Guidelines to Preparing a Business Plan
(business plan template at finish)
Purpose
The Business Plan is vital to:
- Clarify the promoter's original plans for the business which can act as a logical but flexible framework over 3 - 5 years;
- Raise finance for the business/project/proposal
- Act as a budget/benchmark against which future performance can be assessed and evaluated.
Characteristic of a Good Plan
- It is written by the Promoter - the entrepreneur should write as much of the plan as possible, any external advisor should only be there to advise.
- Be realistic - do not be over optimistic in your projections.
- Identification of critical success factors - those factors the entrepreneur reckons will make his/her business a success; and the areas where other businesses have failed, should be highlighted in the Business Plan.
- Multi-disciplinary approach - the best business plan is one that deals with all the aspects of the business, including technical, production, management, marketing and finance maintaining a balance between these areas.
- Timing - the timing horizons set out in the Business Plan must be realistic. It is important to set key dates and to be able to measure progress against objectives.
Content and Suggested Layout of a Business Plan
1 Executive Summary
- A two page summary of the entire plan covering all the areas of the Plan. This should be the last section of the plan to be written.
2 Index of Contents
3 Promoters/Directors Details
- name and contact address of promoters/directors.
- background, educational achievements, qualifications held, special awards,
- work/business experience to date, current status.
- curriculum vitae can be included in an appendix to the plan.
4 Business Structure and Management
- legal status of the business i.e. sole trader, partnership or limited liability company and details thereof;
- objectives/purpose of the business;
- organisation structure of the business;
- management team, their details, management record to date, qualifications, responsibilities, etc.;
- other personnel, their details, qualifications/work experience required, responsibilities, etc.;
- employment - total number of full-time/part-time staff at present and potential employment over following 1-3 years;
- training required - relevant training or employment schemes available.
5 Production/operations plan
This section will need to be addressed in detail particularly if the proposal is a manufacturing or food processing enterprise. The following areas should be covered where relevant:
- Outline of the project
- Location/exact address of proposed project
- Description of product(s)/service(s) to be produced/supplied, and the production process involved.
- Raw materials required, their availability, suppliers, cost of such material, average stock to be held, both in volume and value terms.
- Capacity of the production process
- Details regarding ownership of property/premises involved
- Terms of lease (if applicable)
- Size of premises/suitability/services and utilities provided for.
- Insurance needs - property/ public liability/ employer liability/ motor and equipment/ goods in transit/ medical and life insurance/ keyman insurance.
- Regulations - Planning/Health & Safety/ Environmental.
6 Details of investment planned for which grant aid is sought
7 Details regarding premises from which the business will operate
- A description of any building(s) to be constructed/altered/extended to include:
I. size/area of such works
II total cost involved (exclusive of VAT) and a breakdown of such costs. Such costs should be representative of quotations
received from 3 or more reputable
III suppliers/registered contractors/sub-contractors.
- A full detailed list of all equipment and machinery to be purchased including prices of each item exclusive of VAT, quoted by at least three reputable suppliers/sub-contractors. (Documentary evidence should be annexed to the business plan).
- An outline/listing of all other items for which investment is planned, and the cost (exclusive of VAT) for each of these
8 Marketing
- This should describe the particular market and the proposed marketing plan
(a) Market - details required would include the type of market, its particular characteristic, structure, segments, distribution channels etc.;
- market size in terms of both sales unit volume and sales value;
- market prospects including extent of home/export sales potential;
- competitors and their share, branding, pricing, distribution and promotional activities;
- target niche(s) identified.
This information should, ideally be supported by market research/surveys, where possible.
(b) The Marketing Plan, for your proposal, should cover a period of at least three years and include:-
- description of product(s)/service(s) to be produced/supplied;
- projected sales/market share/potential customers for your proposal;
- product design, packaging, branding, life cycle;
- distinguishing features from competition;
- trademarks, licences, patents, warranty status;
- pricing details, terms of trade, discount structure, etc.;
- selling methods;
- distribution methods/servicing of market/customers;
- customer structure i.e. numbers, concentration, location;
- sales promotions/advertising plans/public relations, publicity.
8 Financial Plan
- Up-to-date audited accounts covering at least the previous two years for any existing business(es) should be annexed to the business plan.
- Estimated costs of all requirements over a three year period for:-
- buildings;
- plant and machinery - specify main items and include carriage and installation costs;
- fixtures and fittings;
- office equipment;
- motor equipment;
- working capital - finance required for the day-to-day running of your business e.g. purchasing raw material, holding stock,
and carrying debtors, etc.;
- taxation commitments.
- Share of funds: indicate how it is proposed to fund your requirements in the period by addressing the following areas:-
- amount of own capital/partners investment;
- retained profits;
- grant aid (already approved/being sought);
- amount to be provided by way of borrowings (long/short term loans, overdraft, leasing) by whom, and the terms
of repayment and security being provided for all such debt finance being used/sought.
Any confirmation of such funding being available to the business should be annexed to the plan.
- You should provide projected Trading Profit & Loss Accounts and Balance Sheets for at least a 2 year period.
In addition, you should also provide cash-flow statements for a three year period, showing all anticipated receipts as they are expected to be received, and all payments at the time it is planned to make them.
Note: Assumptions used plus detailed costings should also be provided to support your plans. Professional advice may be needed in this area.
Business Plan Template EI2011.doc (size 94.7 KB)
Copy of cash flow template (with formula).xls (size 57.9 KB)
