Preparation & Review of
ENTREPRENEURIAL ASSISTANCE CENTER
Business Plan: the Basics
• What is a business plan?
• Why write a business plan?
• Feasibility of a business plan
• Anatomy of a business plan
• Common mistakes of a business plan
• A good business plan
What is a business plan?
• A business plan is a document that reviews
the operations, finances and objectives of a
• A business plan contains the detailed
arrangement, target dates and resources
showing how the operations, finances and
objectives are to be realized.
What is a Business Plan:
And why you should have one!
• Most people compare business plans to road
maps which indicate how to get from one
point to another. There is some truth to that.
However, a business plan is more than just a
map. It is also a guide that can help identify
"how" to get to your destination, save money
and make the right investment.
Have you ever been in a guided tour?
• If you have been in a guided tour then you know
what I am trying to relate. With a map you can
see the points of interest. With a guide you can
decide which places you'd want to go back and
spend more time to make your trip more
• In the same way, preparing a business plan can
help you identify the areas that you should spend
more time to make your business launch much
Starting a business without planning
can be dangerous and even costly!
• Like in guided tours, planning for your business
can warn you about places not to go or the things
you shouldn’t do.
• On a tour, you are suggested about the better
places to shop and dine. You even get advise as to
how to make your adventure "cost-effective."
• Similarly, investing in a business plan can help
determine the best strategy to launch your
business, define your strengths and weaknesses,
and identify opportunities and threats right from
Why write a business plan?
From the Business Owner’s Perspective:
Does my business make sense?
• Operating assessment:
Have I covered all my basics?
• Communicates your business to others:
Will other people understand what I’m doing?
• Serves as a basis for a financing proposal:
Will I be able to attract investors and raise capital for
• A blueprint and communication tool for your business:
Do I know what I’m doing, where I’m going?
• Banks want to understand that you know your
business; this builds confidence to lend you money
• Banks want to know if your business has the capacity
to repay a loan [will you generate enough cash flow]
• Much like banks, investors want to feel confident that
you know your business inside out before giving you $$
• Investors are looking for better than average returns,
may possibly come on board, and want to know your
business’ exit strategy [when to pull the plug]
Feasibility of a business plan
• What is the demand for my product/service?
• Is there a market for my offering?
• Who are the competitors in my market?
• Is this a “niche market” product/service?
• How will I reach my target market?
• What is the potential financial growth of this
• Do I have management, sales, marketing, finance
and operations experience?
Other questions to ponder…
• What is the cost to develop my product?
• Do I have sufficient funds to start my
• Is financing available and do I qualify for it?
• What’s the cost to continue to operate my
Personal Expenses + Business Expenses = Target Revenue
5 W’s of Business Plan Feasibility
• Who? - potential customers for your product
• What? - product or service provided by
• Where? - business location and customers
• When? - business launch/expansion
• Why? - business viability
• How? - business operation, products/services
Anatomy of a Business Plan
Before getting into the nitty-gritty of the plan, lets review all the
components that should be included in your document:
1. Cover Sheet
2. Table of Contents
3. Executive Summary
4. Company Description
6. Target Market
7. Industry Analysis
8. Competitive Analysis
9. Sales & Marketing
12. Financial Analysis
13. Appendix (supporting documentation)
1. Executive Summary
This is the section where you “tell your story”
and capture the reader’s attention. This
section includes a summary of the whole
plan and is simply stated in one-to-two
pages. Although this section is found at the
beginning of the plan, it is recommended
that you write it last, after you have
explained your business strategy in whole.
II. Company Description
In this section, you will describe the nature of
your business. What is your business selling or
providing? Explain the business structure (sole
proprietor, corporation, partnership), your
business model, location, and business goals and
objectives. You should also include the amount of
money needed to start your business. Include
milestones for your business.
III. Product or Service
This section of the plan explains why you’re
(going) in business and provides a complete
explanation of your product or service, the
need this product will fill in the market, your
company’s unique selling proposition (USP),
and other relevant information about what
you are going to sell or provide.
Market & Industry Analysis
IV. Market & Industry Analysis
In this section, you will explain the reasons for
starting the business by describing the market,
the consumers and the competitors. This part of
the plan must include the necessary data to
justify your business success by presenting
independent sources that support your reason to
go into business. This section explains why
people would want to buy your product/service
and explain your business competitive
advantages. Include a SWOT analysis here.
V. Marketing Plan
This part of the plan explains how you intent to
reach your target audience and provides a clear
and explicit description of the product’s (service)
plan, pricing strategy, promotional strategy and
distribution. The marketing plan explains how
your company will be positioned in the
marketplace and how much it will cost you. In
this section you will also explain branding
strategies and identify your company’s corporate
This section explains the day-today cycle of
your business’ operations. You should include:
the business location, manufacturing,
distribution, purchasing decisions, hours of
operation, and a time-and-action calendar
that illustrates how these steps will take place.
This section explains who are your business
key players, their roles and responsibilities.
Also a management plan for expansion should
Sales & Financing Plan
VIII. Sales & Financing Plan
This section describes your sales objectives
and will illustrate your business growth during
the first three years. This part of the plan
supports the Marketing Plan section and
shows the need for financing your business
IX. Financial Projections
In this section you will show your company’s
financial growth in numbers! How much money
(if any) will your company make the first, second
and third year? Explain your breakeven point.
Include in this section cash flow statements,
profit and loss statements, the company’s
balance sheet, and a statement of assumptions
describing your methodology for arriving at your
Appendix & Supporting Docs
X. Appendix & Supporting Documents
An important part of the plan is the
documents that support your business
research. You must also include the
management résumé, personal financial
statements, copies of receipts for inventory
purchased, leases, and any other supporting
documentation that is compelling to your
Often times, entrepreneurs make the following
• The plan has not contact information, table of
content or cover sheet.
• The plan lacks research or inaccurate data
• The target market is poorly defined or not clear
• Competition not identified and no SWOT analysis
• Financials do not make sense.
• Inconsistencies along the plan
• Sepllnig nad Garmamr
A Good Business Plan
• Clearly defines product/service
• Clearly defines target market and provides thorough
• Identifies competitive advantage, USP
• Includes a strong step-by-step marketing plan
• Includes a milestone chart
• Clearly articulates operations and management
• Includes realistic financial expectations and charts
• Is proof-read, clear of spelling mistakes and grammar
• Be concise! Try to articulate your business plan in 20 pages
(+/-). Line spacing no less than 1.5 and 1” margins.
Financials and Appendix are not included as part of your
business plan page count.
• Engage your reader. Write as if you’re talking, not preparing
scientific research or thesis. Let the plan articulate from
your head to the paper with ease, as if you’re explaining it
to a 12-year old!
• Highlight or focus on business trends, features and benefits
of your product/service, new technologies, etc.
• Answer the Who, When, What, Why, Where and How?
• Presentation: Prepare the plan in nicely bounded copies,
free of stains. Also make a PDF in case you have to email it.