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The best way to shape your plan is by creating a detailed outline. This will ensure that you have included all pertinent information in an organized fashion, with a strong executive summary near the beginning, have all necessary documents in the appendices, and prepared a clear, clean Cover Sheet. The following sample outlines were designed to summarize both a simple plan and a complex plan for two very different companies. Outline For A Simple Business Plan Remember that the exact headings of the subjects, and even whether these subjects should exist in your outline, depend on the specics of your business and the purpose of your plan. I. Cover Sheet A. Essential information, arranged from the top of the page to the bottom, in this order: 1. Name of your company 2. One sentence statement about your company 3. Your name and any partners names 4. Contact name and information including telephone, fax, e-mail and mailing address 5. Current month and year Table of Contents A. List of key sections and appendices B. Add page numbers on which they appear

II.

III. Executive Summary (less than one page) A. Statement of business opportunity B. Statement of what you require in loans or investments C. Purpose of plan D. Expected nancial results E. Compare against the Ten Action Steps to make certain all are covered

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IV.

Description of the Business A. Product/service description and strengths B. For existing business, give history and financial performance C. Organization of the business, including management and ownership D. Legal structure Market Overview A. Describe target market by geography, income, and demographics B. Competitive products, current buying patterns and market trends

V.

VI. Industry Overview A. Competitors history, products, and nancial performance B. Trends, such as product changes, technology adoption, or consolidation C. Projections for the future D. Regulatory issues VII. Business Opportunity A. Business strategy B. Product/service strengths C. Marketing and sales strategies D. Research to support projections E. Time line for starting and operating business VIII. Financial Projections A. Statements 1. Historical nancial statements, if business exists 2. Projected nancial statements: a. Income statements

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b. Balance sheets c. Cash flow statements d. Debt-service projections e. Comparisons to industry standards f. Returns analysis B. Six Key Financial Assumptions 1. Startup costs 2. Sales and revenue 3. Operating costs 4. Borrowing 5. Equity returns 6. Company value IX. Appendices A. Rsums of key managers B. Newspaper, magazine articles; industry trade reports C. Key contracts, such as leases, employee agreements D. More detailed nancials for the business E. Research to support projections Outline For A Complex Business Plan This outline is a comprehensive list of subjects you may wish to include in your plan. No plan needs to be this detailed, but you should read the outline and select those topics that relate to your business. Some topics are repeated because they should be considered in multiple areas, such as pricing and descriptions of competitors, but duplicating these issues in your nal business plan is not necessary. I. Cover Sheet A. Essential information, arranged from the top of the page to the bottom, in this order: 1. Name of your company

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2. 3. 4. 5. II.

One sentence statement about your company Your name and any partners names Contact name and information including telephone, fax, e-mail and mailing address Current month and year

Table of Contents A. List of key sections and appendices B. Add page numbers on which they appear

III. Executive Summary (less than one page) A. The Purpose of the Plan 1. To obtain a bank loan 2. To attract investors 3. To document an operational plan for controlling the business 4. To test the nancial feasibility of a business concept 5. To attract partners, vendors, or suppliers B. The Company 1. Overview of the needs the company will meet 2. The products or services you will offer 3. Legal structure C. Market Analysis 1. The characteristics of your target market (demographic, geographic, etc.) 2. The size of your target market D. Market Research 1. Market research that you have carried out to test and prove key elements of your plan including product or service characteristics, location viability, pricing, packaging, or target market acceptance E. Product or Service Research and Development 1. Major milestones in product development and progress in meeting them

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F. Marketing and Sales Activities 1. Marketing strategy 2. Sales strategy 3. Keys to success in your competitive environment 4. Sales and marketing efforts to date G. Organization and Personnel 1. Key managers, owners, directors, advisors and employees 2. Organizational structure H. Financial Data 1. Funds required and their use 2. Historical nancial summary 3. Prospective nancial summary (including a justication for prospective sales levels) 4. Projected returns for equity investors 5. Debt coverage levels IV. Company Description A. Nature of Your Business 1. Marketplace needs to be satised 2. Method(s) of need satisfaction 3. Key specic customers or market niches B. Your Distinctive Competencies and Competitive Advantages (primary factors that will lead to your success) 1. Elements of superior customer-need satisfaction 2. Cost advantages, such as production/service delivery efciencies 3. Personnel 4. Distribution 5. Marketing program 6. Sales organization 7. Patents, copyrights, brand names that you own 8. Location strengths

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Experience, knowledge, or reputation of founders C. Operational Strategies 1. Organizational structure 2. Key nancial incentives for your employees, partners, distributors, market reps and sales force 3. Control and feedback structures to ensure that goals are being met 4. Accountants, lawyers, consultants, directors and the expertise they provide V. Market Analysis A. Industry Description and Outlook 1. Description of industry and primary competitors 2. List of competitors, including their nancial information, strategies, histories, competitive strengths and weaknesses, products, and pricing 3. Size of the industry, currently, historically, and in projections 4. Industry characteristics: history and trends a. Technology changes b. Life cycle (is industry growing, maturing, consolidating, shrinking?) 1. Historically 2. Currently 3. In the future 5. Major customer groups a. Businesses b. Governments c. Consumers B. Target Markets 1. Description and characteristics of target markets

9.

