2009
/ SBMS:
Experienced
Business
Mentors
Copyright 2009 (C)
[Small Business Plan: (Includes MarketingPlan)]
Template and guide to writing your business plan

BUSINESS & MARKETING PLAN

CONTENTS

1.1.Business Overview

1.2.Market Analysis

1.3.Competition

1.4.Business Analysis

1.5.Marketing Strategy

1.6.Product / Service Production

1.7.Business Structure/ownership

1.8.Key Business Objectives

1.9.Financial Plan

1.9.1.Establishment Costs

1.9.2.Source of Finance

1.9.3.Annual Operating Budget

1.9.4.Cash Flow

1.9.5.Breakeven Analysis

1.9.6.Balance Sheet

1.10.Action Plan

1.11.Sample Documents

1.11.1.Competition Analysis

1.11.2.Business SWOT Analysis

1.11.3.Financial Budget

1.11.4.Cash Flow Statement

1.11.5.Balance Sheet

1.11.6.Action Plan

General Instructions to assist you in completing this document

Do not make this document longer than is necessary. Consider the purpose that you are writing it for – if it is for your own use, then there is no need for a very long document, and even if it is for someone else to read (example- your banker), remember that everyone has limited time and also a limited concentration span. Make use of short, sharp bullet points which can be easily read and understood, ratherthan a long rambling essay that might bore the reader.

Use the suggested questions as headings, and attempt to provide the answers with a few lines of information. If you feel the need to provide additional information, we suggest that you provide additional information in the form of an addendum, at the end of the document.

Business Overview

  • State what the business is all about in general terms?
  • What industry is it in?
  • What are the products or services?
  • What are the key benefitsor solutions that you are going to provide?
  • Where the business will be in two to five years time, and how this will be achieved?

Market Analysis

  • Who will buy your products or services?
  • What is the geographical area that you intend selling to?
  • Is the market segmented and if so, how?
  • What influences will affect the market? Are there seasonal trends?
  • Is there any pricing sensitivity?
  • What competitive edge do you have?

Competition

  • Who are your competitors? Check the Internet or Yellow Pages and look in places you would expect them to advertise.
  • How do you compare to your competitors on pricing, product, promotion and distribution? How are you going to position your product or service against them?
  • You can make use of the list at the back of this document that will assist you in analysing your competitors, and creating a strategy to compete with them.

An Analysis of your Business

A SWOT analysis highlights the strengths and weaknesses within your business, and also identifies opportunities and threats in the external business environment.

  • Strengths are those that the company can exploit.
  • Weaknesses are areas of the business that need to be addressed.
  • Opportunities show the market place areas that can be built on.
  • Threats are those issues that could affect the business.

You may make use of the sample document at the back of this document that will assist you in analysing your business, and assisting you in creating a strategy to improve your business.

Marketing Strategy

List the key marketing strategies and explain briefly the actions that you intend taking to implement them. The strategies might include some of the following aspects:

  • Target Market – who are you selling to?
  • Pricing – what is your pricing policy, and how will it be used?
  • Distribution – how you intend to bring the products or services to the market
  • Sales Promotion strategy – how will you promote your product/services?
  • Describe the sales process you will utilise to sell your product or service
  • Advertising strategy – how do you intend to advertise your product/services?
  • Online strategy – your strategy regarding the use of a website
  • Promotion strategy - how will you promote your product and services
  • Branding strategy – how you intend to build your unique product/service brand
  • Literature – what kind of printed literature will use to promote your product/services
  • Customer Service – details what level of customer service will you provide to your customers
  • Product or Service launch plan- how will you launch your new business/product/service?
  • Annual marketing budget - what your total marketing spend will be for the next year.

Product/Service Production

This information will assist you in determining your Pricing Policy.

  • How will you determine the price to be charged for your product or service?
  • What are your costs of producing a product for sale, or the costs of offering a service?
  • How the product(s) or services(s) are to be produced and costed. Is there a manufacturing process or is it a bought-in item. The outline cost and price basis should be listed i.e. what proportion is material, labour and overhead recovery, all related to the selling price.
  • If it is a service then who provides it and on what basis is the cost charged out?

Business Structure/Ownership

Provide a clear description on the proposed ownership structure and why it is being chosen.

  • Are you going to operate as a Sole Trader; a Partnership; a Limited Partnership or a Proprietary Company?
  • Are there Trade Marks or Patents and will the company trade under a business name or a company name?
  • Who will be the owners of the business? If there is more than one owner, have you drawn up a Shareholders Agreement, to cover the rules under which the shareholders will manage the business?

Key Business Objectives

  • What are your key objectives or goals for the first year of operation? These objectives should all be succinct and must be both quantifiable and measurable
  • It is important to separate your objectives/goals under the operating sections of your business such asMarketing, Production,Finance, etc. For example:

Marketing:

  • To achieve sales in the first quarter of $X.
  • To achieve sales in the second quarter of $ X.
  • To achieve X % market share.
  • To attract X number of new customers by YYY date.

Finance:

  • To achieve a maximum debtor days of X.
  • To reduce the overdraft from $X to $Y.
  • To have a positive cash flow by X date.

Financial Plan

It is important that you produce a Financial Plan that will allow you to budget the financial requirements of the business, as well as to set your financial goals for the future of the business. This will allow you measure your business progress against the financial goals that you have set yourself in your financial budget.

