Business plan

A business plan is a document that describes a company’s overall plans. The phrase is sometimes used to describe a plan for a segment of the company or for a specific initia­tive. It can also describe the document prepared in an effort to raise VENTURE CAPITAL.

A business plan describes the current business environ­ment, the company’s goals, and the progressive milestones for how those goals will be reached. The plan specifically reports the marketing, operational, staffing, and financial steps to be taken to attain each of the goals.

Here is an outline commonly used in business plans:

- Executive Summary. This section summarizes the rest of the document. It should be interesting enough to entice the reader to read the rest of the document.

- Company Profile. This section, which provides a description of the business, includes the company’s MIS­SION STATEMENT.

- Competitive Analysis. This section describes the busi­ness’s competitive environment, specifies what competi­tors are currently in the business, and looks at their likely response to the actions described in the business plans.

- Marketing Strategy. This section describes the market­ing strategy to accomplish the company’s goals and includes discussion of pricing and distribution issues.

- Operational Strategy. This section tells about the oper­ational milestones needed to accomplish the com­pany’s goals. It describes the development of new processes or technology and the progress being made in these areas.

- Staff Qualifications. This section—one of the plan’s most important—describes the team that has been marshaled to carry out the plans. Potential investors are often more interested in the “who” of the plan than the “what.”

- Financial Information. The business plan needs to include any financial information that helps describe

(a) the company’s current financial situation, (b) cost data relative to carrying out the plan, and (c) the firm’s financial condition if the plan is successful.

- Appendices. This section contains any support docu­mentation that makes the business plan more credible. For example, the financial information section may dis­cuss the company’s income growth over the past five years, and thus the appendix could contain the com­pany’s FINANCIAL STATEMENTS.

The sections described above serve only as an example of what often appears in a business plan. The more creative a person is in clearly presenting the plan, the more likely it is that the plan will get the attention of a potential investor.