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Business Management Guide Business Plans Part 4 – Advanced Business Plan Writin

Business Management Guide Business Plans Part 4 – Advanced Business Plan Writing Guide This guide is provided as a reference. It details what content banks and investors might look for in a business plan for larger companies, such as those with 25+ employees and/or more than 3 million gross sales. Companies of this size should consult with experts to help write such a plan. TCIA Tree Care Business Guide Advanced Business Plan Writing Guide Plan Your Work.................................................................................................................. 3 Sample Plan Writing Guide ............................................................................................ 3 1. Introduction............................................................................................................. 9 2. Summary............................................................................................................... 10 3. Mission, Strategies etc. ......................................................................................... 13 4. Present Status........................................................................................................ 15 5. Services................................................................................................................. 17 6. Profiles of Target Markets .................................................................................... 17 6.2 Competition......................................................................................................... 18 6.3 Customers ........................................................................................................... 18 6.4 Market Size, Sales & Share Forecasts ................................................................ 18 7. Marketing Strategies, Sales Plans & Projections.................................................. 19 7.1 Marketing Strategies & Sales Plans.................................................................... 19 8. Operational Plans.................................................................................................. 20 9. Management & Administration ............................................................................ 21 10. Financial Projections........................................................................................... 23 10.1 Key Assumptions.............................................................................................. 24 10.2 Projected Income Statements............................................................................ 24 10.6 Ratio Analyses .................................................................................................. 28 11. Funding Requirements & Proposals ................................................................... 28 12. Implementation ................................................................................................... 29 13. Conclusion .......................................................................................................... 29 © Copyright 2005 Tree Care Industry Association. www.treecareindustry.org 2 Plan Your Work The importance of a comprehensive, thoughtful business plan cannot be overemphasized. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives. "The business plan is a necessity. If the person who wants to start a small business can't put a business plan together, he or she is in trouble," says Robert Krummer, Jr., chairman of First Business Bank in Los Angeles. Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don't have enough time. But just as a builder won't begin construction without a blueprint, eager business owners shouldn't rush into new ventures without a business plan. Before you begin writing your business plan, consider four core questions: 1. What consumer needs does your tree care business fill? 2. Who are the potential customers for your services and why will they purchase them from you? 3. How will you reach and retain your potential customers? 4. Where will you get the financial resources to start and/or grow your business? Sample Plan Writing Guide This part of the TCIA Business Plan management guide describes the possible structure and contents of a business plan for a larger company. It is intended as a helpful guide and may or may not be practical for your business. It is divided into two main parts: Front of Plan and Body of Plan with the details spread over about twenty pages that correspond to the main sections of a business plan. It is aimed at new/established businesses, 25+ employees and/or over 3 million gross seeking to expand, raise finance etc. and needing to produce a comprehensive business plan for internal or external use. The company size might be 25+ employees and over 3 million gross sales. A smaller tree care business would not use all aspects of the business 3 plan in this sample guide, however the ideas and issues can be useful to review even when producing more basic plans. This guide may appear intimidating due to its length and detail. However, be mindful that: • The process of planning (thinking, exploring, researching, consulting and discussing) should be just as beneficial as the resultant plan. • It is far easier to correct errors of judgment or explore new options when writing a plan than when actually operating your business or when trying to implement changes. A sound business plan may not be a sure-fire route to success but it should help anticipate and resolve problems, and point the best way forward. The overall length of a very comprehensive plan for a larger business, as outlined here, could be anything between 27 and 47 pages excluding appendices. When budgeting your plan's length, go for the shortest possible plan consistent with your business's scale, objective of the plan etc. - aim for quality rather than quantity! A maximum number of pages is generally accepted at 50 pages. If you cannot detail your business and your plans adequately within 50 pages, bankers and investors may be lead to believe you are simply providing details to show how much you know, rather than to outline your future plans. Bear in mind that the overall length of the plan is likely to increase as writing progresses. If your plan gets too long, do some ruthless editing and redrafting. If it is any consolation, it should be much easier to shorten a long plan than to lengthen a short one! To get started with the Guide: 1. Review the entire guide and think through the most appropriate structure and flow for your own plan. 2. Continue this process by printing out the relevant pages from the Guide. 3. Construct a detailed Contents page incorporating your revised section headings to get the right overall framework for your plan. 4. Review your content's list and the guide's detailed notes to identify key gaps in your preparatory research and analysis. 5. Sort out these gaps before starting to write your plan. In other words, do your main planning before drafting a detailed plan - resist the temptation to start writing before you have done all the preliminary work, or have really decided what you want to say. 4 To help prepare for writing your plan, review this checklist before you begin: Preliminary Tasks Done 1. Complete market research and analyses 2. List and explain your company’s services 3. Form the basis of the management team 4. Prepare a strategic plan as framework for detailed plan 5. Decide the central purpose of the plan and its target audience 6. Locate professional advisers, such as SCORE volunteers, to assist with planning 7. Acquire any software tools needed to help prepare the plan 8. Research and compile a list of possible recipients of the plan 9. Ascertain any specific needs of likely key recipients Writing the Plan Done 1. Create a framework for the plan e.g. table of contents 2. Identify possible appendices, attachments etc. 3. Estimate page lengths for each key section 4. List main issues and topics to be covered within key sections 5. Assign work programs based on the framework and lists 6. Draft all key sections in a logical sequence 7. Check the preliminary draft for completeness and plug gaps 8. Stand back and take a detached overview of the draft 9. Let an outsider or adviser, such as a SCORE volunteer, critique the draft 10. Redraft, fine tune and spell check 11. Write the executive summary and plan's conclusion 12. Get an independent assessment of the final draft. Reviewing the Plan Done 1. Is the plan nicely presented - bound, page numbered etc.? 2. Has the plan been spell checked in its final form? 5 3. Is the plan's length appropriate to its purpose? 4. Have the business's (funding) needs been clearly stated? 5. Does the plan's summary stimulate interest? 6. Have all key questions been anticipated? 7. What likely objections remain unresolved? 8. Will the plan provoke the desired responses? Cover Page The cover page at the very front of a securely-bound business plan is an excellent opportunity to create a positive first impression. A business logo with a tasteful drawing or picture could look very attractive. The text and layout of a cover page might appear as follows: Strictly Confidential Date Copy Number: ____ of ____ XXX Business Name Business Plan Logo here Picture of product XXX Business Name XXX Address Tel No.: xxx Fax No.: xxx Contents Page The contents list of your plan performs three critical functions: 1. Explains the scope and structure of the finished plan to readers. 2. Provides an index to specific sections of the plan. 3. Serves as a road map and guide during preparation of the plan. 6 The third function is often overlooked but it is critical to the successful compilation of a business plan. Your time will be very well spent drawing up a detailed table of contents for the plan prior to any writing. Build up this table by progressively expanding main sections into sub-sections and even sub-sub-sections to cover all the key issues. This will allow you to: • Envisage the scale and scope of the plan. • Test the logic of the plan. • Determine the flow of text and ideas from one section to another. • Define the detailed contents of the plan. • Identify shortcoming in research and preparation. You should critically examine and fine tune the contents list and allocate page lengths to each section. This contents list can then be used as the basis for identifying and assigning tasks to be researched, analyzed or discussed prior to drafting. The uploads/Ingenierie_Lourd/ business-management-guide.pdf