A business plan is a written document describing the nature of the business, the sales and marketing strategy, and the financial background. When prepared for an external audience (funders, investors), it details the past, present and forecasted performance of the organization. It usually also contains pro-forma balance sheet, income statement and cash flow statements to illustrate how the financing being sought will affect the firm's overall financial position. (Paraphrased from Entrepreneur.com)
A business plan is typically written for a venture, product or service; however, there are stages in an organization's lifecycle when a business plan is critical, such as the start-up phase. Because the business plan is a detailed account of how the organization will operate, it becomes a key document for funders, donors or when seeking major contributions. A business plan does not mean you will definitely undertake the venture. It is a way to help the organization to make that decision.
Business plans are decision-making tools. The content and the goals of the plan are determined by the audience. Below are some of the components that you should consider as part of your plan.
|Current organizational structure||Include the stage of organizational maturity of the organizatin, objectives, expansion plans and sector trends.|
|Program offering||Its connection to your core business|
|Include characteristics, trends, share potential, sales/distribution channels, etc.|
|Perceived competition||Include specific organization names, geographic areas served, overlap in programs|
|Size, scope and characteristics of the target customer base|
|Management and organizational structure||Key management employees and their expertise. (For-profit investors often consider the management team the most important factor when deciding to invest in a company.)|
|Price points||What are people willing to pay for your product or service? (This is part of the marketing plan or any marketing research you’ve conducted.)|
|Financial plan||Current and projected financial status including an income statement, balance sheet, cash flow statement and three year financial projections|
|Who will pay?||The people who will be paying for the service/product you offer (remember, in the human services sector, it’s highly unlikely that the client is the payer)|