7D0FA3DD-DB47-2586-3212-5681B836373C Business Plan Template 3 0|0|0|0
Even though the Executive Summary is at the beginning of your business plan, it’s usually the last thing you write. By the time you’ve completed the bulk of your plan, you’ll have a clear idea of what you want the Executive Summary to say and how you want your business perceived. This is a very important section of your plan and one which potential investors often make judgements on. It should convey the big picture as well as why your business is unique, its strengths (it could be your staff, your product or several factors), your goals and financial aims, location (if significant), and how investors or lenders would benefit.
  • big picture
  • why this business is unique
  • strengths
  • goals
  • financial aims
  • how investor/lender will benefit

The reason this is the most important subgoal is that it may be all an investor reads: if it does not impress the reader, he or she will not read the rest of the document.

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This section enables you to give an overview of your company, what kind of business you are involved in, your industry and so on. It is best broken down into sections:

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This is a statement of who you are, what your business has to offer and what you aim to achieve. For example you could be aiming to be "The best-known tailor in the CBD catering specifically to business people using the highest quality fabrics at competitive prices" and so on.

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This should cover all the important details about your company such as size, set-up and structure. To do this, you need to decide how your company is set-up if it is not already operating. The four main structures are: sole trader, partnership, private company and trust. You should seek specific advice on these structures from your accountant or financial adviser so you understand what best suits your objectives, your type of business, and the advantages and disadvantages or each structure.

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Describe where your business is located, and if this has any special application or impact on the type of company you have – are you specific to an area? Do you work or have clients outside the boundaries of your physical location and so on. Main activities should cover exactly what it is you do and how you do it if you are a service-based business. If you have a product or products or are in a retail set-up, you need to state what the products are, how you sell them and so on. Your facilities should also come into this.

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This is an opportunity to highlight the strengths of your business. In writing this section you should ask yourself what makes you stand out from others in your industry? Do you have value-added aspects to your business? What advantages do you have over others? Don’t be afraid to show your enthusiasm for the business when writing about unique features, highlights, products, services and so on.

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The attributes of you and your staff are among the most important keys to your success. Outline the key people who make up the management team – even if it’s just you, or you and a couple of others. You should briefly state relevant recent qualifications or experience of each person. You can attach each person’s resume in your Appendix.

You should then establish your staffing strategy. For most small businesses, this is usually subject to revenue, costs, and cash flow so many people feel they cannot project this. However, you should state your plans for hiring staff, in the event that your company is in a position to do so, 6 or 12 months down the track. Alternatively, you may be in the position of having ample capital for future staff and you need to outline just what roles they would be and how they will benefit the company’s growth.

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Having professional support for your business is very important and in this section you should detail the advisers you have engaged – accountant, solicitor, banker, management consultant and so on.

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If applicable to your business, you should note down the various business relationships you have formed – these include strategic alliances with other companies, suppliers, non-competing partners and such.

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If you’ve been running for a few years or a few months and this is your first business plan, this section can be used to detail the company’s past and present performance. Consult your accountant for help with financial information if you are unable to do this yourself. If you are a start-up, this is not required.

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This section should be used to detail what kinds of products and/or services form the basis of your business. In this top paragraph you may provide a brief summary. The detailed areas can be broken down into the following parts.

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Describe the type of product/s and or services one-by-one. For instance if you are a bookshop which also has a café this should be explained, as well as the types of books you sell, the coffee you serve, the service set- up, the atmosphere.

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Knowing who your competitors are and understanding what they do, can help you understand your strengths and weaknesses. In this paragraph you should outline what competitive advantages your business and its products and services has over its competitors – this can be done in point form.

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Think about opportunities that might or will arise in the future and note them down here as a means of identifying how you are going to take advantage of these for the benefit of your product. For example, if you are a ski-clothing manufacturer it could be that new technology or new fabric will eventually allow you to offer a more superior product to your customers.

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Outline the threats that could hinder your business’s success or progress. You should be realistic about these threats and try to decided what threats are specific to your product, service or industry. For instance, if you are a book shop – large chains in your area would be a threat to your turnover.

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What are the projections for your products and services, what kind of activity are you aiming to achieve, what are you targets for your products and services?

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Provide a brief summary of the manufacturing or production process involved in your products before detailing it in the sections below.

This section may not be applicable to all business plans particularly if you do not manufacture or produce anything in your business. If that is the case, simply do not include this section in your plan.

