The Simple Business Plan Template - MAUS · Business Planning on MAUS Dashboard The Simple Business...

Business Planning on MAUS Dashboard The Simple Business Plan

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The Simple Business Plan Template

The following questions represent the major areas that are generally covered in a business plan. Answer the questions in the order that they are presented and you will finish up with a well formatted business plan. If you want to include more detail, see the detailed templates included in Part 3 of this manual.

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BUSINESS PROFILE

What business are you in?

Provide a general outline of your business, sufficient for outsiders to fully understand what your business is

all about. Which industry is it in? What is the major benefit, rather than product or service that you provide

to your customers?

What are the unique features of your business's products or services?

Discuss product or service advantages that give you an edge in the market. Is your product or service

substantially better than your competitors? Does it offer the best, the fastest, the most powerful, the cleanest

or the most efficient solution?



What were your sales last year and over the last few years? How well have you performed? If

you have not performed to budget, indicate why not.

This provides a background to your sales situation and a lead-in to the future of the business. For instance,

you may include something like "Although our sales have increased by ten percent a year over the last three

years we have never really taken advantage of the opportunities available. This plan is being prepared to

enable us to do so in the future."

What are your projected sales and profits for the next three years?

This is the bottom line. How much profit are you going to make?

Year

before

last

Last Year Year 1 Year 2 Year 3

Sales

Gross Profit

Net Profit

A graph inserted here, illustrating your sales growth, would look impressive.



What proof can you provide that you will achieve this level of sales and profit?

Back up your forecasts with some form of evidence that there will be continuing demand for your goods or

services. Do you have any advance orders, existing customers that have promised to use your goods or

services, market research surveys or sales experience in this industry that implies a natural growth in the

market. Do you have evidence of any external factors such as changes in legislation, competitor status or

cultural influencers that will lead to a demand for your products or services?

Add anything that reinforces the proposition that you will be successful. For instance, mention any large

orders you have received in the past or perhaps profile some of your existing customers. List anything which

may add credibility to your business.



MARKET & COMPETITIVE PROFILE

How big is the total market? Is the market growing or declining?

Explain who will buy your products or services. Is this a good, strong, growing market or is it declining? If

it is declining you should consider diversifying into other markets.

Sometimes the figures on total market size are irrelevant, especially when a business is only a small fish in a

very big pond. For instance, a Plumber who has just set up shop will probably get no help from knowing the

size of the total Plumbing market. However, if he is a one-man plumbing business in a particular suburb and

specialising in a particular area, it would be worthwhile him knowing how big the market is in this area,

how many competitors there are and how many specialise in the same services as he does.

If you are trying to find out how big the market is, try contacting the association that covers your product or

service. Or contact the government information service to enquire about their published statistical

information. If you are launching a new product which will be retailed, you could contact a number of the

larger retailers and ask them how many of these types of products they would sell.

You need to establish the most reliable source of information for your product or service.



Can the total market be broken down into smaller sub-markets or market segments?

Try to break down the total market into smaller segments. This will help you develop your plans and

competitively position your products and services. Examples of segmentation, which show you exactly how

to do this are included elsewhere in this manual in the section Examples of Segmentation.

A quick example: If you are selling computers you might segment your market into large businesses, small

businesses, the home buyer, government bodies and students. When you break down your market into

smaller segments such as this it is easier for you to decide how to sell your goods or services to each

segment. For example, you may need to sell your computers at a low price to students and to sell them

through the university magazine. However, to government bodies price would be less of a consideration than

reliability. You may also need to employ a sales rep to sell effectively to government bodies.



Are there any market trends that will affect your business?

It is very important to know and recognise the trends and the external factors that could affect the market, so

you can assess whether or not your business will be viable in the long term. Are there any cultural,

legislative, social, environmental, technological or other influencers that may affect your business? For

example, technological influencers have made typewriters, telexes and buggies almost obsolete.

Environmental and social issues have seriously affected the plastics industry by forcing companies who were

using plastic-based packaging to find alternatives. There are trends in the market for following a healthier

low-fat lifestyle. The hat market will increase in coming years because of awareness of the deteriorating

ozone level. Look at your products, services and markets and assess whether there are any potential threats

or opportunities that could affect your planning.



Environmental Issues

Consumers are becoming so conscious of environmental issues that we should consider how our business

affects the environment and how we can use this to improve our market share. What is our carbon

footprint? Can we reduce this? What can we do from an internal production or operational perspective?

What else can we do to add to our competitive analysis?

What internal operational steps can the company

take to lessen the impact on the environment?

For example in terms of the office: recycle paper

and toner cartridges, switch lights and computers

off, increase recycling opportunities and install

water saving devices in bathrooms. In terms of

production can you use a different supplier with

more environmental friendly products? Can you

manufacture in a different way or remove your

waste in a different way?

Is there anything we do in our processes or

operations that is superior to our competitors?

What can we say about our “green” initiatives that

will help us to distinguish our products from our

competitors?