Establishment Costs

If you are setting up a new business, it is important that you determine the total funds required to set up the business and cover its operating costs until it becomes profitable, and the source of your initial funding.

Source of Finance

The projected cash flow will show how much money is required to set up and commence the operation of the business. You need to explain where this money is coming from and where, if necessary, future additional finance might be available, for say, expansion. This is critically important if the Business Plan is going to be used to obtain finance.

Annual Financial Operating Budget (Profit and Loss)

  • The financial/operating budget for the first 12 months should be calculated.
  • Make sure that you include all Sales Revenue, Cost of Sales (what the product costs are), the resultant Gross Profit/Loss and all the Overhead Expenses. It is important to attempt to be realistic in your expectations of sales, as well as costs.
  • At the end of this document, we have provided an example of a basic Profit and Loss schedule. It is important for you to give careful thought to the make-up of the items, particularly the expenses, and you may change the heading to suit your type of business.

Cash Flow

  • Cash Flow should not be mistaken for Profit, and it is possible for a business to be profitable, but to still run out of cash. It is critical to ensure that you have some understanding of where your cash is, and to budget on the amount of cash that you will require in order to successfully operate your business, as well as to fulfil your financial obligations to your employees, creditors, shareholders and bankers.
  • The projected cash flow highlights the surpluses and shortfalls of cash. it records when you actually receive cash from sales (as opposed to when you might invoice a product on payment terms) and any other cash receipts less cash payments made for, buying product, overheads, tax, etc.
  • The Cash Flow schedule should commence right at the start of the new business set-up with a zero Bank Balance and with the initial cash investment inserted. This ensures that the true cash requirement of the business, from start-up, is tracked.
  • At the end of this document, we have provided an example of a Cash Flow Statement, which can be changed to reflect aspects important to your business.

Break-even Analysis

  • A break-even analysis is a calculation to show the level of sales or services required to pay for all the overheads of the business, without making any profit. This should be calculated over a 12- month period and can easily be constructed from the Profit & Loss and Cash Flow Statements.

Balance Sheet

  • The Balance Sheet identifies the net worth of the owners of the business and how it is made up, at a particular point in time. It brings together the results from the Profit & Loss Statement and the Cash Flow Statement. It is therefore a useful Statement to complete particularly if the new business is going to be reliant on borrowed money. The lack of sufficient equity in a new business is the greatest cause of failure.
  • We have provided an example of a Balance Sheet that can be expanded if necessary.

Action Plan

  • While writing a Business Plan is a valuable exercise, the key to the plan is to ensure that all the various strategies are implemented in the time specified.
  • To ensure that it does serve the purpose of guiding your business development it is important to now set down the specific tasks that have to be done to achieve the Objectives/Goals set.This is done by preparing an Action Plan.
  • The purpose of the Action Plan is to act as a checklist of the key actionable items and the time they have to be done by and who is to do them. An example isprovided at the end of this document, and can be adjusted to suit your requirements.

COMPETITOR ANALYSIS LIST

  • Who are the competitive products, or businesses? How do you compare to your competitors on pricing, product, promotion and distribution?
  • Tabulate a list that shows their strengths and weaknesses, and list what you can do to take advantage of them, that will give you a competitive edge over them.

Name of Competitor
WHAT ARE THEIR STRENGTHS? / WHAT ARE THEIR WEAKNESSES? / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
Name of Competitor
WHAT ARE THEIR STRENGTHS? / WHAT ARE THEIR WEAKNESSES? / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
Name of Competitor
WHAT ARE THEIR STRENGTHS? / WHAT ARE THEIR WEAKNESSES? / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

SWOT ANALYSIS

OUR STRENGTHS / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
OUR WEAKNESSES / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
MARKET OPPORTUNITIES / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
EXTERNAL THREATS / WHAT ACTION CAN WE TAKE?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… / …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

FINANCIAL OPERATING BUDGET

Projected Operating Budget
Month / Jul / Aug / Sep / Oct / Nov / Dec / Jan / Feb / Mar / Apr / May / Jun
Sales Revenue / Total
Less
Product Costs
Gross Profit
Less Expenses
Salaries
Rent
Telephone
Electricity
Advertising
Entertainment
Legal
Office Supplies
Motor Vehicle
Other
Other
Total Expenses
NET PROFIT
Provision for Tax
PROFIT AFTER TAX

CASH FLOW STATEMENT

Projected Cash Flow
Jul / Aug / Sep / Oct / Nov / Dec / Jan / Feb / Mar / Apr / May / Jun / Jul
OpeningBank Balance
Cash Receipts
Investments
Sales Income
Bank Interest
Other Income
Cash Inflow
Total Cash Available
LESS
Cash Payments
Admin Costs
Marketing
Cost of Goods
Interest Expense
Capital Costs
Tax
Other Payments
Total Payments
Net Movement
Closing Bank Balance

BALANCE SHEET

BALANCE SHEET / Start Date / Six Months / Year End
ASSETS
Cash
Debtors
Stock
Capital (plant & equipment)
Other
Total Assets
LIABILITIES
Loan
Overdraft
Creditors
Provisions
Total Liabilities
Net Assets
SHAREHOLDERS EQUITY
Capital (Shares)
Retained Profits
RETAINED SHAREHOLDERS EQUITY

ACTION PLAN

Key Objectives / Task / By Whom / By When
MARKETING
FINANCE
SBMS: Experienced Business Mentors (c) 2009 / 1