Business Plan Outline

Classic business plan: Sun Microsystems—the first few words say it all.

Business Plan Outline: This is a business plan outline of a business plan that is less than 20 pages, plus appendices. Naturally you are going to make it specific to your situation. You will adapt it according to the purpose of your plan. Your business plan may be to serve as evidence of why the bank should give you a loan. Maybe it is going to be the document to serve as a means of persuading someone to become your co-founder.

On the other hand the business plan outline may just be a tool to help you ensure that you have covered all the bases. The business plan outline below does cover all the bases, but you should not slavishly set yours out exactly in the chapters below. There are people who can produce a convincing document on the back of a napkin. Maybe you are one of those.

Business Plan Outline—Chapters

1. An Executive Summary—written last (only 1 page, compelling)
2. A 30 word sell—based on the Value Proposition (contribution, worth & importance of idea)
3. Market: The Problem and Its Solution—who needs the product(s) and services (and how much: past and projected—nature/size of opportunity) and why 2 pp max
4. Relationships (some call this Mission and Values)—no platitudes & show possibilities, not competitive aspirations; what are your ‘untradables’ with people and the planet 3 paragraphs max
5. Value Proposition—customer problems and how the customer gets value ½ page max
6. Business Model—how will the business make money 4 paragraphs max
7. Scale & Schedule—how big and when (summary financials) 1 page
8. Products & Services—what they are and how do they provide value: advantages & benefits vs. existing offers 2 pp max
9. People—the ones who’ll make it work and why (key = lead entrepreneur), in the company and outside; the special competences (doers & advisors) 1 page max
10. Marketing & Promotion—how’s the market to know and be converted or be dazzled ½ page max
11. Competition/Disruption—who or what are you up against (don’t say no one!) ¾ page max
12. Sales Strategy & Tactics—customer acquisition efficiency & method—you can’t knock on every door ½ page max
13. Distribution Channel(s)—how are buyers going to get the product—keeping costs to the bare minimum ¾ page max
14. Production—how will the product be built and clients serviced ½ page max
15. Development—how will the business stay ahead of the game—a one-product company is unlikely to make it 1 page max
16. Financial Plan—capital (including sources and uses); loan assumptions; summarized income statements, balance sheets + cash flow forecasts (know the difference between a cash flow statement and forecast); maybe a breakeven chart; and if you are trying to raise capital, a proposed exit plan (if desired) or possibilities 2 pp max
17. Operations—who, what, where, how ½ page max
18. Implementation Time Lines (and for goodness don’t go beyond 3 years—tops) 1 table
19. SWOT (Strengths, Weaknesses, Opportunities, Threats)—critical risks/success factors 2×2 grid diagram
20. Appendices—all the detail and data (especially financials for three years—first year monthly, thereafter quarterly: income statements, balance sheets & cash flow forecasts); a ‘subject background’ to the opportunity, sales forecast breakdowns, or technical details can be added.

Do not forget cover page with contact details (do not forget email and phone) + confidentiality/copyright (but do not ever ask for a non-disclosure agreement from a VC—you will never get one) and a Table of Contents. Each point in your executive summary should show a link to the appropriate section of the main plan.

A Lot of Work

The business plan outline makes it look like an awful lot of work to actually write it. Yes, it is.

However, as long as these issues are all covered, you will probably thought of everything. Yours is a special case and will prove the exception to the model I have offered. You may have a technology that needs description and the patents listing; the disruption you are going to cause may require an exposé of the present situation; you are exporting/importing and the conditions may not be obvious.

Another view, from Guy Kawsaki of Garage Technology Ventures is, “Here’s what a business plan should address: Executive Summary (1), Problem (1), Solution (1), Business Model (1), Underlying Magic (1), Marketing and Sales (1), Competition (1), Team (1), Projections (1), Status and Timeline (1), and Conclusion (1). Essentially, this is the same list of topics as a PowerPoint pitch. Those numbers in parenthesis are the ideal lengths for each section; note that they add up to eleven. As you’ll see in a few paragraphs, the ideal length of a business plan is twenty pages, so I’ve given you nine pages extra as a ‘fudge factor’.”

Here is even simpler good advice to replace the business plan outline, from a Silicon Valley venture capitalist, Draper Fisher Jurvetson (DFJ), but bear in mind this is coming from a place concerned with investing capital in your business. Going for a loan at your local bank may need a different sort of approach. DFJ says your business plan should contain the following information:

1. Investment size and structure requested
2. Description of the product or service
3. Brief history of the company
4. Business and marketing strategy
5. Analysis of the market and the competition
6. Full résumés of key management (highlighting industry and market expertise)´
7. Current financial statements and projections

Your business plan should be a working document for the company, used in long-term planning, and not simply a sales tool for fund-raising. The other purpose of the plan will be to serve as a benchmark against which to measure progress once you are in operation

More Help

• Startup Statements of Intent;
• Vision Statement;
• Business Model Planner;
• Critical Success Factors;
• Key Performance Indicators;
• and Business Plan Mistakes and How to Avoid Them.