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Describe the step-by-step process for manufacturing your product.

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Identify what processes and standards you have in place for your product to insure it meets the specifications of the product as well as any additional requirements like safety, durability and other factors which may be placed on you by regulatory or industry bodies.

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Note the various strengths and limitations pertaining to your production or manufacturing process. For instance, in the production of wine everything from the seasons, rainfall, temperature to storage must be considered. Strengths and limitations can also apply to the product itself and what it is made from.

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This should detail any expansion that is planned or forecasted in your manufacturing set-up. You should say why this is so, and how it would be implemented for smooth operations.

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Describe what capacity your manufacturing set-up has – size, volume, staff, equipment and so on.

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Detail the equipment requirements of your manufacturing set-up.

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Detail the material requirements of your manufacturing set-up. For example, if you are a printing press the materials would be paper, ink, cardboard and so on. This can also be rolled into one heading with the Equipment Requirements if you prefer.

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Detail the staff you require, or already employ, to run the manufacturing and production arm of your business. State who they are, what their title and role is, and briefly include relevant experience.

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You need to demonstrate that you have a good grasp of the market for your product and/or services and the key customer needs that it addresses. You also need to show that you have good ideas about sales messages and processes, pricing and distribution options.

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Starting a business requires research into the market you want to penetrate. If you’re already in business, it doesn’t mean you should stop thinking about who and where your market is, especially since markets can and do change over time. Researching this includes finding out whether the product you are manufacturing already exists or should be produced; if it’s a service – is it new? Also ascertain if there is a demand or gap in the market for your product or service; what consumers think about competitors’ products or services and what they think of your products or services.

Once you’ve done your homework, you should summarise the specifications of your market here and move onto the following sections below.

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Detail who your target customers are: their spending habits (what they like spending on, how much they spend), age, gender, where they are likely to live and what trends they are likely to be influenced by.

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You know your market and your target customers, so it’s time to think about what strategy you’ll use to penetrate that market, or the part of the market that you want. For instance, to use the example of a CBD tailor you might want to target the high-earning, opinion-leading business people at the surrounding banks, insurance companies, consultancies and stock exchange. By focussing on them you would be attracting people with disposable income who enjoy fine clothing and appreciate a good suit in the latest European styles. They could then, by- word-of-mouth, become important advocates of your products and refer their colleagues to you.

The strategy for attracting the customer you want should flow from this – what do you attract them with? Quality European fabrics, your experience in up-market fashion, use of styles from brand names which they are likely to be familiar with, competitive pricing and excellent service may apply to the CBD tailor. It may be un-wise for the tailor to create their own styles since business clothing is often bound by fairly conservative ideas – instead they could offer clients the Giorgio Armani- style suit they would otherwise never buy or be able to afford more than one of.

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Detail the trends, growths and set-backs that may affect your market’s ability to engage your products and services. You should use information you’ve gained from your research. For instance if you want to open a computer store, it would be useful to know how many house holds in your area or country have computers, how rapidly this rate has grown, how much is spent on computers, how often they are bought by the same people and what factors make people want to purchase computers.

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Your pricing policy should be formed out of the market’s needs and profile as well as what you want to achieve. A bookshop may want to position itself for impulse buying so the prices should be competitive or even discounted depending on the style and location of bookshop. On the other hand, you may be a bookshop close to a large University which prides itself on carrying all the latest overseas texts and has a price tags to go with it because professors and students need the books and can't get them elsewhere.

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Take note of your main competitors. There’s no need to list and detail each and every one however knowing at least 3 to 5 main competitors, what they do or sell, and how they do it is a good way to know how you can make your business unique, or improve in aspects they fall down in. Outlining these competitors in point form is a good idea.

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Advertising and promotion is key to starting a business – you need to get known and build your reputation or brand in order to reach the customers you are targeting. Outline what means of advertising and promotion you’ll be doing. It could be anything from having an opening sale, advertising in local newspapers or specific journals, distributing flyers or brochures, using direct mail techniques, starting a website with all your products on it, using publicity techniques and networking to get written about in newspapers or magazines and so on.

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In this section you should detail your sales strategy and means of distribution. Sales relates closely with your promotion strategy, since making a sale is the end-goal you are trying to achieve. For example, if part of your promotional activities in anew  swim suit store will be to hold regular sales you should outline when they would be held, how you would encourage buying (such as through point-of-sale giveaways), and how your staff will implement the sales strategy. Will they know the products well and be able to advise on fit, fabric, shape and durability so as to help the customer purchase the best product for them. These are the kinds of issues to consider for your sales strategy.

