Starting A Small Business

A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.

Business plans may be internally or externally focused.  Externally focused plans are written to help convince shareholders to invest, while internally focused plans are written as a roadmap for how the business will operate.

Business Plan Outline

Executive summary

The executive summary summarizes the key points of the business plan. It should define the decision to be made and the reasons for approval. The specific content will be highly dependent on the core purpose and target audience. To get a sense of the difference the purpose and target audience can make, here are three different sets of key points for an executive summary – one for a loan request, one for a start-up seeking venture finance, and one for an internal plan.

Organizational background

n a written plan, information may appear in a separate section, an appendix, or may be omitted all together depending on the nature of the plan. If the plan is directed at people outside of the company, a brief synopsis may appear in the executive summary. This will be supplemented with a more detailed discussion elsewhere in the plan.

Marketing plan

The marketing plan has five objectives: If the product is a new product with no existing market, one must identify all substitute products. For each significant substitute product one must explain:

• Name, features, why substitute, why proposed product better
• Switching costs and why new product justifies switching
• Expected adoption dynamics
• Expected role once market begins to develop (see above for existing products)

Pricing

• Chosen price points
• Proposed Pricing strategy

Demand management

In economics, demand management is the art or science of controlling economic demand to avoid a recession. The term is also used to refer to management of the distribution of, and access to goods and services on the basic of needs. An example is social security and welfare services. Rather than increasing budgets for these things, governments may develop policies that allocate existing resources according a hierarchy of need.

Distribution

• Distribution strategy
• List of major distributors
• Current status of negotiations

Promotion and brand development

• Promotion strategy

Operational plan

Manufacturing/deployment plan

Information and communications technology plan

• Staffing needs
• Training requirements
• Intellectual property plan
• Acquisition plan
• Organizational learning plan

Cost allocation model

Financial plan

In general usage, a financial plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan can also be an investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate.

In business, a financial plan can refer to the three primary financial statements (balance sheet, income statement, and cash flow statement) created within a business plan. Financial forecast or financial plan can also refer to an annual projection of income and expenses for a company, division or department.^[1] A financial plan can also be an estimation of cash needs and a decision on how to raise the cash, such as through borrowing or issuing additional shares in a company.^[2]

While a financial plan refers to estimating future income, expenses and assets, a financing plan or finance plan usually refers to the means by which cash will be acquired to cover future expenses, for instance through earning, borrowing or using saved cash.

Current financing

Funding plan

Financial forecast

Risk analysis

Risk analysis is a technique to identify and assess factors that may jeopardize the success of a project or achieving a goal. This technique also helps to define preventive measures to reduce the probability of these factors from occurring and identify countermeasures to successfully deal with these constraints when they develop to avert possible negative effects on the competitiveness of the company.

One of the more popular methods to perform a risk analysis in the computer field is called Facilitated Risk Analysis Process (FRAP).

Decision making criteria