Business Plan Guidelines

Contributed by:

Jonathan James Fri, Jan 07, 2022 08:55 PM UTC

This document is intended to be used as a guideline to create your business plan. It identifies and explains the questions that should be addressed and outlines the sections to include. The business plan should begin with a title page that includes your name as well as the name of the proposed business.

1. BUSINESS PLAN GUIDELINE
This document is intended to be used as a guideline to create your business plan.
It identifies and explains the questions that should be addressed and outlines the
sections to include. The business plan should begin with a title page that includes
your name as well as the name of the proposed business.

2. TABLE OF CONTENTS
Executive Summary ...................................................................................................... 1
Company Profile ............................................................................................................ 2
Business Overview – Products/service offered............................................................. 2
Company History .......................................................................................................... 2
Vision and Mission ....................................................................................................... 2
Management ................................................................................................................ 2
Legal Structure ............................................................................................................. 2
Location ....................................................................................................................... 2
Goals & Objectives ....................................................................................................... 2
Market Research ............................................................................................................ 3
Industry Profile and Outlook ......................................................................................... 3
Local Market ................................................................................................................ 3
SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) ........................ 3
Target Market ............................................................................................................... 3
Marketing ....................................................................................................................... 5
Pricing Strategy ............................................................................................................ 5
Marketing Strategy ....................................................................................................... 5
Marketing Objectives .................................................................................................... 6
Operations ..................................................................................................................... 7
Resource Management ................................................................................................ 7
Location ........................................................................................................................ 7
Initial Capital Expenditures............................................................................................ 7
Legal ............................................................................................................................. 7
Human Resources ........................................................................................................ 7
Process/ production ...................................................................................................... 7
Finance ........................................................................................................................... 8
Start-Up Costs/Financing ............................................................................................. 8
Sales Forecast ............................................................................................................. 8
Cash Flow .................................................................................................................... 9
Milestones .................................................................................................................... 10
Appendices .................................................................................................................. 10

3. EXECUTIVE SUMMARY
This is written last but placed first in the business plan. The Executive Summary should be no longer than
1 ½ pages. We recommend five paragraphs – each paragraph summarizes one of the sections below:
 Company profile: What product(s) or service(s) do you offer and what is their value (or what
differentiates you)? Who are the owners and what expertise do they bring to the business
(briefly)?
 Market research: What are the key findings about your industry and competitors? Who is your
target audience?
 Marketing: How will you acquire clients and what strategy makes the most sense?
 Operations: What resources do you need to get off the ground?
 Finance: How much money do you need to start? How will it be used? What are your first year
sales and expense expectations?

4. COMPANY PROFILE
In this section you describe your offering - the strengths of your product or service. You include how your
company is set up, who the owners of the company are and what they bring to the table.
Business Overview – Products/service offered
Provide a full description of your product/service and its value. Why will people buy your product or
service? What is the key benefit – your Unique Selling Point? It is best to focus on a single key benefit, as
opposed to having many. Examples include: saves time; better quality; easier to use; convenient;
minimizes risk; reduces pain; highly credible; socially responsible; increases enjoyment; low cost.
Company History
How did this idea first come about? Outline your progress to date – research and development, any sales
to date, etc. Who are your current customers? What is the current status of your operation?
Vision and Mission
Vision is about the end result – your ideal position. How do you envision the company 5-10 years from
now? How will your company be known? For example a vision statement for a tutoring company could be:
To be the benchmark for quality tutoring in the greater Ottawa area.
The mission describes the fundamental purpose of your business. The mission focuses on the present,
while your vision describes the future. Think of your mission as your guiding principle in dealing with your
customers. For example: Making tutoring fun and interesting for students. This entrepreneur knows that,
day-to-day, it is her mandate to ensure students are actually engaged in their own learning.
Outline the key personnel in the company and any relevant experience/training they have that relates to
the business. This shouldn’t be written like a resume but in paragraph form. You may include: relevant
work experience; education and training; industry contacts; life experience; projects worked on; passions;
skills; achievements; awards; volunteer work.
Legal Structure
What is the business structure: sole proprietorship, partnership or incorporated? State any rationale for
the structure. If there is a partnership or corporation, please state the ownership breakdown, shares
issued etc.
Where will you be located? Provide an address. Provide a rationale for the location. Discuss the rent,
traffic and parking. What businesses are situated around you? For leased premises, most lenders will
require either a letter of intent or a copy of the lease from the landlord.
Goals & Objectives
Goals and objectives must be SMART: Specific, Measurable, Attainable, Realistic and Timely. You can
also include milestones you want to achieve such as introduce a second product, or purchase new
equipment. Include any new major initiatives you have planned for the 2- 5 year timeframe including
hiring new employees or expanding to a larger location.
The goal Conduct extensive networking isn't very specific or measurable. But by reworking it to Attend at
least 4 networking events each month you'll know exactly what targets you have set for yourself. Other
SMART goals and objectives are: Increase annual sales by 10%. Secure 20 new clients by December.
Launch the website by year-end.