Examples may be organic foods, products that are

bio-degradable etc. You might also consider if your

products do not necessarily benefit from being

“environmentally friendly” or fit into this category,

then just listing your green initiative on your

website and in your corporate literature may help

you to build goodwill.



How do you compare to your competitors?

The labels on the left hand side of the box below are examples only. Change them to suit your company.

Your Company Competitor Competitor

Price Strategy

Retail price

Payment terms

Product Strategy

Quality

Ease of use

Reliability

Product life

Country of origin

Promotion

No of reps

Advertising appeal

Website Search Engine Optimisation (SEO)

Pay Per Click (PPC)

Distribution

Exclusive

Direct marketing



STRATEGIC DIRECTION

Target market (who will buy your products/services?).

Based on the market trends, profiles of your business and your competitors, who exactly will you sell your

products and services to? What market represents the best chance of success? Where are the opportunities?

How will you position your business's products or services against your competitors? Is there

a gap in the market?

Why will people buy your goods or services? Are you offering the same as everyone else is or something that

is substantially different and that fills a need in the market? There could be a gap in the market. I.e. No

competitors that sell similar goods or services at a price that you are prepared to sell at or no-one else that

has a particular feature or distributes their product in the same manner as you do. In a previous question

you looked at the features of your products and services - in this section you should look at the benefits to

the customers of these features and whether your competitors can provide the same benefits.

This is an explanation of why you will win! Discuss any major product or service advantages that give you

an edge in the market place. For instance, all watches tell the time but each manufacturer positions its

products differently. People buy Swatch watches because they are fashionable and Rolex watches because of

their image. Isolate the unique feature of your products or services - this is called your competitive

advantage.

A service business would do the same. For instance, a gardener's competitive advantage might be to offer

fixed price services. This gives the customer security of price - they know exactly what the service will cost

from the start. The gardener could also offer garbage removal, lawn mowing and pool cleaning. The benefit

to the customer is ease of purchase. They can order all these services with one phone call, pay with one

cheque and have a familiar face doing all the work.



What are the major things that you will need to achieve in order to meet these financial

returns?

This is a brief outline of all the things to come. E.g. "We will increase our advertising expenditure, invest in

a new machine, improve our distribution by appointing a freight agency and better target our product to the

consumer based on the results of our market research campaign". If you are applying for funding for capital

expenditure highlight what the funds will be used for.

Marketing Strategy highlights:

Product Positioning

General Marketing Strategy

Production Strategy or Retail Strategy highlights:

(Depending on the type of business you are in)

Organisation and Management Strategy highlights:

Number of new employees

Training

Systems and Reporting



Financial Strategy highlights:



OBJECTIVES AND STRATEGIES

The forms on the following pages cover the major areas of your business which you need to plan for. Use them

to list all the things that you are going to do over the next year, or years, to improve the performance of your

business and to achieve your projected sales and profit figures. Below is an example of how the forms should

look when filled in. The "Who" heading refers to who is responsible for making sure that the tasks or strategies

are achieved. The "When" column refers to when the task or strategy is to be completed.

Strategy (Action Objectives) Who When To employ a new secretary for sales. PH Mar

To produce an internal newsletter for staff. JB April

Example of Exit and Shareholder Strategies To sell the business in two years for a defined amount of money.

To build the value in the business by improving profitability.

To impress potential shareholders by implementing systems and procedures.

To develop an employee succession plan.

Investor or Shareholder Strategy highlights:

If you are the business owner, are you planning on exiting (selling) the business? If so, over what timeframe

and for how much money? Are you looking for a capital injection or simply interested in increasing

shareholder value? If presenting to outside investors or a bank, how much do you wish to borrow and what

will be the return on investment? What, specifically, do you need financing for?



Example of Marketing Strategies Promotional: develop promotions by product, by region, by segment or type of customer, develop a

print advertising campaign, develop a lead generation program, contact "centres of influence", issue a

PR release, develop a new sales approach, contact lost customers and past enquirers, sell new products

to existing customers, develop an up-sell promotion, develop a sales promotion.

Web Promotional: to attract how many leads per month, to create an image, to provide information, to

distribute material, to improve web based profile.

Product: improve the quality, launch a new model or product, develop a returns policy, lengthen the

warranty period, conduct R&D in the area of xxxxxx, develop a brand name, provide add-on

accessories to xxxxx, change the type of package, group like products into package purchases.

Pricing: alter the pricing structure, offer discounts and bulk rates, develop distributor, agent and retailer

pricing levels.

Distribution: appoint new distributors, sub-distributors or agents, develop material for distributors, sell

direct.

Example of Financial Strategies Eliminate cash-flow shortages, improve the collection of money from debtors, stretch out payments to

creditors, reduce expenses, rationalise leases, apply for a $50,000 overdraft, reduce wage payments,

purchase new equipment, reduce inventory levels, look at lower cost rent alternatives.

Example of Organisational & Management Strategies Improve morale, conduct a sales training course, chart the organisation, and develop policies and

procedures.