Your means of distribution is closely related to your Sales and you should include that information in this section. Perhaps you have a number of stores, are starting one up, are part of a franchise, or sell your products using catalogues, call centres or the Internet.

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Give an outline of the industry that you will be part of, or are part of. The industry is not the same as your market. The industry means your colleagues, and other companies in the same field. Examples of this would be the wine-making industry, the clothing and footwear industry, the retail sector, the engineering industry and so on.

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Use research to get figures on the size of your industry, concentration, history and other relevant information and detail it in this section. Information of this kind can often be found by going to industry bodies and the Australian Bureau of Statistics. See our Small Biz Links section for online listings of industry and government bodies.

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Note the trends which affect your industry as a whole. For instance, falling mortgage rates would help boost your real estate business because it’s more affordable to buy one’s own home.

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If there are any industry or market factors that may impact on the cost of the goods or services you are selling – price sensitivity – note this here. For instance, prices for the prestige imported car market may fluctuate in accordance with US dollar rates, manufacturing conditions overseas and so on.

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If you are a start-up company not all the parts of this section will apply to you. However where possible you should provide as much relevant information as you can.

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Normally this would mean the current financial position of your business or company and by working with your accountant you should be able to provide a snap-shot of where your company is placed financially – in profit or loss, growing or shrinking and so on.

If you haven’t started your business but are looking to raise capital, you can detail the nature of any capital you have personally invested into starting the company so far. If neither of these situations is applicable, you may want to rename this part Financial Plan and detail it accordingly.

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With your accountant’s advice, you need to provide projections of what the business’s income or revenue levels will be and what your expenditure or overheads will be over the coming 1, 2 or 3 financial years.

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Revenue or turnover doesn’t necessarily mean profit and many businesses operate "in the red", with bank loans or overdrafts, for the first few years. To reach your goals you need to project your levels of profit and loss over the coming year or more, even if these projections change from each year. Consult your accountant or financial adviser for help and detail the information here in figures or graphs or both.

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For those of you who have never seen a balance sheet – don’t be put off, you’re not alone. Many people starting a business have never had experience of this kind.

A balance sheet details all your costs, cash, inventory spend, short and long term assets, capital assets, liabilities and earnings. Once again valuable professional advice is important for obtaining this information – your financial adviser or accountant is best placed to go through this information with you and provide you with the balance sheet when complete.

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You may try to forecast what your cash flow situation will be in 6, 12 or 18 months time in this section. Having done a balance sheet for your business, your adviser will be able to help you with this. The forecast is based on predictions you will be making on the success of your business and the sale of your products and services.

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Detailing your "breakeven analysis" means providing information showing how long it will take to secure revenue which enables your company to break even. In the case of a new business, your breakeven analysis is more of a projection with which to monitor your monthly and yearly sales and revenue streams. Using graphs to demonstrate this may be useful and your accountant or financial adviser should be able to help.
Briefly, here is a description of each structure:
  • Sole trader: This literally means you run your business alone and you do not share control or profits with anyone. In effect, the business is you – and that means you are personally liable for debts and other obligations.
  • Partnership: A partnership means anywhere between 2 and 20 people are in a business relationship with the aim of making profits. The experience, assets and capital are pooled toward this goal so that you share the profits, risks and responsibilities. Like with sole traders, partners are personally responsible for the business’s debts.
  • Private Company: More complicated than the other business structures but it is the only structure recognised as a separate entity, by the law, from the individuals (shareholders) who own it. In Australia under current Corporations Law, an incorporated business must have at least one director.
  • Trust: These structures hold property in trust for the beneficiaries – normally family members – and trusts are not legal entities. Operating a business through a trust requires a trustee who monitors and administers the trust according to the deed (or rules of the trust).

If you're starting up, consult your accountant, solicitor and/or business adviser for more detailed information on these structures and what structure would most benefit you.

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Supporting Documents

Don't leave the polish off your business plan! Supporting documents can help your plan look considerably more professional, well thought out and credible.

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Any articles, press releases, or publicity material that you or your company have been featured in, should be attached here.

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Attach resumes of all key staff members.
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Information on patents or trademarks obtained for your products or services should be included here.

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