ODA BULTUM UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF MANAGEMENT
Business Plan Guidelines
A Business Plan helps you evaluate the feasibility of a new business idea in an
objective, critical, and unemotional way.

The following Business Plan Format checklist is meant as a guideline only listing the most
important sections of the business plan in the order in which they will likely appear in your
completed business plan. It’s much recommended to follow this checklist while you are
preparing your business plan.

* Cover Page shall include the following:

Business Plan Title

Applicant Full Name

City/Address

Telephone

Mobile

E-mail

1 The Executive Summary

An Executive Summary is devoted to summarizing the key points of your business plan in one or
two pages. The Executive Summary is important to capture the reader’s attention (the juries or
potential lender \ investor). Make sure it sells your idea so the reader will retain interest and
continue reading. Your Executive Summary is a maximum two pages summary of the highlights
covered in your plan including:
• Description of your company (nature of business and market area)
• Products/services
• Summary key market figures and your competitive advantage Proposed sources and
uses of funds

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2 Description of the Business
Part A provides an overview of key information which is developed in greater detail in the
following pages. Aim for clarity and simplicity in this part. Too much detail here gets in the
way of the main ideas. The Elevator Test - Can you explain your basic business idea in the
time it takes to get from the lobby to the 5th floor?
Basic Questions:
1) What general type of business is this?
2) What is the business form? Sole Proprietorship, Partnership, Corporation or
Limited Liability Company?
3) What are your products?
4) Who are (will be) your customers?
5) What is your experience with this type of business?
6) What will be special or unique about this business?
7) Why will your business be successful?

3 Products and Services

In this section, describe your product offering. This will include details of product
features and an overview of unique technology or processes. But don’t stop there and
don’t focus too much on technology. You must also describe the product benefits and
why customers will want to buy.

For most businesses, the products/services are not totally unique. If yours are, take
advantage of this while you can and plan for the competitive battles that will come.

If your products/services are not unique, you must find a way to position your
products/services in the mind of your customer and to differentiate them from the
competition. Positioning is the process of establishing your image with prospects or
customers. (Examples include: highest quality, lowest price, wider selection, Best
customer service, faster delivery, etc.)

The Products and Services section should describe what you sell and how you
differentiate your products / services portfolio from other competitive offerings. It
provides detail on what your business does and begins to describe how it will generate
revenue.

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4 Market Analysis
The Market Analysis section will provide an overview of the industry that the business will be a
part of, primary and secondary target markets and investigation of your direct and indirect
competitors. It should include the following subsections:

4.1 Market Research

The Market Research section provides a summary of all information you referred to in order to
determine that there is a demand for your product/service. Particularly important section for start-
up businesses or new products/services are the research and it should include the following
subsections:
• Secondary Research - This includes information from second-hand sources, including
books, magazines, government sources, Internet, etc.
• Primary Research - Information you collect firsthand, including personal
interviews and discussions, surveys, etc.

4.2 Industry Analysis

The Industry Analysis provides trends, major players in the industry, and estimated industry
sales. It also examines:
• Total industry size (revenue generated, number of companies, etc.)

• Growth potential and factors influencing the industry growth

• Standards and regulations affecting the industry

• Common costs and profit margins

• Industry trends, including opportunities and threats trends, major players in the

industry, and estimated industry sales.

4.3 Customer Analysis

The Customer Analysis examines the primary target market for the prod uct or service, including
geographic location, demographics, target market's needs and ho w these needs are currently
being met. This section covers the following:
• Identify and define your typical customer segments
• Characterize each segment by location, age, gender, income, life style and any other
relevant characteristics of the target group
• Discuss the buying criteria of your target market - i.e. what motivates this group to make

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 the purchase decisions it makes? (i.e. price, quality, location, etc.)
• Market niche
Size of your market, and your anticipated market share Market trends and outlook

4.4 Competitors Analysis

The Competitors Analysis investigates the business's direct and indirect competitors, assessing
the business's competitive advantage and analyzing how it will overcome any entry barriers to the
chosen market. This section covers the following:
• Discuss the similarities and differences between your product/service and those of
competitors as well as your competitors’ relative strengths and weak nesses
• Your competitive advantage - what markets your product/service unique, and how will
you use this to your advantage?

