As the following table shows, there are lots of sections in the formal plan document that are basically describing and explaining your business to outsiders. I’d like to go back to the general plan outline from the first section, and look this time at the kind of descriptions and explanations you’ll need to add as supporting information for a formal business plan document.

Section Notes and comments
1.0 Executive Summary1.1 Objectives1.2 Mission1.3 Keys to Success These are pretty much in the Heart of the Plan. Jump ahead to the next Section, Dress it As Needed, to look at the Executive Summary. talked about objectives and mission and keys to success in the Heart of the plan.
2.0 Company Summary
2.1 Company Ownership
2.2 Start-up Plan (for new companies) or Company History (for ongoing companies)
2.3 Company Locations and Facilities
The formal plan should include basic summaries to get people up to speed with your company formation, history (if it has history), locations, facilities, intellectual property, and so on.This is where you put your startup costs if you’re a startup, or the past performance information if you’re an existing and ongoing company.
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’ve gone through this in the Heart of the Plan, but now we’re talking about descriptions and explanations. Keep it simple. Remember, though, that this is a lot about credibility. You’re proving that you have an interesting business offering, usually to outsiders. Proof — designs, patents, quotes, and illustrations — is very important.One of the mistakes a lot of people make in a formal business plan document is explaining too much about the technology. A business plan is about the business. Leave the technical explanations for the appendices. Use the team backgrounds and patent information (if you have it) to make the technology credible.
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
This is mainly the market proof you’ve been doing in this section. Write it out, explain it, make it credible, and give it numbers.
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
You’ve thought it through. You have the heart of your plan. This is where you explain it in text, preferably simple easy to read text, full of bullet points.The good news is that you do know your marketing strategy, sales strategy, and the rest of it. The bad news is that as we get into this as supporting information, you have to take the time to explain and describe it.

The complete plan requires textual explanation of the key numbers and tables you had in your organic plan-as-you-go plan. That includes explaining the assumptions behind the sales forecast, and the business activities in the milestones table. Add simple text, with lots of bullets instead of long paragraphs.

6.0 Management Summary
6.1 Organizational Structure
6.2 Management Team
6.3 Management Team Gaps
6.4 Personnel Plan
For a plan for investment, the description of the management team is often the single most important section. Professional investors usually look to the management team as the best way to reduce risk. They want to see backgrounds, track records, and successes. Angel investors follow the same pattern, and that’s also true with business plans for business venture contests.You did a personnel plan in numbers in the expense budgets, and you linked that into the full financial forecast profit and loss. This is where to put that table into the plan.The organizational structure is the underlying logic of the who does what part of your plan in flesh and bones. Most standard plans include an organization chart at this point.

The section on management team gaps builds credibility for high-profile plans. If you’re taking a plan to investors or to a business plan contest, your readers will probably see those gaps. Don’t ignore them. Acknowledge the gaps and show that you’re intending to fill them.

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
Usually the formal complete plan starts this chapter with a simple summary explanation of the underlying financial strategy. That would be a reference to growing through investment, planning for multiple rounds of investment, for example. Or it could be financing growth with loans, whether SBA guaranteed or not. Or it might be simple bootstrapping (although those businesses aren’t as likely to need the formal business plan document).Then most of the rest of this chapter is a matter of showing the financial projections we’ve discussed in this book. One very important addition, skipped in too many plans, is to offer basic explanations in text. Highlight the growth rates, and key points, in the tables.

As a general rule, I recommend including just annual projections in the tables embedded in the text of a plan, along with a heavy dose of business charts. Leave the monthly tables for the appendices.

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Tim BerryTim Berry
Tim Berry

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