Lesson 4 Detailed outline of a business plan

LESSON 2: DETAILED
OUTLINE OF A
BUSINESS PLAN
MODULE 2
THE DEVELOPMENT OF A BUSINESS PLAN

Introductory Page
The introductory page should contain
the following:
The name and address of the company
The name of the entrepreneur(s), contact
number, email address, and website
address if available.
Brief description of the company and the
nature of the business

Executive Summary
This section of the business plan is prepared after the
total plan is written. About two to three pages in
length, the executive summary should stimulate the
interest of the potential investor.
Executive Summary should answer the questions:
• What is the business concept or model?
• How is this business concept or model unique?
• Who are the individuals starting this business?
• How they will make money and how much?

Environmental and Industry Analysis
Examples of these environmental factors
are:
• Economy. The entrepreneur should
consider trends in the GNP,
unemployment by geographic area,
disposable income, and so on.
• Culture. An evaluation of cultural
changes may consider shifts in the
population by demographics

Examples of these environmental factors
are:
• Technology. Technological development
will require the entrepreneur to make
careful short term marketing decisions
• Legal Concerns. The entrepreneur
should be prepared for any future
legislation that may affect the product or
service, channel of distribution, price, or
promotion strategy.

Examples of these environmental
factors are:
• Industry demand. Demand as it
relates to the industry is often
available from published sources
• Competition. Most entrepreneurs
generally face potential threats from
larger corporations.

Description of Venture
The description of venture should be
detailed in this section of the business plan.
This will enable the investor to ascertain the
size and scope of the business.
Describing the Venture:
• What is the mission of the new venture?
• Why will you be successful in this venture?
• What is your product(s) and/or service(s)?
• Where will the business be located?
• Why is this building and location right for
your business?

Production Plan
If the new venture is a manufacturing operation,
a production plan is necessary. This plan should
describe the complete manufacturing process.
Production Plan should describe the:
physical plant layout;
machinery and equipment needed to perform the
manufacturing operations;
raw materials and suppliers’ names, addresses,
and terms;
costs of manufacturing; and
any future capital equipment needs.

Operations Plan
This section goes beyond the manufacturing process (when the
new venture involved manufacturing) and describes the flow of
goods and services from production to the customer. A non-
manufacturer such as a retailer or service provider would also
need this section in the business plan to explain the chronological
steps in completing a business transaction.
It might include:
• inventory or storage of manufactured products;
• Shipping;
• inventory control procedures; and
• customer support services.

Marketing Plan
The marketing plan is an important part of the business plan
since it describes how the product(s) and/or service(s)
will be distributed, priced, and promoted. Marketing
research evidence to support any of the critical marketing
decision strategies as well as for forecasting sales should be
described in this section. Specific forecasts for a product(s)
and/or service(s) are indicated to project profitability of the
venture.

Organizational Plan
The organizational plan is the part of
the business plan that describes the
venture’s form of ownership, that
is, proprietorship, partnership, or
corporation. If the venture is a
partnership, the terms of the
partnership should be included. If the
venture is a corporation, it is important
to deal the shares of stock authorized
and share options, as well as the
names, addresses, and resumes of the
directors and officers of the
corporation.

Assessment of Risk
Every new venture will be faced with some
potential hazards, given its particular industry
and competitive environment. It is important
that the entrepreneur make an assessment of
risk in the following manner. The entrepreneur
should:
• indicate potential risks to the new venture;
• be a discussion of what might happen if these
risks become reality; and
• discuss the strategy that will be employed to
prevent, minimize, or respond to the risks
should they occur.

Financial Plan
It determines the potential investment commitment needed
for the new venture and indicates whether the business plan is
economically feasible. Financial planning is the process of
estimating the capital required and determining its
competition. It is the process of framing financial policies in
relation to procurement, investment and administration of
funds of an enterprise.

Appendix
The appendix of the business plan generally contains any
backup material that is not necessary in the text of the
document. Reference to any of the documents in the appendix
should be made in the plan itself.

Lesson 4 Detailed outline of a business plan

Lesson 4 Detailed outline of a business plan

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Lesson 4 Detailed outline of a business plan