A business plan is a document that summarises the following points about your business:

• Where it has come from
• Where it is now
• Where it is going in the future
• How it intends to get there
• How much money it needs to fulfil its plans
• What makes it likely to succeed
• What threats or disadvantages must be overcome on the way.

This document can range in length from a few typed sheets of paper to several hundred pages. However, since professional readers of business plans - bankers, venture capitalists and enterprise officers - are offered more business plans than they can intelligently digest, the more concise your business plan, the more likely it is to be read.

The key elements of a business plan document are:

• Text - the narrative sections that make up the bulk of the plan
• Evidence - supporting evidence for all the assumptions and assertions contained within the plan - some of this is included in the Appendices, the rest is held available in case of query
• Numbers - the financial projections and some of the Appendices.

The text consists of a number of sections designed to introduce the reader to the business, recognising that they are busy, and making clear the funding need of the business (if that's the purpose of the plan).

Supporting evidence is often overlooked in the preparation of a business plan - only to be discovered when its absence is critical. Gathering supporting evidence during the process of business planning is recommended.

The numbers usually comprise the financial projections:

• Projected profit and loss account
• Projected balance sheet
• Projected cash-flow statement
• Other relevant supporting information.

The quality of the planning you do for your business is critical to its success; how you document that planning process is less so. Nonetheless, a good business plan actively aids the planning process by providing a structure. It forces you:

• To cover ground that you might otherwise, in your enthusiasm, skip over
• To clarify your thinking - it is almost impossible to get your plan onto paper until you have formulated it clearly
• To justify your arguments, since they will be written down for all to see
• To focus on the risks and potential for loss in your plans as well as on the potential for profit and success.

Structure

Your business plan must have a structure that is easily followed and understood by the person reading it. Although readers of business plans all look for different things in a plan, there is sufficient overlap to be able to suggest a standard format below. Adapt this structure to your own needs.

• Executive Summary - 2-3-page summary describing the business, the product, the opportunity and the company's financial needs
• The Management Team - Experience, skills, gaps
• The Products and Services - what they are, unique selling points
• The Competitive Marketplace - who are the competitors and potential disruptors
• Marketing Strategy - how do you intend to get your brand known and your product into the target markets
• Design and Development Plan ? R and D effort and schedule to prepare the necessary products services
• The Operations Processes - staffing, procurement, manufacturing, distribution, customer service, infrastructure
• The Financials - financial needs, current and projected profit and loss accounts and balance sheets, projected cash-flow statements
• Appendices - containing other information that may be of interest to the investors.

Executive Summary

This is the first part of a Business Plan to be read - and the last to be written. Here, in less than a page, you summarise the key points of your plan. It's easiest if you can put them in bullet point, like this:

This Business Plan:

• Explains how XYZ Company came to be
• Describes the products you intend to make
• Describes the market
• Shows how you will reach that market
• Cost the products
• Includes profit and loss account, balance sheet and cash-flow projections
• Requests grant aid of €k, based on equity already committed of €k and loans agreed of €k.

This is the most important part of the business plan, since it's usually on this that a decision is taken to read further. Most business plans are rejected before the Executive Summary has been fully read.

Reviewing a Business Plan

Your business plan encapsulates your thinking and planning for growth. However, before you sign off on it, you should review it carefully.

Financial Review

Start with a financially-directed review, to mimic the type of review that a banker or investor will carry out when considering the plan for lending or investment.

The techniques used to carry out a financial review of an almost-completed business plan include:

• Profit and cash-flow review
• Break even analysis
• Ratio analysis
• Sensitivity analysis
• Quantification of risk.

Text review

You should also look to the text of your business plan, to consider whether it fairly reflects your efforts at planning the development of the business.

You should aim to be able to answer the following questions quickly and easily from the business plan document - the questions reflect a reader's immediate concerns about the viability of the growth strategy and go to the heart of the business model. The questions are:

• Who are you?
• What is your (new) product or service?
• Who are your customers?
• Why will your (new) customers buy your product or service?
• What price will your customers be willing to pay for your product or service?
• At this price, how many products services will your customers buy?
• How many products services can you make?
• How much does it cost to make deliver each unit of product service?
• How much investment does the business need to achieve its growth strategy?
• Is this a viable business?

A Live Document

The business plan reflects all the changes in thought direction since you started the process of business planning.

What appears in the business plan document is the end result of the process - the proof that you and your team have planned a solid and achievable growth strategy. But it's not the final plan.

A business plan must reflect the business. As it changes direction so too must the business plan. The two are inextricably linked. Growth is not just a once off exercise - it's ongoing.

That's why so much emphasis has been laid on the process of business planning, because a process is on-going. Business planning never ends. It's always happening and the business plan document needs to be reviewed and updated regularly as a routine part of the management of the business.

There is no finish line.