WRITING A

BUSINESS
PLAN
 WHAT IS A BUSINESS PLAN?
• Business Plan
– A business plan is a written
narrative, typically 25 to 35
pages long, that describes
what a new business plans
to accomplish.
• Dual-Use Document
– For most new ventures,

the business plan is a dual-

purpose document used both
inside and outside the firm.
WHY READS THE BUSINESS PLAN AND
WHAT ARE THEY LOOKING FOR?
There are two primary audience for a firm’s business plan

Audience What They are Looking For

A clearly written business plan helps the
A Firm’s employees of a firm operate in sync and
Employees move forward in a consistent and
purposeful manner.
Investors and A firm’s business plan must make the
other external case that the firm is a good use of an
stakeholders investor’s funds or the attention of
others.
 GUIDELINES FOR WRITING A
BUSINESS PLAN
• Structure of the Business Plan
– To make the best impression a business plan should
follow a conventional structure, such as the outline
for the business plan shown in the chapter.
– Although some entrepreneurs want to demonstrate
creativity, departing from the basic structure of the
conventional business plan is usually a mistake.
– Typically, investors are busy
people and want a plan where
they can easily find critical
information.
 GUIDELINES FOR WRITING A
BUSINESS PLAN
• Structure of the Business Plan (continued)
– Software Packages
• There are many software packages available that employ
an interactive, menu-driven approach to assist in the
writing of a business plan.
• Some of these programs are very helpful. However,
entrepreneurs should avoid a boilerplate plan that looks
as though it came from a “canned” source.
– Sense of Excitement
• Along with facts and figures, a business plan needs to
project a sense of anticipation and excitement about the
possibilities that surround a new venture.
 GUIDELINES FOR WRITING A
BUSINESS PLAN
• Content of the Business Plan
– The business plan should give clear and concise
information on all the important aspects of the
proposed venture.
– It must be long enough to provide sufficient
information yet short enough to maintain reader
interest.
– For most plans, 25 to 35 pages is sufficient.
• Types of Business Plans
– There are three types of business plans
GUIDELINES FOR WRITING A
BUSINESS PLAN
Types of Business Plans
 GUIDELINES FOR WRITING A
BUSINESS PLAN
• Recognizing the Elements of
the Plan May Change
– It’s important to recognize
that the plan will usually
change while written.
– New insights invariably
emerge when an
entrepreneur or a team of
entrepreneurs immerse
themselves in writing the
plan and start getting
feedback from others.
 OUTLINE OF BUSINESS PLAN
• Outline of Business Plan
– A suggested outline of a business plan includes:
• Executive summary
• Company description
• Industry analysis
• Market analysis
• Marketing plan
• Management Team and Company Structure
• Operations Plan
• Product (or Service) Design and Development Plan
• Financial Projections
 OUTLINE OF BUSINESS PLAN
• Outline of Business Plan
– Most business plans do
not include all the
elements introduced in
the sample plan; we
include them here for the
purpose of completeness.

– Each entrepreneur must

decided which elements
to include in his or her
plan.
 SECTION 1: EXECUTIVE
SUMMARY
• Executive Summary
– The executive summary is a short overview of the
entire business plan
– It provides a busy reader with everything that
needs to be known about the new venture’s
distinctive nature.
– An executive summary shouldn’t exceed two
single-space pages.
 SECTION 1: EXECUTIVE
SUMMARY
Key Insights
• In many instances an investor
will ask for a copy of a firm’s
executive summary and will
ask for a copy of the entire
Executive Summary plan only if the executive
summary is sufficiently
convincing.
• The executive summary, then,
is arguably the most important
section of a business plan.
 SECTION 2: COMPANY
DESCRIPTIOAN
• Company Description
– The main body of the business plan beings with a
general description of the company.
– Items to include in this section:
• Company description.
• Company history.
• Mission statement.
• Products and services.
• Current status.
• Legal status and ownership.
• Key partnerships (if any).
 SECTION 2: COMPANY
DESCRIPTION
Key Insights
• While at first glance this
section may seem less
important than the others, it is
Company Description extremely important.
• It demonstrates to your
reader that you know how to
translate an idea into a
business.
 SECTION 3: INDUSTRY ANALYSIS
• Industry Analysis
– This section should being by describing the industry the
business will enter in terms of its size, growth rate, and sales
projections.
– Items to include in this section:
• Industry size, growth rate, and sales projections.
• Industry structure.
• Nature of participants.
• Key success factors.
• Industry trends.
• Long-term prospects.
SECTION 3: INDUSTRY ANALYSIS

