Business Plan Basics
Business planning – and the creation of a formal business plan document – is typically done when:
- Starting a new venture
- Expanding a current venture
- Buying an existing business, product, or service
- Working to improve the management of a current venture
Keep in mind that a formal plan can be as simple as a few handwritten notes and a sketch or two on a notepad or table napkin, or it can be so substantial that it needs a team of experts to create and decode. Specific format and content requirements depend on the complexity of the venture and also on the demands of those who will use the business plan as the basis for making decisions, such as an investor, a banker, the management team, the Board of Directors, etc.
Overall, a business plan typically aims to provide:
- A description of the venture, often including its primary features, advantages, and benefits
- An explanation of the purpose of the venture
- A justification for the venture that is credible (e.g. results of research that indicate the need for the venture’s business offering)
- Marketing plans, including research results about how the venture will be marketed (eg, who the customers will be, any specific groups (or targets) of customers, why they need the benefits they seek from the venture, how they will use the venture’s value offering, what they will be willing to pay, how the venture will be advertised and promoted, etc.)
- Staffing plans, including what expertise will be needed to build and sustain the venture on an ongoing basis
- Management plans, including how managerial expertise will be acquired, organized, coordinated, and led
- Financial plans, including estimated costs to build and to operate the venture, expected revenue, budgets for each of the first several years into the future, when the venture might break-even, etc.
- Appendices (there are a wide variety of materials included in appendices, e.g. description of the overall organization, its other products and/or services, its current staff, etc. and details of the competitive environment, the company’s technology infrastructure, etc.)