Who is the intended audience?
Some business plans are designed for internal audiences (owners, employees, Boards of Directors or Advisors, and senior management) for an existing organization for the purposes of implementing a growth strategy and may be referred to as a strategic plan. It can also serve as a guide solely for the owner of a new business to help clarify their vision and goals.
A business plan could also be for external audiences (investors, clients, suppliers, new hires, bankers and other lenders such as government) for the purposes of attracting financing, talent or suppliers for a new or existing business. A document for this audience may initially take the form of a condensed version of the larger business plan, especially for attracting funding. This version is known as the business opportunity document or business funding proposal and is typically followed by the business plan itself. Obtaining financing is a significant issue for many businesses and this tool can be an enormous advantage when approaching investors or lenders.
What goes in the business plan?
The business plan is a comprehensive document that is created to describe the future of the venture, consisting of:
- executive summary
- company history and background
- clear description of the business concept and value proposition
- marketing analysis including competitive analysis and market development plan
- production and operations assessment and development plan
- financial assessment and projections
- management and human resources assessment and plan
- implementation plan
- identification of resources
- proposed deal structure for investors (if appropriate)
- survival strategy describing inherent risks and mitigation strategies
- growth strategy
- exit strategy
The reader should be able to clearly understand what the value proposition is, why the business will succeed and how it is going to achieve this success. If the plan is being pitched to investors, the investor should understand as soon as possible what the proposed deal structure is and what the return will be. To do this you must support any claims and assumptions about what the business will do with realistic research. Unrealistic financial projections are a sure fire way to lose investors’ interest or for an owner to lose perspective.