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Develop an Outline
Start by defining an outline (i.e. a table of contents) of your plan.
This will allow you to to concentrate on the essentials of planning the
business rather than becoming too absorbed in the detailed drafting of
your plan. It will allow you to see the wood from the trees.
Having created a basic structure for your business plan, the next task
is to expand this structure to include subheadings and appendix titles
(see the outline for detailed suggestions).
This extended structure should be critically reviewed to ensure that all
the salient elements of the plan are included and that it has a logical
flow. This approach should also ensure that the plan has an appropriate
levels of detail and is correctly targeted at its audience - investors,
directors/shareholders, financial institutions etc. For example, a structure
which is mainly devoted to detailed technical descriptions of products
would be completely unsuited to a plan being used to raise bank finance.
Use the outline as the "road map" for your plan and then write
up each section concisely but comprehensively. Only address matters of
real substance and major significance. Work on the assumption that whoever
reads your plan will be completely unfamiliar with the business or project
and will be seeking answers to relatively basic questions and key issues,
for example, what will the business do, will it make money etc.
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Prepare a Work Program
Once the plan's structure has been defined, it can be used as a checklist
and basis for a work program and timetable to complete the plan. This
work program will often entail extensive research and thought prior to
the commencement of writing. For example, formal market research may be
needed before sales volumes and prices can be determined. Another example:
professional advice may be required to assess capital expenditures in
relation to the acquisition of premises and so on.
The work program could correspond to key sections of the proposed plan
and could include timetables, resource allocations and cost estimates
as indicated in the following chart:
| Section
of Plan |
Researched
by |
Written
by |
Elapsed
time (weeks) |
Cost
($) |
Priority |
Key
Actions |
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Further Suggestions
Some additional tips and suggestions:
- Be absolutely clear about the primary purpose and audience of the
plan from the outset. If the plan has to serve multiple purposes, consider
producing tailored versions (or tailored summaries).
- Allow enough time to produce revised drafts of the plan - three/five
drafts would not be unusual.
- Write the Introduction, Summary and Conclusion of the plan after
the plan's main parts have been finalized.
- At an early stage, make some high-level sales and financial projections
(covering 1-3 years) to explore the general direction and size of the
business, likely viability and possible funding amounts and mix. For
this purpose, consider using the free On-line
Financial Planner or the Quik-Plan facility within Exl-Plan,
our range of financial planners for use with Excel.
- If the elapsed time needed to prepare the plan and commence its execution
is lengthy, set the start date for financial projection close to the
commencement of execution. For example, if you begin preparing a plan
in January and hope to raise startup finance by October, the start date
for projections might be set to September. Any expenses incurred before
this date should be rolled up into the opening balance sheet for the
projections.
- Seek external assistance sooner rather than later. This may take the
form of software tools, consultancy assistance in the form of specific
assignments, or mentoring and counseling on an as required basis.
- If planning a significant business, ensure that a management team
has been identified (and possibly in place) before the plan is finalized.
Explain when and how vacancies will be filled.
- Identify and cultivate possible key recipients of the plan during
the plan's preparation. This will ensure that when the plan is finally
presented, these contacts will have some prior knowledge of its contents
and the promoters and, where appropriate, the views of the contacts
may have been taken into account during the preparation process.
- Start compiling the plan at the sections devoted to market research/analysis
and sales forecasts/plans, or with details of the proposed product/service
offerings. Leave the detailed financial projections aside until all
details in relation to sales, costs, expenses, operations, capital investment
and possible sources/types of finance have been resolved
More Help
If you have a problem or query relating to the compilation of a business
plan which is not covered in the various white papers, you may wish to
use our free and confidential On-line
Business Plan Advice Service.
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