By Greg Marsello
Vice President for Organizational Development, LERN
Lately, LERN has received requests from members about the development and writing of business plans.
A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It usually contains background information about the organization attempting to reach those goals. Normally business plans are developed to generate investment funding and/or bank loans.
What differentiates a business plan from other plans (e.g. one-year operational plans or strategic plans) is that a business plan has detailed and specific financial information and forecasts. It’s supposed to be a plan for the organization as a whole, not for a particular project. Normally, businesses develop business plans in order to get start-up funding and resources.
A business plan is a written plan setting out what an organization intends to do over a period of time, say one to three or five years, and what money and other resources the business will need in order to achieve the goals of the business plan. If the research provided is accurate and the business plan followed, the funding should support success. Many times business plans are turned down because the research is flawed, the projections unrealistic, the principals do not have the necessary skills - thus many business plans are not funded (less than 10 out of 100).
Business Plan Structure
A business plan typically includes the following sections: executive summary; business description and vision, thus market need; definition of market, including competition; description of products and services – your solution; organization and management including technology required; marketing and sales strategy; financials (including cash flow projections) and financial management; and exit strategy.
- The business plan should tell a compelling story about your business, explaining who, what, when, where, how and why.
- Your business plan should be focused and clear. It is not about the number of pages.
- The business plan should define specific business objectives and goals with general parameters to guide the organization.
- Writing a business plan should force logic and discipline into a business.
- A good business plan is a living document. It should be updated regularly.