Business plan guidelines: 12 elements a strong plan needs
Step-by-step guide to planning your new business
If you've never written a business plan before, it can be hard to tell exactly how to go about it. What kind of format do you use? Is there an ideal length? How should you order the different sections?
The following business plan guidelines have been provided by BUSINESS PLAN SERVICES in association with the London Business School.
- Language must be concise, and written in layman's prose in the 3rd person
- Each section must stand on its own and clearly define and satisfy its objective.
- All facts are to be supported with sufficient documentation, quoting the source of research as a numbered footnote.
- All conclusions drawn from facts are to be reasonable and credible albeit not definitive.
- Where appropriate, facts are to be supported with colour charts and graphs.
- Font choice should be readable and suitable, suggested use of Times/Arial – Size 11/12.
- Single spacing should be used between lines.
- Plan should contain subheads.
- Formatting on heads and subheads must be consistent. Heading 1 in black – size 12 font – and in BOLD CAPITALS. Heading 2 in dark blue – size 12 font – and in Bold Title Case.
- Page numbers to be shown on right hand bottom corner.
- Formatting on page numbers must be consistent.
- Bullet point marks should be used effectively
- Available client branding should be run through the plan as a header in the top right hand corner of each page
- The plan should contain enough white space for readability.
Cover page / Table of contents
The cover page should detail:
- the name of business;
- the main contact's name;
- full address details;
- the client's company logo; and
- reader confidentiality
Table of contents should be auto-generated using the Word tool, identifying 2 Header type levels.
It should also include the following list of appendices:
1. Executive Summary:
The section needs to read well in a positive yet realistic tone.
It must not be too fragmented into subsections to impair overall readability and detract from the appropriate tone for the target reader type
The length of summary should not exceed two pages, to include:-
- One or two sentences to clearly and succinctly describe the client's activity
- A brief description of the company's unique features.
- Any relevant background details including, where relevant,
- Details of when and why the company was formed.
- Details of any IPR
- A desription of the marketing history of the product/service.
- Outlines the company's annual sales, profits and overall performance to date.
- A brief description of key management.
- One or two sentences highlighting the size of the market and its growth potential
- Details of the nature and proposed source of the company's funding requirement.
2. Background / Introduction (if relevant) 3. The business
- Activities – USP
- Readiness for market
- Future activities
- Mission statement
- Legal and Capital Structure
4. Management, organisation and personnel This section needs to establish the credibility of the management team.
- List key management positions, outlining the primary job duties and responsibilities assigned to each position.
- Identify the individuals who are expected to fill each position and summarise each person's prior business experience and skills to illustrate how they are suitable for the relevant role
- Provide an explanation of how deficiencies /skills gap will be overcome.
- Identify the future management and personnel requirements to accommodate the business' growth
- Illustrate the business' existing structure in an Organisation Chart, showing anticipated changes/migrations within that diagram
- Explain the use of non-Execs, partners and sub contractors where appropriate
5. The markets
- Target Customers – identify and quantify (if possible)
- Market Trends, Size, Segmentation, Positioning
6. Competitive Analysis 7. Marketing
- Market Strategy, Pricing, Promotional Plans, Selling Channels
- Details of any test marketing
8. Operational Details
- Materials and Suppliers
- Transport and Distribution
- Insurance and Legal
9. Financial Overview
- Sales, Profit and Cashflow Models
- Sensitivity Analysis
- Notes on Financial Projections, Assumptions
- Funding Requirements