A Basic Business Plan Format
Most people have a vision, and they see the creation of a business or organization as a means to manifest their vision. But many people have a difficult time articulating their plans. A Business Plan is a valuable tool to clarify your ideas, to identify your goals, and to create a roadmap on how to achieve success.
 The more time you spend up front clarifying your goals, the quicker you will achieve them. 
If you plan on asking lending institutions for money, or applying for non-profit status, the Business Plan is mandatory. The more time you spend up front clarifying your Mission, Goals, Objectives, and Strategies, the quicker you will be able to determine which of your plans fit within the scope of your vision.
Using the Self Assessment Tool will also give you insight to your own personal motivations.
If you've been in business for a while but feel that your business isn't as successful as you would like, better late than never! By taking the time to write a business plan you will begin to see how you can define your marketing niche and become more focused. Associations and non-profit organizations also benefit from this tool. If you do not operate a non-profit as if it were a "for profit" business, you won't be around long enough to provide the services that motivated your organization to form in the first place. Even if you run a home-based business, you will still have to plan for your operating expenses and revenue streams.
Basic Business Plan
1. Introductory page
(a) company name
-include address and telephone number
- nature of business and market area
(d) securities offered to investors or lenders
- outline securities such as preferred shares, common shares, debentures, etc.
(e) business loans sought
- such as term loan, operating line of credit, mortgage
(f) summary of proposed use of funds
2. Summary
(a) highlights of business plan
- preferably one-page maximum
-Include your project, competitive advantage and "bottom line" needs.
3. Table of contents
(a) section titles and page numbers should be given for easy reference
4. Description of the industry
(a) industry outlook and growth potential
-outline industry trends - past, present and future - and new developments.
- state your sources of information
(b) markets and customers
- estimated size of total market, share and sales, new requirements and market trends
(c) competitive companies
- market share, strengths and weaknesses, profitability, trends
(d) national and economic trends
- population shifts, consumer trends, relevant economic indicators
5. Description of business venture
(a) nature of consulting service
-characteristics, method of operation, whether performed locally, regionally, nationally or international
(b) target market
- typical clients identified by groups, present consulting patterns and average earnings, wants and needs
(c) competitive advantage of your business concept
- your market niche, uniqueness, estimated market share
(d) business location and size
- location relative to market, size of premises, home or office use.
(e) staff and equipment needed
- overall requirement, capacity, home of office use, part-or full - time staff or as required
(f) brief history
-principals involved in the consulting business or proposed consulting business, development work done, resumes and background experience of principals, resumes of key consulting associates if applicable
6. Business goals
(a) one year
-specific goals, such as gross sales, profit margin, share of market, opening new office, introducing new service, etc.
(b) over the longer term
- return on investment, business net worth, sale of business.
7. Marketing Plan
(a) sales strategy
-commission sales staff, agents, sub-consultants
- sales objectives, sales tools, sales support
- target clients
(b) sales approach
- style of operation and techniques
(c) pricing
- costing, mark-ups, margins, break-even
(d) promotion
- media advertising, promotions, publicity appropriate to reach target market
-techniques of developing exposure, credibility and contacts
(e) service policies
- policies that your consulting practice will adopt with regard to credit and collection, bidding, nature of clientele, etc.
(f) guarantees
- service performance guarantees or other assurances will vary depending upon nature of consulting practice and type of contract or client
(g) tracking methods
- method for confirming who your clients are and how they heard about you
8. Sales forecast
(a) assumptions
- one never has all the necessary information, so state all the assumptions made in developing the forecast
(b) monthly forecast for coming year
- sales volume, projected in dollars
(c) annual forecast for following two to four years
- sales volume, projected in dollars
The sales forecast is the starting point for your projected income statement and cash flow forecast.
9. Costing plan
(a) cost of facilities, equipment and materials (as applicable)
- estimates and quotations
(b) capital estimates
- one time start-up or expansion capital required
10. Operations
(a) purchasing plans
-volume discounts, multiple sources, quality, price
-(b) inventory systems
-seasonal variation, turnover rate, method of control
(c) space required
- floor and office space, improvements required, expansion capability
(d) staff and equipment required
- personnel by skill level
- fixtures, office equipment
(e) operations strategy
11. Corporate structure
(a) legal form
- proprietorship, partnership or incorporation
(b) share distribution
-list of principal shareholders
(c) contracts and agreements
-list of contracts and agreements in force
-management contract, shareholder or partnership agreement, service contract, leases
(d) directors and officers
-names and addresses, role in company
(e) background of key management personnel
-brief resumes of active owners and key employees
(f) organizational chard
-Identify reporting relationships
(g) duties and responsibilities of key personnel
- brief job descriptions - who is responsible for what
12. Supporting professional assistance
(a) professionals on contract in specialized or deficient areas; would include lawyer, accountant, banker, insurance agent, etc.
13. Research and development program
(a) product or service improvements, process improvements, costs and risks
14. Risk assessment
(a) competitor's reaction
-will competitor try to squeeze you out? What form do you anticipate any reaction will take?
(b) list of critical external factors that might occur
-identify effects of strikes, recession, new technology, weather, new competition, supplier problems, shifts in consumer demand, costs of delays and overruns, unfavorable industry trends
(c) list of critical internal factors that might occur
-income projections not realized, client dispute or litigation, receivables difficulties, demand for services increases very quickly, key employee or consultant quits
(d) dealing with risks
-contingency plan to handle the most significant risks
15. Overall schedule
(a) interrelationship and timing of all major events important to starting and developing your business
16. Action plan
(a) steps to accomplish this year's goals
- flow chart by month or by quarter of specific action to be taken and by whom
(b) checkpoint for measuring results
- identify significant dates, sales levels as decision points
17. Financial forecast
If a business has been in operation for a period of time, the previous year's balance sheets and income statements are required, preferably for the past two or three years.
