Business plan

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This is a summary article that covers many topics = related to=20 business plans - their content, how they are used, legal issues, and = spoofs of=20 business plans, among others. - please see individual sections for links = to=20 detailed discussions of various topics relating to business plans.

Corporate=20 finance=20

Working = capital management

Cash = conversion=20 cycle
Return on=20 capital
Economic = value=20 added
Just = In=20 Time
Economic = order=20 quantity
Discounts = and=20 allowances
Factoring=20 (finance)

Capital=20 budgeting

Capital=20 investment decisions
The=20 investment decision
The=20 financing decision

Sections

Managerial=20 finance
Financial=20 accounting
Management=20 accounting
Mergers = and=20 acquisitions
Balance sheet=20 analysis
Business = plan
Corporate=20 action

Finance = series

Financial=20 market
Finan= cial=20 market participants
Corporate=20 finance
Personal=20 finance
Public=20 finance
Banks and = Banking
Financial=20 regulation

This=20 box: view =E2=80=A2 talk =E2=80=A2 edit

A business plan is a formal statement of a set of business = goals, the=20 reasons why they are believed attainable, and the plan for reaching = those goals.=20 It may also contain background information about the organization or = team=20 attempting to reach those goals.

The business goals being attempted may be for-profit or non-profit.=20 For-profit business plans typically focus on financial goals. Non-profit = and=20 government agency business plans tend to focus on service goals, = although=20 non-profits may also focus on maximizing profit. Business plans may also = target=20 changes in perception and branding by the customer, client, tax-payer, = or larger=20 community. A business plan having changes in perception and branding as = its=20 primary goals is called a marketing = plan.

Business plans may be internally or externally focused. Externally = focused=20 plans target goals that are important to external stakeholder= s,=20 particularly financial stakeholders. They typically have detailed = information=20 about the organization or team attempting to reach the goals. With = for-profit=20 entities, external stakeholders include investors and customers.^{[1]=20
External stake-holders of non-profits include donors and =
the clients=20
of the non-profit's services.^{[2] For=20
government agencies, external stakeholders include tax-payers, =
higher-level=20
government agencies, and international lending bodies such as the IMF, the World=20
Bank, various economic agencies of the UN, and devel=
opment=20
banks.}}

Internally focused business plans target intermediate goals required = to reach=20 the external goals. They may cover the development of a new product, a = new=20 service, a new IT system, a restructuring of finance, the refurbishing = of a=20 factory or a restructuring of the organization. An internal business is = often=20 developed in conjunction with a balanced = scorecard or=20 a list of critical = success=20 factors. This allows success of the plan to be measured using = non-financial=20 measures. Business plans that identify and target internal goals, but = provide=20 only general guidance on how they will be met are called strategic = plans.

Operational = plans=20 describe the goals of an internal organization, working group or = department.[3] Project = plans,=20 sometimes known as project frameworks, describe the goals of a = particular=20 project. They may also address the project's place within the = organization's=20 larger strategic goals.^[4][5]

1 Business Plan=20 Content=20
2 Business=20
- 2.1 Support=20 services=20
- 2.2 Resources = for=20 researching facts and figures=20
  
  2.2.1 Internal corporate=20 records=20
  2.2.2 Free=20 information=20
  2.2.3 Fee-based=20 services
- 2.3 Strategic=20 Analysis=20
- 2.4 Forecasts: = Modeling=20 Techniques
= 3 Presentation=20 Formats=20
4 Revisiting the = Business=20 Plan=20
- 4.1 Cost = overruns and=20 revenue shortfalls
5 Legal and = Liability=20 Issues=20
- 5.1 Disclosure=20 requirements=20
- 5.2 Limitations = on content=20 and audience
<= SPAN=20 class=3Dtocnumber>6 Open Business=20 Plans=20
7 How Business = Plans are=20 Used=20
- 7.1 Venture=20 Capital=20
- 7.2 Public=20 Offerings=20
- <= SPAN=20 class=3Dtocnumber>7.3 Within=20 Corporations=20
  
  7.3.1 Fundraising=20
  7.3.2 Total = Quality=20 Management=20
  7.3.3 Management by=20 Objective=20
  7.3.4 Strategic=20 Planning
- 7.4 Education=20
  
  7.4.1 K-12=20
  7.4.2 Higher=20 Education
8 Satires of = Business=20 Plans=20
9 References=20
10 See = also=20

[edit]=20 Business Plan Content

For more details on this topic, = see Content = of a=20 business plan.

