What Is A Business Plan?

Objectives

To develop a document that

presents a picture of the business,
where the business is going, and
how it will get there
To understand the organization of
a business plan
“If you don’t know
where you’re going,
you may end up
somewhere else.”
-Casey Stengel
 What Is A Business Plan?

A document that conveys your

organization’s prospects and growth
potential.
A written document that describes all
the steps necessary for opening ang
operating a successful business.
 Business Plan does the following:

 Describes what your business will produce, how

will you produce it and who will buy your product
and services.
 Explains who will run your business and who will
supply it with goods.
 States how your business will win your customers
from competitors and what your business will do
to keep your customers
 Provide detailed financial information that shows
how your business will succeed in earing a profit.
 Describes plans for the future growth of your
business
 Purposes of Business Plan
1. A Business Plan expalins the idea
behind your business and spells out how
your product or service will be produced
and sold.
2. A Business Plan sets specific objectives
and describes how your business
expects to achieve them.
3. A Business Plan describes the
backgrounds and experience of the
leadership team of the business.
 Importance of Business Plan

1. A Business plan makes you think

about all aspects of your business.
2. A Business Plan may help you
secure financing for your business.
3. A Business Plan helps you
communicate your ideas to others.
 Format of the Business Plan

1. Title Page
2. Executive Summary
3. Vision/Mission and Goals
4. Current Position
5. Strategic Analysis
6. Implementation
7. Projections
 Executive summary

 Written last
 Maximum of two pages
 Major points of each section
 Vision/Mission & Goals

 Where is the business headed?

 What do you want the business to achieve?
 What time frame?
Current Position
 How do you describe the farm?
 History: important milestones
 Products/services: What? How much?
 Resources: Who owns what? What is their reward?
 Management: Who? What do they do?
 Organizational Structure: Who’s the boss?
 Marketing: What tools? What customers?
 Ownership Structure: Legal form?
 Current Position
Production Management
Resources Resources
Farm •Management
Land (shares)
Business Responsibility
Land (cash rent) and Authority

Machinery •Organizational
chart
Paid Labor Products/Services
Unpaid Labor
Pie Chart
Of Gross
Sales by
Enterprise
 Strategic Analysis

 What opportunities and threats does the business face?

 What are our strengths and weakness?
 What do we do better than others?
 What strategy will we use?
 Implementation

 For each business unit

 What size?
 What resources will be needed?
 How will the resources be acquired?
 How will product/service be marketed?
 What performance targets will be set?
 Implementation

 For the firm as a whole

 What is the scope of business?
 How will it be financed?
 How will the business be organized?
 What are our social responsibilities?
 How will we develop new management skills?
 When will it happen?
 How much will it cost/generate?
 Projections

What numbers can we put behind our

plan?
What assumptions have we made?
What do we expect for our ROA and
ROE?
What is our contingency plan?
What will we do in an emergency?
 Be sure that . . .

1. Your goals are tied to your vision

2. You can point to major opportunities
3. You’re prepared for threats
4. You’ve described your customers
5. You know your strengths/weaknesses
6. Your strategy makes sense
7. Your data is accurate
8. You’re really ready for change
9. Your plan is clear, concise, and current
 Keep in mind that. . .

This is an opportunity to work on the

business
This is important and difficult work but
not urgent
The value of the work will increase as
you share, review, and update the
business plan
Now what?

 Share your plan judiciously

 Live it
 Revisit and revise
Strategic Business Planning for
Commercial Producers
 References

 The Business Plan: Roadmap to Success.

www.sba.gov/starting/indexbusplans.html
 Tiffany, Paul and Steven D. Peterson. Business Plans for
Dummies. Foster City, CA: IDG Books, 1997.