(a) opening balance sheet
- The balance sheet is a position statement, not an historical record; it shows what is owned and owed at a given date. There are three sections to a balance sheet; assets, liabilities, and owner's equity. You determine your firm's net worth by subtracting the liabilities from the assets
- Your balance sheet will indicate how your investment has grown over a period of time. Investors and lenders typically examine balance sheets to determine if the company is within acceptable assets to liability limits. -see sample #5
(b) income and expense forecast statement (profit and loss)
-The income and expense forecast can be described as the operating statement you would expect to see for your business at the end of the period for which the forecast is being prepared.
-For a new business, the forecast would show what revenue and expenses you expect the business to have in its first year of operation.
-It is very useful, of course, to prepare a forecast for a period longer than one year. It is suggested that a detailed operating forecast be prepared for the next year of operation and a less detailed forecast for the following two years.
(c) cash flow forecast
-A cash flow budge measures the flow of money in and out of the business. It is critical to you and your banker.
-A cash flow budget should be prepared a year in advance and contain monthly breakdowns. - see sample #7
(d) cash flow assumptions
When reviewing the cash flow plan, certain assumptions should be made;
-Sales: monthly sales that are expected to materialize
-Receipts: cash sales represent cash actually received; receivables collected represents the collection of amounts due for goods sold on credit; rental income is rent that will be collected in advance at the beginning of each month.
-Disbursements: accounts payable to be paid in month following month of purchase.
-Accounting and legal: to be paid upon receipt of bill, expected to be in the spring or after your fiscal year end financial statements have been completed
-Advertising: anticipated to be the same amount each month and paid for in the month the expense is incurred
-Automobile: anticipated to be the same amount each month and paid for in the month the expense is incurred
-Bank charges and interest: anticipated to be the same amount each month and monthly paid for in the same month the expenses is incurred
-Equipment rental: to be paid for in monthly payments
-Income taxes: amount for taxes of the prior year and to be paid in the spring
-Insurance: annual premium to be paid quarterly, semi-annually or annually in installments of equal amounts
-Loan repayment: amount is the same each month and paid in accordance with the monthly schedule furnished by the lending institution
-Office supplies and expenses: to be paid in month following receipt of invoice and supplies to be purchased on a quarterly basis.
-Taxes and licenses: to be paid for upon receipt of invoice, expected to be in January and July
-Telephone: to be paid for in month following the month the expense is incurred. Amount expected to be the same each month except in the last quarter when rates are expected to increase
-Utilities: expected to fluctuate with weather conditions and to be paid for in the month following the month the expense is incurred
-Wages and benefits: wages to increase at the beginning of the year. Amount considered to be the same each month and paid for in the month the expense is incurred
-Miscellaneous: expected to be the same each month and paid for in the same month the expense is incurred
-Bad debts: varies
(e) Break-even analysis
Shows at what sales volume the firm breaks even.
- The break-even point is where total costs are equal to total revenues.
-The calculation of total costs is determined by adding variable costs onto the fixed costs.
- Total costs are all costs of operating the business over a specified time period
-variable costs are those that vary directly with the number of consulting services provided or marketing and promotion activities undertaken. These include: auto expenses, business travel, supplies, brochures, etc. Variable costs are not direct costs which are passed on to the client in the billing.
-Fixed costs are costs that do not generally vary with the number of clients serviced. Also known as indirect costs, these costs typically include salaries, rent, secretarial service, insurance, telephone, accounting and legal supplies.
18. Financing and capitalization
(a) term loan applied for
-the amount, terms and when required
(b) purpose of term loan
-attach a detailed description of the aspects of the business to be financed
(c) owner's equity
-the amount of your financial commitment to the business
(d) summary of term loan requirements
-for a particular consulting project or for the business as a whole
19. Operating loan
(a) line of credit applied for
-a new line of credit or an increase, and security offered
(b) maximum operating cash required
-amount required, timing of need (refer to "cash flow forecast")
20. Present financing (if applicable)
(a) term loans outstanding
-the balance owing, repayment terms, purpose, security and status
(b) current operating line of credit
- the amount and security held
21. References
(a) name of present lending institution
-branch and type of accounts
(b) lawyer's name
-lawyer's address and telephone number
(c) accountant
-accountant's name and address and telephone number
22. Appendix
Suggested list:
(a) personal net worth statement
-includes personal property values, investments, cash, bank loans, charge accounts, mortgages and other liabilities. This will substantiate the value of your personal guarantee if required for security
(b) letter of intent
-potential orders for client commitments
(c) description of personal and business insurance coverage
-include insurance policies and amount of coverage
(d) accounts receivable summary
-include aging schedule of 30,60 and 90 day periods
(e) accounts payable summary
-include schedule of payments and total amounts owning
(f) legal agreement
-include a copy of contracts, leases and other documents
(g) appraisals
-fair market value of business property and equipment
(h) financial statements for associated companies
-where appropriate, a lender may require this information
(i) copies of your brochure
(j) testimonial letters from clients
(k) references
(l) sales forecast and market surveys
(m) list of investors
(n) credit status information
(o) news articles about you and your business
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