Business plans are decision-making tools. There is no fixed content = for a=20 business plan. Rather the content and format of the business plan is = determined=20 by the goals and audience. A business plan should contain whatever = information=20 is needed to decide whether or not to pursue a goal.

For example, a business plan for a non-profit might discuss the fit = between=20 the business plan and the organization=E2=80=99s mission. Banks are quite concerned = about=20 defaults, so a business plan for a bank loan will build = a=20 convincing case for the organization=E2=80=99s ability to repay the = loan. Venture = capitalists=20 are primarily concerned about initial investment, feasibility, and exit=20 valuation. A business plan for a project requiring equity=20 financing will need to explain why current resources, upcoming = growth=20 opportunities, and s= ustainable=20 competitive advantage will lead to a high exit valuation.

Preparing a business plan draws on a wide range of knowledge from = many=20 different business disciplines: finance, human = resource=20 management, in= tellectual=20 property management, supply = chain=20 management, operations=20 management, and marketing, among = others.[6]. It=20 can be helpful to view the business plan as a collection of sub-plans, = one for=20 each of the main business disciplines.^[7]

[edit]=20 Business

[edit]=20 Support services

books, portals, and other sources of written information=20
consulting services=20
electronic planning templates (software)=20
face to face help: mentoring programs, training courses=20
- Australia: New Enterprise Incentive Scheme (NEIS)=20
- Germany: Bundesministerium f=C3=BCr Wirtschaft und Technologie = (BMWi) [1].=20
- Morocco: CRI (Centre R=C3=A9gional d'Investisment)=20
- Pakistan: SMEDA = (Small and=20 medium enterprise development authority)=20
- UK: Business Link=20
- USA: SCORE, SBA centers, Small Business Development Centers=20
- Canada: Industry Canada, [2]=20
- India : Allindialive Business Planing Portal,[3]=20
- Switzerland : venturelab (F=C3=B6rderprogramm der Bundes = f=C3=BCr innovative=20 Start-ups mit Wachstumspotenzial)=20
- Other countries: needs research

[edit]=20 Resources for researching facts and = figures

[edit]=20 Internal corporate records

[edit]=20 Free information

published statistics on the web=20
business libraries

[edit]=20 Fee-based services

marketing reports from subscription services=20
archive and journal services=20
books

[edit]=20 Strategic Analysis

[edit]=20 Forecasts: Modeling Techniques

[edit]=20 Presentation Formats

The format of a business plan depends on its presentation context. It = is not=20 uncommon for businesses, especially start-ups to have three or four = formats for=20 the same business plan:

an "elevator pitch" - a three minute summary of the business = plan's=20 executive summary. This is often used as a teaser to awaken the = interest of=20 potential funders, customers, or strategic partners.

an oral presentation - a hopefully entertaining slide show and = oral=20 narrative that is meant to trigger discussion and interest potential = investors=20 in reading the written presentation. The content of the presentation = is=20 usually limited to the executive summary and a few key graphs showing=20 financial trends and key decision making benchmarks. If a new product = is being=20 proposed and time permits, a demonstration of the product may also be=20 included.

a written presentation for external stakeholders - a detailed, = well=20 written, and pleasingly formatted plan targeted at external = stakeholders.=20

an internal operational plan - a detailed plan describing planning = details=20 that are needed by management but may not be of interest to external=20 stakeholders. Such plans have a somewhat higher degree of candor and=20 informality than the version targeted at external stakeholders. =

