offering services in the following areas, but not limited to:
Expanding from fix/repair to technical service/support management
- Technology Management/Assessment
- In-service/Education Management
- Risk Management/Assessment
- Contract Management
- Fiscal Management/Cost Containment, Reduction, Avoidance
Regulatory Management
- JCAHO/AAAHC
- Safe Medical Device Act (FDA)
- State of Florida 69A-3.012
- Title 21 CFR Subchapters
C. Electronic Product Radiation Control (MRI & Ultrasound) J. Radiological Health (Medical Imaging) H. Medical Devices (CT, Fluoro, & Bone Density)
- American Hospital Association (AHA)
- American National Standards Institute (AAMI)
- National Fire Protection Agency (NFPA)
- Occupational Standards Health Administration (OSHA)
- Health Services Inspection (HIS)
- Mammography Quality Standards Act
- Underwriters Laboratory (UL)
Other Standards Management
- Clinical Laboratory Improvement Amendments
College of American Pathology
- American College of Radiology
Hazardous Product Recall
- Product Recall Management
Equipment Management
- Preventive Maintenance
- User Training
- Calibration
- Initial/Acceptance Inspections
Vendor Management
- Manage Outside Contracts
Non-Clinical Systems
- Uninterrupted Power Supplies
- Hazardous Accumulation Point
3. Identify Where We Are Today
We currently perform maintenance on following equipment but not limited to:
- Diagnostic Ultrasounds
- Mammography
- Bone Density Scanner
- Defibrillators
- Apnea Recorders
- Hypothermia Units
- Oxygen Gauges
- Respirators
Centrifuges
- Vital Signs Monitors
- Video Endoscopy Equip
- BP Instruments
- Microscopes
- Steris Sterilizers
- Pulse Oximeters
- Hematology Analyzer
- Urine Analyzer
In addition to direct repair and maintenance, we perform the following equipment management services:
- Health Device/Products Recalls Management System
- Ensure Compliance with Regulatory Agencies
- Risk Management for Medical Equipment
- Support Services Education
- Product Evaluation
To provide comprehensive equipment maintenance, repairs and management services at a low cost with high customer satisfaction and to expand service on the following equipment types:
- Surgical Tables
- Radiology Equipment
- Digital Radiology rooms
- Anesthesia Incubators
- Sterilizers
5. How Do We Obtain our Goal?
1. Justification to obtain additional staffing
- Reduce outside service
- Transition from vendor use to in-house staff based on labor hours
- Skill level determination (add 3, 5, and 7 level)
- Improved parts inventory by reducing contracts; saving on payments to the contractors
2. Capital Asset Management Program Partnership
- Capping Contract - fixed cost by reducing all full service contracts and accept “first look” contracts.
3. Expand level of in-house experience and further reduce cost by
- Attending advanced training courses
- Attending manufacturer service schools
4. Expand Relationships within Clinic
- Administration
- Material Management
- Information System
5. Develop New Biomedical Organization Chart
An organizational chart by ACCE
An organizational chart (often called organization chart, org chart, or org name)) is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.
6. S.W.O.T. Analysis
1. STRENGTHS
- Parts Inventory
- Technical Experience
- High Customer Approval
- Technological Knowledge
- Satisfaction
- Cost Awareness
- Quality Improvements
- JCAHO/AAAHC Compliance
- Good Internal Resources Used
- Communication
- Lack of Consultant Usage
- High Standards
- Self Dependent
- Regulatory Knowledge
- Safety Knowledge
- Asset Management
- Vendor Relations
- Positive Work Environment
- Good Working Relationships with Other Departments
- Rapid Response
2. WEAKNESSES
- Lack of advanced training on Imaging and Lab Equipment
- Need More Involvement in Helping Clinic Plan for Future
- 50/50 For Lead Tech Is Non-Existent, Puts More Work On SSgt Orme
3. OPPORTUNITIES - Internal
4. OPPORTUNITIES - External
- Clinics · Vet Care Facilities
- 140+ Public Access Defibrillator program
- 3rd Party Service Contracts
7. Needs Analysis
Labor hour standards for Clinical Engineering are typically two hours per piece of equipment per technician per year. The typical Clinical Engineering technician will perform maintenance 70% of his/her time based on 2080 hours per year. The other 30% is vacation, sick time off, training, and other in-house administrative duties. This calculates to 1376 available hours spent maintaining equipment per technician per year. Currently, we have approximately 1615 pieces of equipment in inventory plus we maintain uninterruptable power supplies, blood pressure cuffs, electronic thermometers, wall suction units, otoscopes, instrument/medication carts, battery chargers, digital cameras, and flow meters. These are all non-inventory controlled items. This projects out to approximately 500 labor hours per year.
Current staffing would show available hours to perform maintenance at 5458 hours, short fall of 1000 hours. An additional 400 hours of labor time would be utilized to perform maintenance on Radiology [MRI, CT, and Mammo] and Ultrasound Equipment (see figures in projected FTE break down in next section).
A generic business plan FTE staffing chart
This brings the FTE total to approximately 3.9.
