Its purpose is to explain the basics of your business in a way that both informs and interests the reader. If, after reading the executive summary, an investor or manager understands what the business is about and is keen to know more, it has done its job.
Start with an overview of your business:
- when you started or intend to start trading and the progress you have made to date
- the type of business and the sector it is in
- any relevant history – for example, if you acquired the business, who owned it originally and what they achieved with it
- the current legal structure
- your vision for the future
Then describe your products or services as simply as possible, defining:
- what makes it different
- what benefits it offers
- why customers would buy it
- how you plan to develop your products or services
- whether you hold any patents, trademarks or design rights
- the key features of your industry or sector
Markets & Competitors
In this section you should define your market, your position in it and outline who your competitors are. In order to do this, you should refer to any market research you have carried out. You need to demonstrate that you’re fully aware of the marketplace you’re planning to operate in and that you understand any important trends and drivers.
- your market – its size, historical data about its development and key current issues
- your target customer base – who they are and how you know they will be interested in your products or services
- your competitors – who they are, how they work and the share of the market they hold
- the future – anticipated changes in the market and how you expect your business and your competitors to react to them
Marketing & Sales Strategy
- How do you plan to position your product or service in the marketplace?
- Who are your customers? Include details of customers who have shown an interest in your product or service and explain how you plan to go about attracting new customers.
- What is your pricing policy? How much will you charge for different customer segments, quantities etc.
- How will you promote your product or service?
- How will you do your selling? Face to face, internet etc.
The management team
If you’re looking for external funding, your management team can be a decisive factor. Explain who is involved, their role and how it fits into the organisation. Include a CV or paragraph on each individual, outlining their background, relevant experience and qualifications. Include any advisers you might have such as accountants or lawyers.
If you’re looking to satisfy your bank manager or other investors, you need to demonstrate that your management team has the right balance of skills, drive and experience to enable your business to succeed. Key skills include sales, marketing and financial management as well as production, operational and market experience.
Give details of your workforce in terms of total numbers and by department. Spell out what work you plan to do internally and if you plan to outsource any work. Other useful figures might be sales or profit per employee, average salaries, employee retention rates and productivity.
Your business plan also needs to outline your operational capabilities and any planned improvements. There are certain areas you should focus on.
- Do you have any business property?
- What are your long-term commitments to the property?
- Do you own or rent it?
- What are the advantages and disadvantages of your current location?
- Do you need your own production facilities or would it be cheaper to outsource any manufacturing processes?
- If you do have your own facilities, how modern are they?
- What is the capacity compared with existing and forecasted demand?
- Will any investment be needed?
The final part of your business plan needs to include a full projection of your cash flow for the first three years of your venture, including your profit and loss calculations to show when you expect your business to start making money.