5. MARKET RESEARCH
In this section you take a closer look at how your industry works, who are the competitors and who are
your best customers.
Industry Profile and Outlook
What business are you in? How does the industry work? Who are your key competitors? How is the
industry evolving? What are the predictions for the future? Are they valid and how does this affect your
Local Market
What is the market you will serve initially? For example, if you are opening a store, your immediate
market is likely within a certain kilometer radius from the location because customers are only willing to
travel a certain distance. What is the geographic scope? How many customers are in that area?
Businesses that sell online may also need to target a key geographic area to start. In the SWOT analysis
in the next page, make sure you compare all relevant companies in your location.
SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)
The SWOT analysis forces you to evaluate your competition so that you have a better understanding of
where you should position your offerings.
Strengths: What strengths does this company have from a customer’s point of view?
Weaknesses: What weaknesses do you observe? Avoid subjective statements such as “they
don’t care about their customers”. Be specific i.e. “customer wait time exceeds15 minutes”.
Opportunities: What gaps can you identify in the offerings of the competition? For example, if
your competitor doesn’t offer same day service, you might consider offering same day service. In
the example below, Zebra Tutoring identified a gap: making learning exciting for students, by
exploring the competition.
Threats: What might the competition do to make it difficult for your business? What might happen
in the industry (i.e. new legislation etc.)?
We recommend you assemble your SWOT analysis in chart form, including your own business and
several (5-6) competitors. See sample SWOT analysis below for Zebra Tutoring (with one competitor
Competitor Strengths Weaknesses Opportunities Threats
TOP Tutors Good reputation $145 diagnostic test No fee diagnostics May decide waive
Well established required diagnostic fee
Online presence $390 for 8 sessions Offer online
tutoring
Zebra Tutoring Familiar with local Will need to rent Make learning High schools may
community space exciting for begin to offer in-
students school tutoring
Target Market
Describe your intended customers. Identifying a target market will help you develop a much more
effective marketing strategy. In most cases, you should not plan to sell to just anyone and everyone. The
aim is to find your best customers and to clearly describe them by their common traits, For your best
customer, ideally you should list 8 -12 common traits such as:
• Demographics: Age; gender; income; education; nationality; occupation
• Lifestyle/Psychographics: Hobbies/interests, what they value most, leisure activities, what they
like to buy

6. • Behaviour: What will “trigger” your customers to buy your product or service? What common
behaviour patterns do your customers share?
• Scope: Where do your customers live and work? What is the geographic scope you want to
cover?
Here is an example of a target market profile for Zebra Tutoring:
1. Parents with children in high school (demographics)
2. Students planning on attending university (lifestyle)
3. One or both parents holding a degree (demographics)
4. Family income: $80,000+ (demographics)
5. Parents desiring that their children attend university (lifestyle)
6. Students needing help in essay writing (behaviour)One or both parents are concerned about
their community (lifestyle)
7. Both parents and children are computer literate (demographics)
8. Parents feeling overwhelmed with demands placed on their time with increased competition
for university admission (behaviour)
9. Located in Toronto’s Riverdale area (scope)
Determine who your best-paying customer is. This is often the person or group who values your product
or services the most and is willing to pay for it, not necessarily the not necessarily the person that needs
your services. Based on the profile determine the actual size of your target market.
A target market profile can be done for business-to-business clients:
• Industry or specialty
• Size of business (sales, # of employees, budget)
• Organizational culture
• Geographic location
• Decision makers
Here is an example for a target market for Jessie’s Homemade Marmalade, an organic marmalade and
jam wholesaler:
• Small specialty grocery shops with $400,000 - $2M annual sales
• Health Food stores with 3 - 12 employees
• Decision maker: Owner or Purchasing manager
• Greater Winnipeg Area - predominantly in upscale neighborhoods or neighborhoods with a highly
educated population.