• Detailed description of main competitors, including size, location, products/services,

market share

5 Marketing Plan

The Marketing Plan explains how the business is going to get customers to buy its products and
services. This section will provide a detailed explanation of the business's pricing, promotion and
distribution strategies.

5.1) Pricing
• Describe your pricing strategy and how you arrived at it, including your pricing relative to
your costs
• How do your prices compare to those of your competition?
•
5.2) Product Positioning
• How your product/service is presented in the market (i.e. luxury item, impulse buy,
necessity, specialty item, etc.)
• Tools used to solidify the appropriate image and positioning of your product/service in the
market

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 5.3) Promotion and Advertising
• Your promotional strategy, based on your target market and positioning
• Detailed description of the types of advertising and promotion you will use to reach your
target market (i.e. media advertising, direct mail, Internet, trade shows, press releases, etc.)
• Include a timeline and associated cost estimations for each major type of promotion and/or
advertising you plan to use as well as an annual budget
• Describe how you will measure the effectiveness of your promotional efforts
5.4) Sales Strategy
• Based on your research and capacity, what are your sales goals (in units) per
day/month/year, including any anticipated seasonality in sales
• How will your sales be conducted and who will be primarily responsible for sales
 Describe what resources will be allocated in sales in terms of both time and funds
 Outline your company’s services policies, guarantees, warrantees, etc.
• Credit and collection policies
• Explain how you will determine customer satisfaction
5.5) Distribution Strategy
• Includes all aspects of how your product is routed from your business to your customer
• Where your product will be sold or in the case of services businesses where your service
will be delivered/conducted
• Identify intermediaries in your distribution network, such as wholesalers, distributors, etc

6 Management Plan
When writing the business plan, the Management Plan section describes your management team
and staff and how your business ownership is structured. The Management Plan can be broken
down into the following sections:

6.1) Ownership Structure

This section describes the legal structure of your business determining if it is a sole proprietorship,
partnership or corporation. For partnership and corporation businesses, you may want to explain
who holds what percentage of ownership in the company.
6.2) Management Team
Under this section you want to describe the duties, responsibilities and relevant skills of
management team. Include information about entrepreneurial and industry experience.

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 6.3) Human Resources Needs
Outline your staffing requirements in this section including a description of specific skills that the
people working for you will have to have. Identify if it be best for your business to have
employees (full-time or part-time staff) or should you operate with contract workers or freelancers.
Then determine how many employees will your business need and what will it cost you.

7 Financial Plan
The Financial Plan includes balance sheet, income statement and cash flow statement.
The balance sheet compares what your business owns to what it owes.
The cash flow statement compares how much money will be coming in to how much you will be
spending. The income statement compares your revenues to your expenses to see if you are going
to make money.

7.1) Balance Sheet: The Balance Sheet is a snap shot of the business at any point in time. In
the case of a business start-up, it is often the starting balance sheet. A balance sheet is made up of
three parts.
 Assets: Things a business owns
 Liabilities: Debts a business owes
 Equity: The owners’ investment and re-investment in the business
Everything that the business owns, its assets have to have been paid for. Therefore we get the
following formula:

Assets = Liabilities + Equity

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7.2) Cash Flow Statements: A Cash Flow Forecast is probably your most important
financial tool. It is your cash flow that shows you if, and when, you will run out of cash essential to
run your business. It allows you to take action before problems occur and even to do “what if”
calculations before taking on new projects.
The cash flow is a 12-month projection that forecasts the receipts and disbursements for your
business. In a start-up situation, it is preferable to have a start-up month to specifically show the
reader the costs incurred to start the business.

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7.3) Income Statements (profit and loss statement): The purpose of the Income
Statement Forecast is to project the revenues and expenses of your business over a given period of
time – usually one year. Other terms for this are budgeted income statement or pro forma income
statement. There are three things that need to be predicted to forecast your income statement: the
sales projection, the cost of goods projection and the overhead’s projection.