Key Insights
• Before a business selects a
target market it should have a
Industry Analysis good grasp of its industry—
including where its promising
areas are and where its points
of vulnerability are.
• The industry that a company
participates in largely defines
the playing field that a firm will
participate in.
 SECTION 4: MARKET ANALYSIS
• Market Analysis
– The market analysis breaks the industry into
segments and zeros in on the specific segment (or
target market) to which the firm will try to appeal.
– Items to include in this section:
• Market segmentation and target market selection.
• Buyer behavior.
• Competitor analysis.
 SECTION 4: MARKET ANALYSIS

Key Insights
• Most startups do not service their
entire industry. Instead, they focus on
servicing a specific (target) market
within the industry.
Market Analysis • It’s important to include a section in
the market analysis that deals with
the behavior of the consumers in the
market. The more a startup knows
about the consumers in its target
market, the more it can tailor its
products or service appropriately.
SECTION 5: MARKETING PLAN

• Marketing Plan
– The marketing plan focuses on how the business
will market and sell its product or service.
– Items to include in this section:
• Overall marketing strategy.
• Product, price, promotions, and distribution.
SECTION 5: MARKETING PLAN

Key Insights
• The best way to describe a
startup’s marketing plan is to
Marketing Plan start by articulating its
marketing strategy,
positioning, and points of
differentiation, and then talk
about how these overall
aspects of the plan will be
supported by price,
promotional mix, and
distribution strategy.
SECTION 6: MANAGEMENT TEAM
AND COMPANY STRUCTURE
• Management Team and Company Structure
– The management team of a new venture typically
consists of the founder or founders and a handful
of key management personnel.
– Items to include in this section:
• Management team.
• Board of directors.
• Board of advisers.
• Company structure.
 SECTION 6: MANAGEMENT TEAM
AND COMPANY STRUCTURE
Key Insights
• This is a critical section of a
business plan. Many
Management Team and investors and others who
Company Structure read the business plan look
first at the executive
summary and then go
directly to the management
team section to assess the
strength of the
people starting the firm.
 SECTION 7: OPERATIONS PLAN
• Operations Plan
– Outlines how your business will be run and how your
product or service will be produced.
– A useful way to illustrate how your business will be run
is to describe it in terms of “back stage” (unseen to the
customer) and “front stage” (seen by the customer)
activities.
– Items to include in this section:
• General approach to operations.
• Business location.
• Facilities and equipment.
SECTION 7: OPERATIONS PLAN

Key Insights
• Your have to strike a careful
balance between adequately
Operations Plan describing this topic and
providing too much detail.
• As a result, it is best to keep
his section short and crisp.
SECTION 8: PRODUCT (OR SERVICE)
DESIGN AND DEVELOPMENT PLAN
• Product (or Service) Design and Development Plan
– If you’re developing a completely new product or
service, you need to include a section that focuses on
the status of your development efforts.
– Items to include in this section:
• Development status and tasks.
• Challenges and risks.
• Intellectual property.
SECTION 8: PRODUCT (OR SERVICE)
DESIGN AND DEVELOPMENT PLAN
Key Insights
• Many seemingly promising
startups never get off the
Product (or Service) ground because their product
Design and development efforts stall or
Development Plan turn out to be more difficult
than expected.
• Its important to convince the
reader of your plan that this
won’t happen to you.
SECTION 9: FINANCIAL PROJECTIONS
 Financial Projections
• The final section of a business plan presents a firm’s pro
forma (or projected) financial projections.
• Items to include in this section:
 Sources and uses of funds statement.
 Assumptions sheet.
 Pro forma income statements.
 Pro forma balance sheets.
 Pro forma cash flows.
 Ratio analysis
SECTION 9: FINANCIAL PROJECTIONS

Key Insights
• Having completed the earlier
sections of the plan, its easy
Financial Projections to see why the financial
projections come last.
• They take the plans you’ve
developed and express them
in financial terms.
 PRESENTING THE BUSINESS
PLAN TO INVESTORS
• The Oral Presentation
– The first rule in making an oral presentation is to
follow directions. If you’re told you have 15 minutes,
don’t talk for more than the allotted time.
– The presentation should be smooth and well-
rehearsed.
– The slides should be sharp and not cluttered.
 PRESENTING THE BUSINESS
PLAN TO INVESTORS
Twelve PowerPoint Slides to Include in an Investor Presentation

1. Title Slide 8. Management team

2. Problem 9. Financial projections
3. Solution 10.Current status
4. Opportunity and target 11.Financing sought
market
12.Summary
5. Technology
6. Competition
7. Marketing and sales
 PRESENTING THE BUSINESS
PLAN TO INVESTORS
• It’s also important to
look sharp when
presenting a
business plan.
• New venture teams
is going over their
PowerPoint slides
one last time before
investor
• Questions and Feedback to Expect presentation.
from Investors
 The smart entrepreneur has a good idea of the
questions that will be asked, and will be prepared