THE STRUCTURE OF A

BUSINESS PLAN
Kamaludin Yusra, PhD
Business Planning in Tourism
English Dept, School of Education, University of Mataram
THE STRUCTURE OF THE PLAN
 Summary
 The Business Background
 The Market
 Operations
 Management
 The Proposal
 The Forecast
 Financial Information
 Risks
 Legal Issues and Confidentiality
 Selling Your Business
 The Internal Business Plan
SUMMARY
Whatever the really key points are, they must be in the
summary – only you can decide what they are but the
minimum must be an outline of:
■ the business;
■ the team;
■ the proposal;
■ why it will succeed;
■ what the rewards will be;
■ any major risks and how you can minimize them;
■ what you want from the reader
 THE BUSINESS BACKGROUND
The The Markets Supply
The How did you
Product/Service  What are your main
Business  What is the get here?
You must explain inputs? Are there a
 What is structure of the
the key issues market?
limited number of Explain how
suppliers?
it, what briefly and clearly: the business
 Who do you  Are there any
does it  Don’t explain the
sell to? constraints on your got to where
do? technicalities ability to get supplies
here, but  Why do they when you want, at the it is. If the
 How was buy?
broadly how it price you want? business has
it does what it  Why do they Answer the key
questions that may problems
establishe does. buy from you?
d?  Where does it  How do you
occur but don’t go into
great detail at this
explain how
 By
do it? distribute your stage: they arose,
 Is there anything product or  Does it have key what has
whom? unique about it customers or
service? suppliers? been learnt
 Why? and have you a
 Very broadly,
 Has it
patent or other  How many outlets or and how they
protection on it? who are the factories does it have?
been competitors?  How big is it? will be or
 How is it
successfu supplied or  How do they (Turnover? Profits? have been
Staff?
l? distributed compete? resolved.
THE MARKET
 Overview  Market Segmentation
 Market Structure  Differentiation
 Competitors  Pricing
 Customers  Barriers to entry
 Distribution  New Technologies
 Distribution via internet  Mixed Strategies
 Trends
 Competitive Advantage
OPERATIONS
 Differences: how different is your planned business:
 Processes: what processes are involved in the business running?
 Control: how do you deal with supply, delay in supply or staff
overtime?
 Experience: explain how you would control day-to-day business?
 Supply: how do you deal with supply issues? In case of low supply,
what will you do?
 Systems: what computer systems will you use
 Location and Environment: in which location and in what
environment will the business be established?
 Regulatory Control: what legal permit do you need to run the
business?
MANAGEMENT
You are the team to back. You can make it happen. So tell the reader
about yourselves, sell yourselves, giving the key points about your
background:
What experience do you have that is relevant to this business or
project?
What skills do you have that are relevant to this business or project?
What organization structure is there for the business?
What weaknesses do you have as a team and how will you address
them?
What evidence of past success can you show?
How would you control sale?
How would you control stock?
THE PROPOSAL
 Explain clearly and concisely
■ what you propose to do;
■ how you propose to do it;
■ where you propose to do it;
■ when you propose to do it;
■ why you will succeed;
■ what you need to enable you to carry out the plan;
■ what returns you offer
 Give a clear statement of what you propose to do. Don’t make it long and
confusing. State your objectives so that the reader will understand when they have
been achieved.
 Make sure your objectives are clear, achievable, measurable, useful, and timed.
 Explain why you would succeed
 Ask for what you want
 Explain what you have invested.
 Describe financial or social rewards for the investment/business in return
 Explain how the investors might exit the business: e.g. by selling shares at high
prices
THE FORECAST
 The Sales forecast
 Costs (direct costs or costs of sales; distribution; staff;
property; overheads; depreciation; finance)
 The Five-Year Forecast
 Reviewing the Plan: Do the figures make sense? Sensitivity
analysis: What if …..
FINANCIAL INFORMATION
 profit and loss account;
 balance sheet;
 cash forecast;
 funds flow.
RISKS
You can
 demonstrate that the probability of something happening is
small;
 show that the impact of the event would not damage the
business seriously;
 explain how you would respond to adverse circumstances
There are generally only four types of risk:
■ that sales are low;
■ that margins are low;
■ that costs are high;
■ that a major operational problem occurs
LEGAL ISSUES AND
CONFIDENTIALITY
 Confidentiality: The preamble to your plan will try to insist:
■ that the document is an information memorandum and not a prospectus
(the latter word will not be used) and certainly not an offer for sale;
■ that the document shall not form a part of any contract;
■ that the directors and shareholders of the business are not giving any
warranties or guarantees that the information contained in the document
is accurate;
■ that the recipient will not rely upon the document but will make their
own enquiries about the business.
■ Get recipients to sign a confidentiality agreement.
■ Insert a paragraph at the front of the plan that binds the reader to
secrecy.
■ Try to omit sensitive information.
OTHER USES OF BP
SELLING YOUR BUSINESS
 Explain why you are selling the business.
 Emphasize the great opportunities for the business
 Don’t waste time illustrating that sudden upturn in business
expected imminently
 Include a forecast
 Identify the potential buyers
 Hold back some information

THE INTERNAL BUSINESS PLAN
There are SIX important ways in which a business plan helps
to run a business or non-profit-making organization:
■ strategic direction;
■ performance management;
■ performance measurement;
■ coordination and control;
■ communication;
■ empowerment.
End of Presentation
 Individual presentation of BP will start Next Week