A Guide to Preparing Your Business Plan A business plan should be clear and concise. If you have information which is necessary background reading, attach this as an appendix. The sections of a business plan should be broken down as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9. Business details Mission statement Executive Summary Business profile description Consumer and Market Analysis Sales and Market Strategy Product Technology Financial projections and funding requirements Company Structure and Operations *** 1. Business details Name and address, website and contact numbers for business Contact details for accountants and lawyers 2. Mission statement A statement of the business purpose i.e. what it wants to accomplish in the wider environment Describes a company's function, markets and competitive advantages Defines what an organisation is, why it exists, its reason for being See the <Business Plan Template> for further information 3. Executive Summary One page summary of the business and highlights from the business plan including history, details of management team, product range, current sales outlets, plans for the future etc. This section is best written when the rest of the plan is completed. Bear in mind that some stakeholders will only read this section so it must summarise all key information. This section will outline the business, long term goals and the strategies involved The following should be covered: Purpose of the Business Plan Introduce the business and its promoter(s) The product or product range A Guide to Preparing Your Business Plan 1 Market opportunity Financial projections Funding requirements The Management Team Growth expectations of the company set out in table format for the period of the business plan 4. Business profile description Founders background – detailing relevant experience Products Description of the product range Include details of any brand names The goals of the business Include details of: Target markets Geographical spread Routes to market New product development SWOT Analysis (Internal Strengths and Weaknesses and External Opportunities and Threats) of the business 5. Consumer and Market Analysis Information that should be included: o Target market o What is the size of the market o Total market valuation o Who are my target customers o Customer profiles o What are the consumer trends o What are the usage occasions o Who are my competitors o Competitor profiles The following information should be summarised in the business plan and attached as an appendix: Results of a Market Audit o Market Size and Trends A Guide to Preparing Your Business Plan 2 o Market Sectors and key players in each o E.g. retail market, foodservice market, farmers markets, events, online sales o Include details of current and target stockists o Anticipated growth rate in each sector Outline your targeted portion of the market e.g. 10% of market share Results of Market Analysis o SWOT Analysis of your business o Market Assumptions o Development and Trends in the marketplace over the life of the Business Plan o Market growth o Consumer Dynamics o Inflation o New Entrants o Innovation Details of your Competition o Who is the competition (domestic and international) o Competitive Performance o SWOT Analysis of all competitors o Potential investors may already be aware of your competitors o You must demonstrate that you have analysed them (SWOT) analysis and demonstrate how you are differentiating your products from theirs Competitive Advantage Price, Quality or Service o What is the price point of competing products o Can you compete on price? o Is the price point for your product too expensive o Is your product better quality o Better value for money? o Can you provide superior customer service? o Customer Profiles Customer Segmentation and Market Positioning o Customer segments o Profiles of customer segments in terms of:  Demographics – Age, gender, income, occupation  Psychographic – Social class, life style, health conscious  Behavioural – Purchase occasion, benefits sought Market positioning for each target customer segment o Arrange for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers A Guide to Preparing Your Business Plan 3 o Develop product positioning for each target segment Product positioning – by the way the products are defined by consumers o Quality o Taste o Health Benefits o Usage Occasion o Provenance For guidance on market research, please visit our ‘Marketing Your Business’ section of this website. 6. Sales & Marketing Strategy Marketing Strategy o Detail how the business intends to position the product in the market and differentiate it from its competitors o Unique selling points (USPs) - examples  Taste  Fresh ingredients  Legally compliant Health Claims  Provenance  Usage Occasion e.g. on-the-go, healthy snack  Added features  Product differentiation o Branding  Description of how you are branding your products to differentiate them from competitors through highlighting the USPs of your products/product range Brand Name Product description Photography of product/serving suggestion Colours Packaging Origin, stories about the brand owners and company o Activation of Marketing Plan o What marketing tools work best with target customers  Study Consumer Trends / Fashions  Establish the life styles of target customers  Strong Indication of what promotional tools work e.g. Time spent on internet Reading papers A Guide to Preparing Your Business Plan 4 o Commuting (listening to radio) Watching TV Attitude to flyers Marketing mix for each customer segment  Explain in terms of: Products Price Place, sales and route to market Promotion Export markets Target Geographical area  Examples of Marketing tools  PR – Public Relations  eMarketing  Website  On-line Portal  B2B  Email marketing campaigns  On-line Social Networking  Competitions  Exhibitions  In-store tastings  Sponsorship of events  Celebrity endorsements  Targeted Advertising Print media advertising Target publications – magazines Digital Advertising Radio advertising TV advertising Bill board advertising Mail shots, Leaflets and flyers Directories Pricing o Detail pricing for each product o Refer to the Financial Projections and Funding Requirements section for breakdown of pricing and attach as an appendix Sales Strategy o Field marketing sales team A Guide to Preparing Your Business Plan 5 o Van sales o Price promotions Routes to market o Retailers o Foodservice sectors o Markets o Distributors 7. Product Technology and Development Manufacturing in-house or sub-contracting manufacturing? – explain your decision for either scenario Details of your production process State if there is any patentable technology What is your Product Development Strategy and Plans for New Product Development Details of the product brands and plans for brand extensions What trademarks have you registered (Visit the Legal Issues section of this site for more details) R&D – is this ongoing? In which areas? 8. Financial projections and funding requirements This section should include financial information for the current year as well as projected financial information for the life of the Business Plan e.g. 3 or 5 years. Sales Performance – details of sales performance to date. This information should be broken down to product type and route to market in table format. Future Volume Projections - This information should also be broken down to product type and route to market in table format for each year Margins - State the gross profit margin per product. Attach a pricing model for each product as an appendix. Demonstrate the gross margin per product in terms of % of wholesale price Summary Cash Flow Analysis Summary Profit & Loss Summary Balance Sheet Funding Requirements - Describe in detail the current funding requirement and future funding requirements. Explain what the funding is to be used for and when. Demonstrate in the cash flow analysis in the Appendix how the funding is to be re-paid and when Funding to date - Detail funding invested in the business to date including the following: o Founders investments to date o External investors including bank finance, equity investors A Guide to Preparing Your Business Plan 6 o Grant funding received, amount repayable and when Assumptions/Notes to the Financial Projections o Notes to the accounts are included to explain the basis on which the financial projections were prepared. It will explain how key figures in the projections were arrived at e.g.  Sources of revenue (using the sales forecasts above as a guideline)  Employee numbers  Projected investment  Projected/expected costs  Depreciation policies  Expected Debtors and creditors days (working capital requirements)  This section will also include assumptions that could affect the financial forecasts e.g. Interest rates Currency rates if the company is exporting or planning to export Inflation (which could affect costs assumptions) Appendices o Pricing model for each product o Cash Flow Statements o Profit and Loss Accounts o Balance Sheets o Sensitivity analysis – for movements in Interest rates and Currency rates 9. Company Structure and Operations This section describes the structure of the company, the business model used or anticipated and details of the founders and owner/managers background in detail and the management structure and responsibilities of the management team and key staff e.g. marketing/sales/production staff. Company Structure o Business model – done in the format of a flow chart o Operations – again using a flow chart o Responsibilities chart of the management team and key staff Owner/Manager o Track record (personal as well as business) o Practical knowledge of the product o Experience in the market for the product o Marketing and selling skills o Leadership and responsibility o Level of involvement in the business A Guide to Preparing Your Business Plan 7 Management o Names, backgrounds, key skills and responsibilities of the management team Operational staff o Names, backgrounds and responsibilities of the operational staff Family businesses – planning for succession End. 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