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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.
MAUS Business Systems
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Business Planning on MAUS Dashboard The Simple Business Plan
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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?
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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
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Financial Strategy highlights:
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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?
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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
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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
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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
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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
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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
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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
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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
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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
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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.