There is a lot to be said for the formal business plan. Concretely, it covers all the bases. You get a full review of a business, soup to nuts as they say, and if you follow one of the standard outlines, you’re less likely to leave something out. That makes things conceptually easier.

So while I’m not recommending that big formal plan for all, you certainly can start with the plan-as-you-go plan and end up with the formal business plan. And I’d hate for this book not to tell you how.

Allow me, then, to go over the standard contents of the standard plan, and relate them to part of this book. I’ll give you the jumps, so to speak.

Sequence of Components in a Standard Business Plan What It Is and Where to Read More About It.
1.0 Executive Summary
1.1 Objectives
1.2 Mission (or mantra)
1.3 Keys to Success
These are good things to think about. You can jump there now if you want, specifically my discussion on missions and mantras, objectives, and keys to success. These are in Chapter 3, “The Heart of the Plan.”
2.0 Company Summary
2.1 Company Ownership
2.2 Company History (for ongoing companies) or Start-up Plan (for new companies)
2.3 Company Locations and Facilities
You’re not going to do this until you have to. It’s dressing (see Chapter 5), something you’ll do when you need to describe your plan to outsiders.
3.0 Products and Services
3.1 Product and Service Description
3.2 Competitive Comparison
3.3 Sales Literature
3.4 Sourcing
3.5 Technology
3.6 Future Products and Services
You do a lot of core thinking about what your business offering is, and why people want to buy from you, when you work on the Heart of the Plan (see Chapter 3). But don’t necessarily write out all of these descriptions unless you need a full plan document, which is discussed in Chapter 5, “Dressing and Growing.”
4.0 Market Analysis Summary
4.1 Market Segmentation
4.2 Target Market Segment Strategy

4.2.1 Market Needs
4.2.2 Market Trends
4.2.3 Market Growth


4.3 Industry Analysis

4.3.1 Industry Participants
4.3.2 Distribution Patterns
4.3.3 Competition and Buying Patterns
4.3.4 Main Competitors


Your sense of who your target customer is, and what you’re selling him, why she buys, and what business you’re in is all in Chapter 3, “The Heart of the Plan.” However, the plan-as-you-go plan separates the market analysis that influences strategy, and the market analysis that proves market potential for outsiders, from the main plan. It’s covered in Chapter 5, “Dressing and Growing.” Unless it drives your decisions, leave it for later.
5.0 Strategy and Implementation Summary
5.1 Strategy Pyramids
5.2 Value Proposition
5.3 Competitive Edge
5.4 Marketing Strategy

5.4.1 Positioning Statements
5.4.2 Pricing Strategy
5.4.3 Promotion Strategy
5.4.4 Distribution Patterns
5.4.5 Marketing Programs


5.5 Sales Strategy

5.5.1 Sales Forecast
5.5.2 Sales Programs


5.6 Strategic Alliances
5.7 Milestones
Your strategy is discussed in Chapter 3, “The Heart of the Plan.” Writing it out and dressing it up is in Chapter 5, “Dressing and Growing.” The Sales Forecast is part of Chapter 4, “Flesh and Bones.” So is the milestones table. Milestones are critical to the action plan and the sales forecast is the key to the financial plan (see Chapter 4).

Implementation and plan-vs.-actual analysis comes up again in Chapter 6, on the planning process, and planning as management.

6.0 Management Summary
6.1 Organizational Structure
6.2 Management Team
6.3 Management Team Gaps
6.4 Personnel Plan
Your personnel budget is covered in Chapter 4, “The Flesh and Bones,” The rest of this is description, for outsiders, covered in Chapter 5, “Dressing and Growing.”
7.0 Financial Plan
7.1 Important Assumptions
7.2 Key Financial Indicators
7.3 Break-Even Analysis
7.4 Projected Profit and Loss
7.5 Projected Cash Flow
7.6 Projected Balance Sheet
7.7 Business Ratios
7.8 Long-Term Plan
I discuss assumptions, sales forecast, expense forecast, and some cash flow traps in Chapter 4. You really can’t be planning without them. Then, in Chapter 5, we go from there to the full financial plan including the standard projections you’ll need to create a complete financial picture for outsiders.
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Tim BerryTim Berry
Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Follow him on Twitter @Timberry.