Example of Production Strategies Purchase new machinery, schedule two months for installation and trials of new machinery, commence

production in October on new machinery, spend $50,000 on R&D, lower WIP inventory levels to five

percent of production, develop production policies and procedures, reduce reject rate, develop better

production scheduling techniques in association with the marketing department's sales forecasts, find

alternate suppliers for XXX raw material, maintain production at an average ninety percent of capacity.

Example of Retailer Strategies Rotate stock on a daily basis, reduce stock damage/pilferage, purchase a better cash register, improve

customer service through training, and improve presentation of stock.

Example of Environmental objectives To reduce our electricity consumption by 10%.

To reduce hazardous waste from production by 10%.

Become carbon neutral by 201X

Example of Charitable Objective To provide $5,000 to charities in 200X



EXIT OR SHAREHOLDER INVESTOR PLAN

20 to 20

Objective

Define what you intend to do with the

business in terms of ownership, investors or

succession. i.e. “We intend to sell the

business in 5 years.” (Detailed strategies are

included in the “Sell Your Business” book

and software published by MAUS.

# 1

# 2

# 3

# 4

STRATEGIES

Milestones, tasks or action objectives Who When E.g. To collect a list of all trademarks, patents and domain names so the business

appears well organised.

SK Last day



MARKETING PLAN

20 to 20

Total Sales Objective

Sales objectives by product, market segment

or any other variable that you care to use to

measure your performance

# 1

# 2

# 3

# 4

MARKETING STRATEGIES

Milestones, tasks or action objectives Who When E.g. To contact thirty lost customers every month.

SK Last day



FINANCIAL PLAN

20 to 20 Budget Sales

Budget Net Profit

Budget Gross Profit

Budget Expenses

FINANCIAL STRATEGIES

Milestones, tasks or action objectives Who When

E.g. Apply for a $50,000 overdraft. PH 1/6



ORGANISATIONAL AND MANAGEMENT PLAN

20 to 20 Number of staff to be hired

Payroll Budget

Training & Human Resource Budget

ORGANISATIONAL & MANAGEMENT STRATEGIES

Milestones, tasks or action objectives Who When E.g. Institute weekly sales training.

CC 23/6



PRODUCTION PLAN

20 to 20 Production Forecast

Plant Capacity

Production Costs

PRODUCTION STRATEGIES

Milestones, tasks or action objectives

Who When

E.g. Reduce reject rate by two per cent a month for three months.

CL 28/9



CASH FLOW STATEMENT

Detailed descriptions of these statements are included in this manual. The Cash Flow statement is an extremely

important document which needs to be prepared on a monthly basis. A Cash Flow statement shows how much

cash the business will have on hand. It only takes into account when bills are actually paid and when monies

are actually received. For instance, suppose that $100,000 worth of goods is sold this month. Although this is

registered as a sale this month, the money will not be physically received until next month or even later.

Therefore it won't appear in the Cash Flow statement until the month it is physically received.

The same applies to expenses. An advertisement in the Yellow pages, costing $4,000 for the whole year, will

only appear in the Cash Flow statement when it is physically paid for.

It doesn't matter how healthy the order book looks, if bills can't be paid the business will fail.

Budget Actual Variance

OPENING BALANCE

Cash Inflow

Cash Sales

Cash from Debtors

Interest Revenue

Other

Total Available

Cash Outflow

Wages

Rent

Credit

Accounting Fees

Selling and Admin Expenses

Office Expenses

Purchases of Assets

Loan Repayments

Directors' Drawings

Total Outflow

CLOSING BALANCE



INCOME STATEMENT

Income statements (also referred to as profit & loss statements) are important as they tell you whether or not

you are making a profit. Businesses should prepare these statements on a monthly basis. Often, to simplify

these reports, rather than trying to record the complex inventory movements, many businesses prepare their

operational budgets by averaging out a cost of sales figure.

Budget Actual Variance

Sales

Less Cost of Goods Sold

Opening Inventory

Purchases

Duty on Purchases

Less Closing Inventory

Gross Margin

Add Miscellaneous Operating Revenue

Commission Revenue

Discount Revenue

Less Selling and Distribution Expenses

Advertising

Commission Expense

Delivery Expenses

Salaries - Sales

Vehicles

Depreciation on Showroom

Equipment

Administration & Management Expenses

Audit Fee

Directors' Fees

Office Expenses

Salaries - Office

Telephone

Depreciation on Buildings - Office

Financial Expenses

Bad Debts

Doubtful Debts

Discount Expense

Interest on Debentures

Net Operating Profit

Add Non-operating Revenue

Profit on Sale of Surplus Equipment

Net Profit before Tax



Less Provision for Income Tax

Net Profit after Tax

OTHER INFORMATION

Any other information that supports your plan should be included. The Appendices can be used to include such

things as brochures, customer satisfaction letters, PR releases, etc.

MONTHLY EVALUATION

Two key elements of successful business planning are the allocation of tasks to individuals and the

accountability of those individuals. A business plan does not produce results because it has been written down -

results are produced when employees are given targets and performance goals for which they are accountable.

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