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2.

3.

4.

5.

6.

a. Critical needs to be lled b. Extent to which those needs are currently being met c. Demographic characteristics such as age, gender, race, ethnicity d. Geographic location e. Purchase decision makers and inuencers f. Seasonal/cyclical trends Primary target market size a. Number of prospective customers b. Annual purchases of products or services meeting the same or similar needs as your products or services c. Geographic area d. Demographic characteristics e. Anticipated market growth Market penetration goals a. Market share b. Number of customers c. Geographic coverage d. Rationale for market penetration estimates, including research, testing, and competitors experiences Pricing/gross margin targets a. Price levels b. Gross-margin levels c. Discount structure (volume, promptness, payment terms, etc.) Methods by which specic members of your target market can be identied a. Directories b. Trade association publications c. Government documents Media plan a. Publications b. Radio/television/Internet ads & promotion

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c. Sources of inuence/advice d. Specic media plan including budgets, sample ad copy, and plan to monitor ad results 7. Purchasing cycle of potential customers 8. Key trends and anticipated changes within your primary target markets 9. Secondary target markets and key attributes a. Needs b. Demographics c. Signicant future trends C. Market Test Results 1. Information/demonstrations given to prospective customers 2. Reaction of prospective customers 3. Importance of satisfaction of targeted needs 4. Test groups willingness to purchase products/services at various price levels D. Lead Times (amount of time between customer order placement and product/service delivery) 1. Initial orders 2. Reorders 3. Volume purchases E. Competition 1. Identication (by product line or service and market segment) a. Existing b. Market share c. Potential (How long will your window of opportunity last before your initial success breeds new competition? Who are your new competitors likely to be?) d. Direct e. Indirect 2. Strengths (competitive advantages) a. Ability to satisfy customer needs

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b. Market penetration c. Track record and reputation d. Staying power (nancial resources) e. Key personnel 3. Weaknesses (competitive disadvantages) a. Ability to satisfy customer needs b. Market penetration c. Track record and reputation d. Staying power (nancial resources) e. Key personnel 4. Importance of your target market to your competition 5. Barriers to entry into the market a. Cost (investment) b. Time c. Technology d. Key personnel e. Customer inertia (brand loyalty, existing relationships, etc.) f. Existing patents and trademarks F. Regulation 1. Customer or governmental regulatory requirements a. Methods of meeting the requirements b. Timing involved in meeting the requirements c. Cost of meeting the requirements 2. Anticipated changes in regulatory requirements 3. Positives of regulations a. Barriers to entry for potential competitors b. Patent, copyright, trademark protection c. Government support of industry d. Trade protections for industry

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VI. Products and Services A. Detailed Product/Service Description (from the users perspective) 1. Specic benets of product/service 2. Ability to meet needs 3. Competitive advantages 4. Present stage (idea, prototype, small production runs, etc.) B. Product Life Cycle 1. Describe the product/services current position within its life cycle 2. Factors that might change the anticipated life cycle a. Lengthen it b. Shorten it C. Copyrights, Patents and Trade Secrets 1. Existing or pending copyrights or patents 2. Anticipated copyright and patent lings 3. Key aspects of your products or services which cannot be patented or copyrighted 4. Key aspects of your products or services which qualify as trade secrets 5. Existing legal agreements with owners and employees a. Non-disclosure b. Non-compete agreements D. Research and Development Activities 1. Activities in process at this time 2. Future activities (include milestones) 3. Anticipated results of future research and development activities a. New products or services b. New generations of existing products or services c. Complimentary products or services d. Replacement products or services

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4.

Research and development activities of others in your industry a. Direct competitors b. Indirect competitors c. Suppliers d. Customers

VII. Marketing and Sales Activities A. Overall Marketing Strategy 1. Competitive advantages a. Pricing b. Delivery time c. Service d. Product features e. Brand name f. Reputation g. Status 2. Market penetration strategy a. High protability b. signicant market share 3. Growth strategy a. Internal b. Acquisition c. Franchise d. Horizontal (providing similar products to different users) e. Vertical (providing the products at different levels of the distribution chain) 4. Distribution channels (include discount/protability levels at each stage) a. Original equipment manufacturers b. Distributors c. Retailers 5. Communication a. Promotion b. Advertising, including detailed media plan

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c. Public relations d. Personal selling e. Printed materials (catalogs, brochures, etc.) B. Sales Strategies 1. Sales force a. Internal vs. independent representatives (advantages and disadvantages of your strategy) b. Size c. Recruitment and training d. Compensation 2. Prospecting a. Identifying prospects b. Prioritizing prospects c. Qualifying prospects (separating prospects from suspects) 3. Sales activities a. Number of sales calls made per period b. Average number of sales calls per sale c. Average dollar size per sale d. Average dollar size per reorder VIII. Operations A. Production and Service Delivery Procedures 1. Internal 2. External (subcontractors) B. Production/Service Delivery Capacity 1. Internal 2. External (subcontractors) 3. Anticipated increases in capacity a. Investment b. New cost factors (direct and indirect) c. Logistics (will expansion force you to slow or stop production for a time?) d. Timing