[edit]=20 Revisiting the Business Plan

[edit]=20 Cost overruns and revenue = shortfalls

Cost and revenue estimates are central to any business plan for = deciding the=20 viability of the planned venture. But costs are often underestimated and = revenues overestimated resulting in later cost=20 overruns, revenue = shortfalls,=20 and possibly non-viability. During the dot-com bubble = 1997-2001=20 this was a problem for many technology start-ups. However, the problem = is not=20 limited to technology or the private sector; public works projects also=20 routinely suffer from cost overruns and/or revenue shortfalls. The main = causes=20 of cost overruns and revenue shortfalls are optimism bias = and strateg= ic=20 misrepresentation.^{[8][9] Referen=
ce class=20
forecasting has been developed to reduce the risks of cost overruns =
and=20
revenue shortfalls.}

[edit]=20 Legal and Liability Issues

[edit]=20 Disclosure requirements

An externally targeted business plan should list all legal concerns = and=20 financial liabilities that might negatively affect investors. Depending = on the=20 amount of funds being raised and the audience to whom the plan is = presented,=20 failure to do this may have severe legal consequences.

[edit]=20 Limitations on content and = audience

Non = disclosure=20 agreements (NDAs) with third parties, non-compete=20 agreements, conflicts of=20 interest, privacy concerns, and = the=20 protection of one's trade secrets = may severely=20 limit the audience to which one might show the business plan. = Alternatively,=20 they may require each party receiving the business plan to sign a = contract=20 accepting special clauses and conditions.

This situation is complicated by the fact that many venture = capitalists=20 will refuse to sign an NDA before looking at a business plan, lest it = put them=20 in the untenable position of looking at two independently developed = look-alike=20 business plans, both claiming originality. In such situations one may = need to=20 develop two versions of the business plan: a stripped down plan that can = be used=20 to develop a relationship and a detail plan that is only shown when = investors=20 have sufficient interest and trust to sign an NDA.

[edit]=20 Open Business Plans

Traditionally business plans have been highly confidential and quite = limited=20 in audience. The business plan itself is generally regarded as secret. = However=20 the emergence of free software = and open=20 source has opened the model and made the notion of an open business = plan=20 possible.

An Open Business Plan is a business plan with unlimited audience. The = business plan is typically web published and made available to all.

In the free software and open source business model, trade=20 secrets, copyright and patents can no longer = be used as=20 effective locking mechanisms to provide sustainable advantages to a = particular=20 business and therefore a secret business plan is less relevant in those=20 models.

While the origin of the Open Business Plan model is in the free = software and=20 Libre services = arena, the=20 concept is likely applicable to other domains.

[edit]=20 How Business Plans are Used

[edit]=20 Venture Capital

business plan contests - provides a way for venture capitals to = find=20 promising projects=20
venture capital assessment of business plans - focus on = qualitative=20 factors such as team.

[edit]=20 Public Offerings

in a public offering, potential investors can evaluate = perspectives of=20 issuing company ^{[10]<=
/SUP>=20}

[edit]=20 Within Corporations

[edit]=20 Fundraising

Fundraising is the primary purpose for many business plans, since = they are=20 related to the inherent probable success/failure of the company risk.

[edit]=20 Total Quality Management

For more information see Total = Quality=20 Management

[edit]=20 Management by Objective

For more information see Management= by=20 objectives

[edit]=20 Strategic Planning

For more information see Strategic=20 Planning

[edit]=20 Education

[edit]=20 K-12

Business plans are used in some primary and secondary programs to = teach=20 economic principles.^[11]= Wikiversity has a = Lunar Boom = Town=20 project where students of all ages can collaborate with designing and = revising=20 business models and practice evaluating them to learn practical business = planning techniques and methodology.

[edit]=20 Higher Education

BA, MBA programs=20
- integrative team projects=20
- projects for specific course work=20
- Business plan contests

GetSet for Business [4] provides UK educational establishments with the = facility=20 for students to learn about starting a business and produce a = professional and=20 bespoke business plan online.

