Principles on Writing a Funding Ready Business Plan

In the article below you’ll learn the principles and correct layout to write a killer Business Plan!
Introduction to Writing a Business Plan

Whether or not you need a Business Plan to apply for a loan, funding or a contract. The structure below will assist you to compile a Business Plan in a Professional Layout. A Business Plan is an important document, although in many cases it isn’t followed to the letter, for either starting or growing a Business. However, a practical Business Plan gives you an opportunity to get your thoughts on paper on plan sufficiently. As the saying goes – if you fail to plan, you plan to fail.

At the Entrepreneurship School we believe in practicality. This belief prompted us to create a practical relevant approach to our Business Plans. The guidelines below is a practical outline of our Business Plans structure and it is also accepted by all relevant institutes in South Africa.

When writing a Business Plan, you need to keep the following basic principles in mind:
– Keep your content specific, short and in a well-structured format.
– Font Size: 11
– Font Options: Calibri or Arial.
– Ensure all the script (including financials) are the same font style and size.
– Headings needs to be ‘bold’ or in a larger font size to stand out.
– Be Practical, Relevant and Realistic.

Professional Business Plan Layout

1. Front Page
The front page of the Business Plan introduces your document to the reader. Keep this section neat and simplistic, remember the rule of first impressions.
Length: 1 Page.
Structure:
– Company Name.
– Company Registration Number.
– Company Logo (If you don’t have a logo, rather leave this area blank than adding a below par image that will damage your Business image).

2. Table of Contents
The table of contents provides the reader with a breakdown of the Business Plan and the page numbers of each section, this enables the reader with quick access to scroll to a specific area in the Business Plan for a review.
Length: 1 Page.
Structure:
– Microsoft Word provides a ‘Table of Contents’ tool.
– Use the Microsoft Word ‘Heading’ tool to write headings for the main sections of the Business Plan.
– After you’ve writtent the Business Plan, refresh the Table of Contents. Microsoft Word will align your Headings with the Table of Contents section.

3. Business Introduction

3.1) Business Summary
The Business Summary is a 1 page introduction to your Business. In this section you need to write in a clear style and summarise the Business Plan Document in a nutshell.
Length: 1 Page.
Structure:
– An Introduction to who the Business is and the history of the Business. (Paragraph: 3 – 5 sentences)
– Explain what the Business will do and in what Industry it will operate. (Paragraph: 3 – 5 sentences)
– List the services / products briefly in a bullet point format.
– Explain how the Business will deliver its services / products to the target market. (Paragraph: 5 – 8 sentences)
– Describe the vision of the Business and Why the Business exists. (Paragraph: 3 – 5 sentences)
– List the Gap in the Market and explain briefly the Model of the Business. (Paragraph: 3 – 5 sentences)
#Tip: The model is the method of how the Business will make money.

3.2) Financial Summary
The Financial Summary will provide the reader with a brief financial projection of the viability of the Business.
Length: 2 Pages.
Structure:
– Briefly explain in a nutshell the funding required to start / grow the Business. Also mention the timeframe in which the Business aims to pay back the loan and be profitable.
– Chart 1: Funding Projections.
– Chart 2: 5 Year Profit and Loss Projection.
– Chart 3: 5 Year Balance Sheet Projection.
– Chart 4: 5 Year Cashflow Projection.
– Chart 5: Break Even Analysis.
#Tip: The best method of compiling the financials and charts is on ‘Microsoft Excel’.

4. Business Purpose

4.1) Business Purpose
The Purpose of the Business comes down to the idea of the Business. How will the Business impact other people’s lives for the better.
Length: 1 – 2 Sentences.
Structure:
– State the business purpose in one or two sentences.

4.2) Business Vision
A Business Vision is the form or structure the business will take or it’s a description of the picture that shows the final outlook of what the business wants to achieve.
Length: 1 – 2 Sentences.
Structure:
– State the business vision in one or two sentences.

4.3) Mission Statement
A Mission Statement is what the Business is setting out to do. What is the mission of your Business?
Length: 1 – 2 Sentences.
Structure:
– State the business mission in one or two sentences.

4.4) Business Goals
List 2 – 3 growth phases you project for your Business and list the goals you aim to achieve in those phases for the Business to progress. These phases also requires deadlines in which the goals needs to be accomplished.
Length: 2 – 3 Growth Phases.
Structure:
– Name the growth phase that best suits your Business.
– List the goals for each phase in bullet points.
– Ad a deadline for each goal.

4.5) Business Values
Values are crucial for any Business, the values on which you build your Business will protect your Business Purpose and keep you accountable to ethical principles.
Length: List 3 – 5 Principles.
Structure:
– List the Business Principles in bullet points.