7. MARKETING
In this section you determine how you will market to your target group. What is the most effective way to
reach them? Specifically, for each marketing activity how will you reach your target, when, how often, how
much will it cost and what exactly will you do? Marketing is about developing a consistent and detailed
Pricing Strategy
It is important to have a clear understanding of what your competitors are charging. In this section outline
the basic fees or prices of your competition and what you plan to charge. Why? Give a rationale on your
pricing. The pricing strategy needs to be in alignment with your positioning statement. In this section list
your prices.
Marketing Strategy
List the overall direction of your marketing efforts. What are the most effective and methods to reach your
best customers (target market)?
Examine your top 3-5 activities, prioritize them and list details on implementation.
• Primary Marketing Activity (the activity that will be the most effective)
• Secondary Marketing Activity (the activity that will be the next most effective)
• Supporting Marketing Activity (the activity that will be the next most effective).
For each key marketing activity answer these questions: How and where will this take place? How much
will it cost and when will it be spent? What support materials will you will need? What is the follow-
up/measurement system? When will you do this and how often?
Below is a sample marketing strategy for Zebra Tutoring. The Primary, Secondary and Supporting
Marketing Activities are broken out.
Example: Marketing Strategy for Zebra Turtoring
Face-to-face relationship building is critical to the success of the business. Marketing strategy will
focus primarily on networking activities where parents of high school youth are likely to be in
attendance (see Primary Marketing Activities detail). Zebra Tutoring’s key strategy is to be an
active member in the community (Riverdale area) and to be seen as an expert on engaging
students with their own learning. A secondary strategy will be placing posters, with tear offs, in
coffee shops, grocery stores and community centres in the area, a common practice for new
tutoring businesses (see Secondary Marketing Activities Detail). In social media, Zebra Tutoring
will initially focus on LinkedIn (since the target group are mainly professionals and executives)
which is an effective way to reinforce connections made at a networking event.
Primary Marketing Activity
Zebra Tutoring’s key marketing activity will be networking in the community (primarily Toronto’s
Riverdale community) including professional and informal networking groups and through larger
community sponsored events such as the Sick Children’s Relief Fund. Representatives will be
professionally dressed yet casual at all times.
Networking events will include the Riverdale Share Community Association, Danforth Business
Improvement Area, and Concerned Parents Association. The support materials on hand will be
business cards and bookmarks. 1,000 book marks will be ordered for a cost of $500. The idea is
to be engaged with other parents but not do a “hard sell”. If parents are interested they would be
emailed an article titled “Engaging Students Today”. This would be followed up 3-4 days later with
an email or phone call. It is important that Zebra tutoring have an effective contact management
system. The goal will be to network at least twice a week; three times in peak season (fall and
spring). The weekly cost will range from $20 to $100 a week with the average being $60/week.

8. Marketing Objectives
You should have specific, measurable goals for your marketing activities. These goals may be expressed
in terms of monthly, quarterly or annual sales, clients, website hits, events executed, advertising
impressions, readership, circulation etc. Remember, if you have already listed all goals and objectives
under the Company Profile, then you will not need to list them here.