Annual Hours
Direct labor hours.
Schedule=2946 hours Unschedul=2012 hours Non-inventory=500 hours Total Available Hours=5458 hours
Indirect labor Hours
work week / year=2080 hours SLH=360 hours
- hours in shop=1720 hours
Productivity multiplier=0.8 actual hours worked=1376 hours
# FTEs requirement
FTE=3.966569767
This FTE value aligns with other Clinical Engineering peer departments or bases within the Air Force (see peer figures extracted from AFMLO device inventory search and August 2013 Authorized versus Assignment listing. Those FTE values are in next section).
8. This Years Proposal
An additional FTE to handle basic Radiology/Ultrasound and general Biomedical Equipment would help offset the additional workload that the MERC used to perform and maintain compliance standards.
Maintenance Costs
We recommend moving toward first look contracts that would be utilized to assist us in moving to perform in-house maintenance on diagnostic Radiology and Ultrasound equipment. This contract type will enable us to cancel or to allow the expiration of all our full-service contracts and have maintenance performed on a first look basis. This would allow us to fund x1 qualified technician as stated in “Staffing” and gradually assume responsibility for the maintenance in-house while acquiring experience related to deployments and instilling customer confidence. This alternative would allow the facility to function in a more self-reliant manner since time and materials is a very high risk on Radiology and Ultrasound equipment and can fluctuate up or down by as much as 30%.
The second benefit is that all maintenance costs are then located in one budget and managed between Clinical Engineering.
Training Costs: Remain the same. Schools for X-ray and Biomed help reduce contracts.
9. Next Years Proposal
New FTE to absorb workload from increased workload and expansion by imaging specialist into MRI, CT, Ultrasound, and Mammo units. Additional 400 hours, possibly could also handle bone density scanner with maintenance in-house.
Training Costs
School for CT will have to be funded since course already paid for locally to help cancel contracts.
10. Summary
The Clinical Engineering Department is a value added multifaceted, multi-talented group. Dedicated to providing a safe environment with high customer service for a very low cost. The main weakness we have is our lack of manpower.
An additional FTE would save money and keep us in compliance. Our main strengths are our technical ability, our desire to take on new challenges and to successfully and safely accomplish the mission. This has been evident in our obtaining schooling on MRI and CT and begin providing maintenance on these devices in-house. Only two clinics, Tyndall AFB and Luke AFB, have these similar modalities as well as the number of like devices and are able to be successfully compliant.
Cost of maintaining equipment will increase dramatically over the next five years as devices become more sophisticated. Our approach in obtaining training and maintaining these devices in-house will save the facility between $550,000 - $750,000 over the next five years.
Our recommendation is to utilize a capping contract to cap maintenance costs and to increase our staffing by providing an additional biomedical repair technician to augment the department in ensuring all clinic equipment is properly maintained and to provide more “hand” to assist with the overall PM’s and maintenance of our high tech/high cost Radiological equipment. The capping puts all maintenance contract costs into one budget while the technician allows for in-house maintenance as well as decreases equipment down time waiting for vendors to arrive on-site. It also provides for an increased utilization of equipment.
As the facility’s expert consultants on medical equipment; an additional technician would allow us to offer a well-rounded experienced department capable of supporting this clinic virtually free from outside services.
- 1 Exposure Index
- 2 Rotating Anode
- 3 Source To Image Distance
business plan
- 1.1 Pronunciation
- 1.2.1 Related terms
- 1.2.2 Descendants
- 1.2.3 Translations
- 2.1 Etymology
- 2.2 Pronunciation
- 2.3.1 Declension
- 2.4 Further reading
English [ edit ]
Pronunciation [ edit ].
- enPR : /bĭznĭs plăn/
Noun [ edit ]
business plan ( plural business plans )
- ( business ) A summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for the venture to succeed.
Related terms [ edit ]
- business idea
Descendants [ edit ]
Translations [ edit ], polish [ edit ], etymology [ edit ].
Unadapted borrowing from English business plan .
- IPA ( key ) : /bizˈnɛs.plan/
- Rhymes: -ɛsplan
business plan m inan
- ( business ) Alternative spelling of biznesplan .
Declension [ edit ]
Further reading [ edit ].
- business plan in Wielki słownik języka polskiego , Instytut Języka Polskiego PAN
- business plan in Polish dictionaries at PWN
IMAGES
VIDEO
COMMENTS
A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the
A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background
Pages in category "Business planning" ;. Proposal (business) ; A. Aggregate project plan · Anaplan · Ansoff matrix ; B · Balanced scorecard · Business Model Canvas
A business plan is a written document that describes in detail how a business — usually a new one — is going to achieve its goals.
Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget
To write a business plan, start with an executive summary that lays out your grand vision for your business. Follow that with a section that describes what
business plan definition wikipedia exchange new ideas, that only hires American you laptops or tables and visit our site. Afterwards, the business plan
A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals.
(business) A summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and
Business plans are useful documents for garnering funds for entrepreneurial ventures and evaluating progress in a business start-up. They are also useful for