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C. Operating Competitive Advantages 1. Techniques 2. Experience 3. Economies of scale 4. Lower direct costs D. Suppliers 1. Identify suppliers of critical elements of production a. Primary b. Secondary 2. Lead-time requirements 3. Evaluate risks of critical element shortages 4. Describe existing and anticipated contractual relationships with suppliers IX. Management and Ownership A. Management Staff Structure 1. Management staff organization chart 2. Narrative description of the chart B. Key Managers (complete rsums should be presented in an appendix to the business plan) 1. Name 2. Position 3. Primary responsibilities and authority in your company 4. Primary responsibilities and authority with previous employers 5. Unique skills and experiences that add to your companys distinctive competencies 6. Compensation basis and levels C. Planned Additions to the Management Staff 1. Position 2. Primary responsibilities and authority 3. Requisite skills and experience 4. Recruitment process 5. Timing of employment

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Anticipated contribution to the companys success 7. Compensation basis and levels (be sure that they are in line with the market) D. Legal Structure of the Business 1. Corporation a. C-corporation b. S-corporation c. Limited Liability Company (LLC) 2. Partnership a. General partnership b. Limited partnership c. Limited liability partnership 3. Sole Proprietorship E. Owners 1. Names 2. Percentage of ownership 3. Extent of involvement with the company 4. Form of ownership a. Common stock b. Preferred stock c. General partner d. Limited partner 5. Outstanding equity equivalents a. options b. warrants c. convertible debt 6. Common stock a. authorized b. issued F. Board of Directors 1. Names 2. Position on the board 3. Extent of involvement with the company 4. Backgrounds 5. Contribution to the companys success

6.

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a. Historically b. In the future X. Organization and Personnel A. Complete Organization Chart 1. Positions 2. Reporting relationships 3. Narrative description of the organization chart B. Brief Position Descriptions 1. Primary duties 2. Recruitment and training 3. Stafng levels 4. Compensation a. Method b. Level C. Anticipated Human Resource Requirements 1. Organization chart 2. Stafng levels by position 3. Changes in compensation levels and/or methods

XI. Funds Required and Their Uses A. Current Funding Requirements 1. Amount 2. Timing 3. Type a. Equity b. Debt c. Mezzanine 4. Terms B. Funding Requirements Over the Next Five Years 1. Amount 2. Timing 3. Type a. Equity b. Debt 4. Terms

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C. Use of Funds 1. Capital expenditures 2. Working capital 3. Debt retirement 4. Acquisitions D. Impact of the New Funds on the Companys Financial Position 1. Dilution of ownership 2. Change in leverage levels (debt to equity ratio) E. Long-Range Financial and Exit Strategies 1. Going public 2. Leveraged buyout 3. Acquisition by another company 4. Debt service levels and timing 5. Liquidation of the venture XII. Financial Data A. Historical Financial Data (past three to ve years, if available) 1. Annual summaries a. Income statement b. Balance sheet c. Cash ow statement or statement of changes in nancial position d. Comparison to industry standards such as RMA data 2. Level of CPA involvement (and name of rm) a. Audit b. Review c. Compilation B. Prospective Financial Data (next ve years) 1. Next year (by month or quarter) a. Income statement b. Balance sheet c. Cash ow statement d. Capital expenditure budget

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2.

3. 4.

e. Returns analysis f. Debt service schedule Remaining four years (by quarter and/or year) a. Income statement b. Balance sheet c. Cash ow statement d. Capital-expenditure budget e. Returns analysis f. Debt-service schedule Summary of signicant assumptions Type of prospective nancial data a. Forecast (managements best estimate) b. Projection (what-if scenarios)

XIII. Appendices or Exhibits A. Rsums of Key Managers B. Pictures of Products C. Professional References D. Market Studies E. Pertinent Published Information 1. Magazine articles 2. Books F. Patents G. Signicant Contracts 1. Leases 2. Sales contracts 3. Purchases contracts 4. Partnership/ownership agreements 5. Stock option agreements 6. Employment/compensation agreements 7. Non-compete agreements 8. Insurance a. Product liability b. Ofcers and directors liability c. General liability H. Financial Commitments

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1. 2. 3.

Letters of intent from funding sources Bank commitment letter Letters of interest from potential customers

By the time youve completed your outline, the best length for your business plan should be apparent. Although most quality plans tend to be in the twenty to thirty page range, this is only a guideline, not a rule. Write your executive summary last, and make sure it covers all Ten Action Steps. The following sample business plan for S & J Advertising is strong because it covers all Ten Action Steps in very few pages, but in a manner that a banker would be hard pressed to ignore. I adapted it from a similar plan created by a group of advertising executives lead by Neal Newman and Bill Parshall, two veteran broadcasters. They never executed this plan because other opportunities developed for them, but they passed it on to a group in another city that used it to build a successful agency.