Preparing a Business Plan

The Business Plan is a written summary of what you hope to accomplish by being in business and how you intend to organize your resources to meet your goals. It is the road map for operating your business and measuring progress along the way. There are six fundamentals to keep in mind while working on your business plan:

  1. The Business Plan identifies the amount of financing or outside investment required and when it is needed.
  2. A well-organized plan is essential for a lender or investor to assess your financing proposal and to assess you as a business manager.
  3. By committing your plans to paper, your overall ability to manage the business will improve. You will be able to concentrate your efforts on the deviations from plan before conditions become critical. You will also have time to look ahead and avoid problems before they arise.
  4. It encourages realism.
  5. It helps you to identify your customers, your market area, your pricing strategy and the competitive conditions under which you must operate to succeed. This process often leads to the discovery of a competitive advantage or new opportunity as well as deficiencies in your plan.
  6. Three or four hours spent each month updating your plan will save you time and money in the long run and may even save your business.

Below is an overview of what to include in a business plan and links to resources to assist in preparing a plan.

The Business Plan

Format & Structure

The presentation of your business plan is important since it is a communications tool, one that reflects your business to readers. A well-structured plan will help inform and influence your readers towards some action whether it be providing a loan, extending credit or investing in your business.

If you are not seeking financing, a structured business plan is still valuable because it helps guide you through the complex process of committing your ideas to paper.

Executive Summary

An Executive Summary is devoted to summarizing the key points of your business plan in one or two pages. The Executive Summary is important to capture the reader's attention (potential lender or investor). Make sure it sells your idea so the reader will retain interest and continue reading.

Your Executive Summary should include:

Table of Contents

Your table of contents should include section titles and page numbers for easy and quick reference.

Business Overview

The Business Overview section introduces the reader to your business. In this section you will want to describe your business and the progress you have made to date. You should include information such as:


This section includes a description of your product or service. You will want to highlight the uniqueness of your product/service, the research and development that you must undertake before your product goes to market, proprietary features (i.e. patents, trademarks) that may help you obtain a competitive advantage, and any future development you have planned.

Human Resources

In this section you will want to describe the key management, staff and/or supporting services. Include brief biographies, if possible. List the names of your Board of Directors (if applicable) and your professional advisors (lawyer, accountant, banker, outside consultants, etc.).

Market Analysis

The Market Analysis section should be a comprehensive and detailed discussion on your market. It should include the following subsections:

Industry Overview

An analysis of the industry in which your business will compete. This section should also include a detailed description of your key competitors.

Marketing Strategy

Your Marketing Strategy should summarize the target market for your product/service. Who is your audience? Where are they located? How many of them are there? Are there enough to support your business?

Product/Services (USP)

In this section you will want to provide solid answers to questions like: What is the Unique Selling Proposition/Feature (USP) of your product/service? Why will your customers come to you instead of your competitors?

Promotion and Marketing

When considering Promotion and Marketing, be sure to answer the following questions: How will you get the message out about your product/service? Through ads? Press releases? How much will it cost?

Pricing and Position

Key questions to consider in Pricing and Position are: How much will your product/service cost? What is the position of your product/service compared to your competitors? Is it a "high-end" service or an affordable everyday product?

Distribution Strategies

When considering your Distribution Strategies, ask yourself: How will your product/service reach the end user? How much will it cost?

Implementation Plan

Your Implementation Plan should list the estimated dates for completion of major dates of your business plan, as well as the acquisition of equipment, inventory, staffing, financing, etc. Questions to consider are: How will my business grow and develop? What are the key milestones to be achieved?

Risk & Contingency Plan

Your Risk/Contingency Plan should discuss possible challenges, issues, barriers that your business may encounter. These can be external (i.e. economic downturn) or internal (i.e. less than projected sales). State positive plans to minimize these risks.

Financial Plan

A sound Financial Plan must include pro-forma balance sheets, income statements and cash flow statements.

Balance Sheet

The Balance Sheet is a snap shot of the business at any point in time. In the case of A business start-up, it is often the starting balance sheet. A balance sheet is made Up of three parts.

Everything that the business owns, its assets have to have been paid for. Therefore we get the following formula: Assets = Liabilities + Equity. This is extremely important as it gives the reader a picture of how the owners' money (equity) or through the creditors' money (liabilities).

Cash Flow Statements

A Cash Flow Forecast is probably your most important financial tool. It is your cash flow that shows you if, and when, you will run out of cash essential to run your business. It allows you to take action before problems occur and even to do "what if" calculations before taking on new projects. The cash flow is a 12-month projection that forecasts the receipts and disbursements for your business. In a start-up situation, it is preferable to have a start-up month to specifically show the reader the costs incurred to start the business.

Income Statements

The purpose of the Income Statement Forecast is to project the revenues and expenses of your business over a given period of time - usually one year. Other terms for this are budgeted income statement or pro forma income statement. There are three things that need to be predicted to forecast your income statement: the sales projection, the cost of goods projection and the overhead's projection.


The Appendices should include any supporting material that you have referenced in writing your business plan. These materials may include a summary of market research surveys, contracts, price lists, detailed or technical information on your product/service, owners' resumes, etc.

Business planning resources

Business Planning: Information about business planning success,writing your business plan, business plan templates and samples, and FAQ.

Business planning and financial forecasting: A guide to the preparation of a business plan and the resources available.

Business planning: Business plan walk-through together with templates for a business plan and financial projects, sample business plans for different types of businesses and presentations on key topics.