A Closer Look At Business Plan Example

Standard

Business plans can be classified roughly into four separate types. There are very short plans, or miniplans. There are working plans, presentation plans and even electronic plans. They require very different amounts of work and not always with proportionately different results. That is to say, a more elaborate plan isn’t guaranteed to be superior to an abbreviated one, depending on what you wish to use it for.

The Miniplan. A miniplan may consist of 1 to 10 pages and should have at least cursory attention to such key matters as business concept, financing needs, especially cash flow, income projection, balance sheet, and marketing plan and financial statements. It’s a good way to quickly test a business concept or measure the value of a potential partner or minor investor. It can also be used as a valuable prelude to a wide-length plan later on.

Be careful about misusing a miniplan. It’s not designed to substitute for a whole-length plan. If you send a miniplan to an investor who is looking for a comprehensive one, you are only going to look foolish.

The Working Plan. A working plan is a tool to be used in order to operate your business. It has to be long on detail but may be short on presentation. You can probably afford a somewhat higher level of candor and informality when preparing a working plan, as with a miniplan.

A plan intended strictly for internal use may also omit some elements that would be important in one aimed at someone outside the house. You probably do not need to include an appendix with resumes of key executives, for example. Nor would a working plan especially benefit from, say, product photos.

Fit and finish are likely to be quite different in a working plan. It’s not essential that a working plan be printed on high-quality paper and enclosed in a fancy binder. An old three-ring binder with ‘Plan’ scrawled across it with a felt-tip marker will serve quite well.

Entrepreneurs have many areas to concentrate on during the pre-launch phase and initial stages of the company: legal and insurance requirements, fundraising, marketing, sales, innovation, fiscal management, hiring, and operations, for example. To juggle all of these balls at once, a plan is needed. The same plan that funders will look at becomes the basis for an internal plan of attack, giving ongoing advice to the management on the action to move towards launch and then profitability.

Internal consistency of facts and figures is just as crucial with a working plan as with one aimed at outsiders. You do not have to be as careful, however, about such things as typos in the text, perfectly conforming to business style, being consistent with date formats and so on. This document is like an old pair of khakis you wear into the office on Saturdays or that one ancient delivery truck that never seems to break down. It’s there to be employed, not admired.

The Presentation Plan. If you take a working plan, with its low stress on cosmetics and impression, and twist the knob to boost the level of attention paid to its looks, you will wind up with a presentation plan. This plan is appropriate for showing to bankers, investors and others outside the company.

Almost all the information in a presentation plan is going to be the same thing as your working plan, while it might be styled somewhat differently. For instance, you should use standard business vocabulary, omitting the informal jargon, shorthand, and slang that is so useful to the labour market and is appropriate in a working plan. Remember, these readers will not be familiar with your operation. This plan is not being used as a reminder but rather as an introduction unlike the working plan.

You’ll also have to report some added elements. Among investors’ requirements for due diligence is information on all competitive threats and risks. Even if you consider some of only peripheral significance, you need to deal with these concerns by providing the information.

The big difference between the presentation and working plans lies in the details of appearance and polish. A working plan may be run off on the office printer and stapled together at one corner. A presentation plan should be printed by a high-quality printer, probably using color. It must be bound expertly into a folder that is durable and easier to read. It should include graphics such as charts, graphs, tables and illustrations.

It’s essential that a presentation plan be accurate and internally consistent. A mistake here could be interpreted as a misrepresentation by an unsympathetic outsider. At best, it will make you look less than careful. If the plan’s summary describes a need for $40, 000 in financing, but the cash flow projection shows $50, 000 in financing coming in in the first year, you might think, ‘Oops! Forgot to update that summary to illustrate the new numbers. ‘ The investor you are asking to pony up the cash, however, is unlikely to be so charitable.

The Electronic Plan. The majority of business plans are composed on a pc of some sort, then printed out and presented in hard copy. But more and more business information that once was transferred between parties only on paper is now sent electronically. So you may find it appropriate to have an electronic version of your plan available. An electronic plan can be handy for presentations to a group using a computer-driven overhead projector, for example, or for satisfying the requirements of a discriminating investor who wants to be in a position to delve deeply into the foundations of complex spreadsheets.

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