5. Business Model

5.1) Unique Advantage and the Business Model
Explain the Uniqueness of the Business and how is the Business going to make money.
Length: Half Page.
Structure:
– An explanation on the Unique characteristics of the Business and how the service / product offering is different than the competitors in the market. (Paragraph: 3 – 5 sentences)
– An explanation on the Business Model, the Business Viability and how the Business will make money.
(Paragraph: 3 – 5 sentences)

5.2) Services/ Products Analyses
Provide a detailed description of the Services/ Products that the Business will deliver.
Length: Half Page per Services/ Products.
Structure:
– Include basic detail e.g. cost, delivery time and requirements.
– Explain the product / service competitive advantage.

5.3) Marketing Strategy
Provide a detailed description of the Branding and Marketing Strategy. Include marketing channels e.g. Google, Facebook, LinkedIn etc.
Length: Half Page per marketing channel.
Structure:
– Short description of each channel.
– Strategic and tactical approach.

5.4) Sales Strategy
Provide a detailed description of the Sales Strategy. Include sales strategic and tactical steps.
Length: Half Page per sales channel.
Structure:
– Short description of each channel.
– Strategic and tactical approach.

5.5) Industry Analysis
The Industry Analysis is your research on the Industry and Market your Business will operate in. You can do research on Google, go into the streets and do personal cencus with the market or any other method that will provide you with sufficient information of the Industry you’re planning to enter. It is important to keep it practical and relevant. Be honest with your findings and always ensure you are focussed on the market, rather than being emotional about your Services / Products. From your research you need to be able to project the Industry growth for at least 5 years.
Length: 1 – 5 Pages.
Structure:
– Industry Introduction.
– Industry Opportunity.
– Industry Growth Statistics.
– Industry Growth Opportunity.
– List your sources.

5.6) Target Market Analysis
In order to be successful, you need to target the right market. To identify the correct market, you have to do proper market research and be very clear to who your market is and what they prefer.
Length: 1 – 2 Pages.
Structure:
– Target Market Location.
– Target Market Analysis.
#Tip: The market analysis consists of the Consumer Demographics and what these Consumers are interested in? (region, age, preferences, behaviour & religion)
– Target Market Gap / Opportunity.
– Target Market Trends.
#Tip: The Market Trends consists of Consumer Preferences, Demographic Shifts and how the product will be Created.

5.7) Competitor Analyses
To create a relevant competitive advantage, you need to understand the competition. This requires a detailed study of every aspect of the competitors and how you measure up in the market.
Length: 1 – 3 Pages.
Structure:
– List all your competitors and compare your Business as follows:
Location.
Target Market.
Services / Products.
Pricing.
Their Competitive Advantage.

5.8) Competitive Advantage.
Your Competitive Advantage is the factor that provides you with a competitive edge in the market. Ask yourself “Why will the consumer choose to do business with me and not with my competitors?”
#Tip: A Competitive Advantage is not a better service or price, a competitive advantage is a concept that makes a Business unique, something that the Business will do differently.
Length: 1 – 3 Pages.
Structure:
– Write 2 – 3 advantages that you possess over your competitors.

6. SWOT Analysis
Investors always want to see the SWOT Analysis of a Business. The SWOT Analysis consists of Strenghts, Weaknesses, Opportunities and Threads.
Length: 1 – 2 Pages.
Structure:
– List the Business Strenghts.
– List the Business Weaknesses.
– List the Business Opportunities.
– List the Business Threads.
#Tip: A SWOT Analysis reads best in a table.

7. General Information.
It is always good to provide the reader of the Business Plan with the General Compliance information of the Business.
Length: 1 Page.
Structure:
– All the Compliance information of the Business. (Company Name, Registration Number, Address etc.)
– List the Shareholders of the Business. (Name, Age, ID Number etc.)

8. Financial Analysis
The Financial Analysis of the Business Plan is by far the Most Important aspect of the Document. This is the section investors / funders will most thoroughly spend time on. The biggest mistake people make with their projections, is that they over project the profit of the Business. It’s crucial to be realistic and relevant, otherwise the investor will raise an eyebrow if the financials look to good to be true. If this is the case, you could loose the investors trust.
Length: 10 – 15 Pages.
– Financial Introduction.
– Funding Analyses.
– (12) Month Financial Projection.
– (12) Month Sales Volume Projection.
– (12) Month Profit and Loss Projection.
– (12) Month Cashflow Projection.
– (12) Month Break Even Projection.
– (12) Month Balance Sheet Projection.
– (12) Month Personnel Plan Projection.
– (5) Year Financial Projection
– (5) Year Profit and Loss Projection
– (5) Year Cashflow Projection
– (5) Year Balance Sheet Projection

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