9. OPERATIONS
This section outlines what you need to have in place to fulfill orders and meet customer expectations
once the sale is made.
Resource Management
For physical locations, describe the location, any back-up locations, if appropriate, and the rationale for
your choice(s). Provide the hours of operation. Most lenders will require a copy of the lease or a letter of
intention from the landlord.
If your business is web-based, provide designs or prototypes, along with a rationale for the design and
the key selling features of the website.
Initial Capital Expenditures
Opening inventory: For retail or wholesale businesses, list the amount of initial inventory you will need
and the general margins/mark-ups of your product or service.
Major equipment purchases: What major equipment have you acquired/do you need to acquire and why
is it important for your business?
Discuss any legal issues here such as licenses required, regulatory issues, contracts that have to be
drawn up or zoning bylaws. Most lenders will expect you to have standard insurance coverage in
addition to coverage that is specific to your industry.
Human Resources
Discuss your personnel requirements here. Will you need to hire employees, or will you subcontract
work? Assess the cost and implications of your resource requirements. What experience do you require
and how will you conduct training? Consider your deductions for payroll.
Process/ production
How will you fulfill the order once you get it? If you are manufacturing or assembling products, discuss
capacity issues i.e. how many orders can you physically fulfill each day/month? You will need to do a
supplier analysis if your key selling point is your suppliers. What are your lead times from suppliers?
What will happen if you can’t use them? Do you need point of sale equipment?
Risk Assessment
Discuss the potential risks in starting your business. The reader of your business plan needs to be
convinced that you are considering the risks associated with your business, and that you have a plan to
mitigate or minimize those risks wherever possible. Examine the following:
• Marketing - What factors would make it difficult to get customers and what will you do if they
occur?
• Operations – What factors would make it difficult to fulfill orders and what is your back-up plan?
• Finance – What factors would make it difficult to sustain a positive cash flow and what are your
alternatives?

10. FINANCE
In this section you will address your start-up costs, financing, sales forecasts and complete a month-by-
month cash flow for two years. The cash flow helps you to see how and when cash will enter and leave
your business.
Start-Up Costs/Financing
What are the costs associated with starting your business. How much will you contribute and what are
the sources of the remainder? The following spreadsheet will give you an idea of the types of expenses
you may encounter.
Cost of
Item Item Totals
Lease - Leasehold Improvements
First and last month's rent
Building supplies
Labour
Legal fees to review lease
General Start-up Costs
Insurance
Business License
Office Supplies
Office Furniture (desk, filing cabinet)
Computer, printer, fax machine
Marketing
Website
Legal fees to review contracts
Inventory
SUBTOTAL
Cash
Working capital
TOTALS
Sales Forecast
When projecting sales, it is important that you provide a rationale for your projections. Start by making
some general assumptions, such as how much you’ll charge, seasonal variations, major marketing
initiatives. Then you provide a brief explanation of how these result in sales figures, on a month-by-month
basis. This is crucial as it will force you to really think about the kinds of marketing activities you need to
do to generate sales.
Example: Zebra Tutoring Sales Forecast
Key Assumptions
• No sales in the first month - extensive networking to drum up business
• Slowest months: Dec (holiday season) and July/Aug – summer vacations
• Average hourly rate: $40 (increased to $45 by the end of Year One)
• Each student, on average, will attend one tutoring session per week
• Each student, on average, will have 3 months of tutoring
Year One
$0 launch of business –extensive networking (at least 3 x week)

11. Posters placed at 16 key strategic sites
$640 Eager parents who want their son/daughter in tutoring immediately;
4 students x $40 x 4 weeks
Continue with extensive networking (3 x a week)
Attend the local community fundraising event
Sales are a result of marketing activities and are usually subject to seasonal variations. The key is to set
realistic estimates.
Cash Flow
A cash flow is both an overview and a detailed analysis of your business. It tells the story of what enters
your bank account (through investment, loans and sales) and what leaves your bank account (in the form
of expenses) on a month-by-month basis. Your cash flow statement should never show a negative
number at the end of the month – a deficit must always be covered – by a line of credit, overdraft or other
sources of cash.

12. MILESTONES
Milestones are scheduled events that indicate the completion of a project or specific deliverable. A
Milestone Summary may include some or all of the following key dates and deliverables:
- Completion of marketing research or customer development phase (only acceptable in the first
month)
- Business registered (only acceptable in the first month)
- Prototype made
- Launch of marketing/sales program, e.g., website launch, brochure printed, prospect lists
compiled, social media campaign launch
- Marketing milestone reached, e.g., 1,000 "likes" on Facebook or 500 direct mail letters sent,
participation in a local art market
- Production target met, e.g., 500 units manufactured
- Key partnership or vendor contract signed
- First sale
- Revenue target met
- Employee hired part-time
- Employee hired full-time
- Space rented or lease signed
- Additional funding secured
Note: The Milestone Summary for participants of the Starter Company program must include 6
milestones, one for each month of program participation.
APPENDICES
If there is supporting documentation that doesn't fit in any of the above categories, such as lease
agreements, insurance, licenses, detailed survey results, shareholder agreements, articles of
incorporation etc., create an Appendix section. The Appendix section should go at the end of your
Business Plan.

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