[edit]=20 Satires of Business Plans

The business plan is the subject of many satires. Satires are used = both to=20 express cynicism about business plans and as an educational tool to = improve the=20 quality of business plans. For example,

Five Criteria for a successful business plan in = biotech uses=20 Dilbert comic=20 strips to remind people of what not to do when researching = and=20 writing a business plan for a biotech start-up. Scott Adams, the = author of=20 Dilbert, is an M= BA=20 graduate (U.C. Berkeley) = who sees=20 humor as a critical tool that can improve the behavior of businesses = and their=20 managers.^[12]==20 He has written numerous critiques of business practices, including = business=20 planning. The website Dilbert.com - Games has a mission statement = generator that=20 satirizes the wording often found in mission statements. His book The = Dilbert=20 Principle =E2=80=93 A Cubicle=E2=80=99s Eye View of Bosses, Meetings, = Management Fads &=20 Other Workplace Afflictions discusses the foibles of management = and their=20 plans as depicted in the Dilbert comic strips = by Scott=20 Adams.

In the article "South=20 Park's" Investing Lesson, the The Motley = Fool=20 columnist "Fool on the Hill" uses the Underpa= nts=20 Gnomes to illustrate the fallacy of focusing on goals without a = clear=20 implementation strategy. The Underpants Gnomes episode satirizes the = business=20 plans of the Dot.com era.=20 Surrounding the issue of the opening of a huge corporate coffee shop = in=20 competition with the existing small-town cafe owned by Tweak's = parents, it=20 features a three-part business plan for the gnomes to profit from = stealing=20 underpants from unsuspecting humans:

Collect underpants=20
???=20
Profit!

[edit]=20 References

^ = Small Business Notes business plan outline for = small business=20 start-up=20
^ = Center for=20 Non-profit Excellence non-profit business plan=20
^ = State of Louisana, USA government agency = operational plan=20
^ = Visitask=20 project framework=20
^ = Tasmanian government project management knowledge = base=20 government project plan=20
^ = Boston College, Carroll School of Management, Business = Plan=20 Project The business school advises students that "To create a = robust=20 business plan, teams must take a comprehensive view of the enterprise = and=20 incorporate management-practice knowledge from every first-semester = course."=20 It is increasingly common for business schools to use business plan = projects=20 to provide an opportunity for students to integrate knowledge learned = through=20 their courses.=20
^ = Eric S.=20 Siegel, Brian R. Ford, Jay M. Bornstein (1993), 'The Ernst & = Young=20 Business Plan Guide' (New York: John Wiley and Sons) ISBN= =20 0471578266=20
^ = Bent=20 Flyvbjerg, Mette K. Skamris Holm, and S=C3=B8ren L. Buhl (2002),"Underestimating Costs in Public Works Projects: Error = or=20 Lie?" Journal of the American Planning Association, vol. = 68, no. 3,=20 279-295.=20
^ = Bent=20 Flyvbjerg, Mette K. Skamris Holm, and S=C3=B8ren L. Buhl (2005), "How=20 (In)accurate Are Demand Forecasts in Public Works Projects?" = Journal of=20 the American Planning Associationsidoo kale ayaa waxaa, vol. 71, = no. 2,=20 131-146.=20
^ = Alternative Stock Library (2008-01-28). Successful Business Plan. Alternative Stock = Library.=20 Retrieved on 2008-02-28.=20
^= Pennsylvania Business Plan Competition - = competition intended=20 to teach economic principles to K-12 students=20
^= Tricia Bisoux, "Funny Business", BizEd, = November/December,=20 2002

[edit]=20 See also

Retrieved from "http://en.wikipedia.o= rg/wiki/Business_plan"

Categories: = Management<= /SPAN> |=20 Strat= egic=20 management | Entrepren= eurship=20 | Formal=20 statements | Busines= s=20 documents

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