This is meant to be a comprehensive summary of the key points of your business plan, NOT an introduction. Please keep this mind! A good rule of thumb is to always write the Exec Summary last.
You want a paragraph here on who the company is, and what they’re trying to provide to their stakeholders
Exactly what it is the company is trying to do. This is where you start to explain your business model,that is, by what method will this entity make profits?
The Product or Service
What is it that you’re selling to the customers? Why is it the greatest thing since the iPod®?
Pretty self explanatory. If this plan is for a start up, omit this section.
Describe the industry in which you will be doing business. Does is have established competitors? What is the competitive structure? Does it have monopolistic characteristics?
An analysis of your key competitors and their perceived strengths and weaknesses
What is happening in the industry that may affect future competition?
Why should people do business with you rather than your competition? What makes you so special?
An introductory paragraph here.
Who exactly we are selling to and how we are going to sell it to them? Is this a retail or commercial market?
Cost plus? Follow the market?
How do you know that people want to buy your product or service? What evidence do you have that this product or service has a market?
How is the product or service going to be produced? Are any parts of it going to be outsourced?
What type of physical plant are you going to need? A shopfront? A warehouse? A factory?
Where are we going to do this? Cairns, Queensland, worldwide?
What is your Quality Assurance program?
What types of staff will you need? Is there a sufficient number of suitable staff available in your location?
How are you going to recruit such staff as you do need? In house? Employment agency? Headhunter?
What types of training will you need to give your staff, both upon entry and ongoing?
Another, brief, introductory paragraph.
How much money are you going to need to start this up? How much do you have access to? Few sources are willing to risk their money with you unless you are willing to take a financial risk yourself. Are you willing to bet your house?
So, how much money are we going to make here? Warren Buffett money, or something less? Be convincing, but leave off the wild exaggerations.
Quite often you can express this as: “Cash reserves will exceed six months’ operating expenses. We plan to grow our cash reserves as sales and market conditions dictate.”
A summary of what the P&L statement in the appendix will tell us.
Projected Cash Flow
A summary of what the statement of cash flows will tell us. If you are dealing with VCs, you might want to calculate your cash burn rate. They’ll ask.
Exit or Harvest Strategies
If this plan is meant to be presented to venture capitalists, they’re going to want to know when they get their money, how they’re going to get it, and a most-likely estimate of how much.
Critical Risks and Assumptions
What could go wrong? What have you, can you, do about it? You really need to think this through. Are there people upon whom the organizational critically depends? How about protection of intellectual property (IP)? Don’t wait for me—or even worse, potential investors—to point out risks in your plan!
Wrap it all up here. A short recap of the high points of the plan and then some concluding remarks.
Appendix A: Resumes and Biographies of Key Personnel
Appendix B: Financial Statements
One of the keys here is to make the statements believable. As a starting point, how big would 1% of the market be? How much can you realistically capture? What will it cost you to do this? Be sure to avoid making too rosy projections! Don’t understate your expenses or overstate your potential earnings.
Projected Profit and Loss Statement
Insert a pro forma P&L Statement here, in spreadsheet form for the next three years.
Projected Cash Flow Statement
Insert a pro forma Cash Flow Statement here, in spreadsheet form, for the next three years.
Projected Balance Sheet
Insert a pro forma Balance Sheet here, in spreadsheet form, for the next three years.
Appendix C: Supporting Documentation
Documents you might want to include would be:
- If this is a franchise, a copy of the franchise agreement
- Articles of incorporation and corporate bylaws
- Partnership agreement, if this is a partnership
- ABN and registration of business name
- Any pending or issued patents or trademark registrations
- Proposed or executed lease or purchase agreement for building space
- An organization chart
Appendix D: Timeline
A timeline can help to visualize the issues the new business will face—and when those issues might be critical.