Theoretical and practical recommendations

• Business plan structure
• Manual issue for companies seeking for investments

1. Statement of Confidentiality: Ensures that the information contained in the business plan is not disclosed to third parties without prior approval from the company or a specific person within the company.
2. Table of Contents.
3. Mission Statement.
4. Executive Summary: This segment briefly outlines the contents of the plan.
1. Business Description: The description of the company includes the company set-up (corporation, partnership, etc.) as well as the products or services the company offers. It specifies location and the date of founding. It also explains where the company has found its niche. Is the company profitable and within a growing industry?
2. Market Description: This section looks at the complete market. It details size, growth (in revenues), and the industry's current market environment. Industry trends and competition are briefly mentioned here.
3. History of the Business and Market: The history mentions the date of founding, projects completed, success of the projects within the market, and the market's changing environment. Also, it notes how the company is positioned within the market.
4. Management: Incorporate the structure of the company into this section. List members of the management team (Executives/Directors) along with their experience.
5. Ownership Structure: Who are the principal owners? Note the shareholder interest as percentages. How many shares are outstanding? Are there options or warrants included in the structure?
6. Financial Projections: This segment includes a brief synopsis of the anticipated growth of the company. Are acquisitions expected? Where is the company planning to expand? Incorporate key figures such as net revenues, EBITDA and pre-tax income. Typically a five-year projection is executed.
7. Investment Criteria: Specify the financial goals of the company in this section. Explain the use of the funds as well as the impact of the funds will have on the company.
8. Summary: Indicate the success of the company in the current market. In addition, include the company's business potential.
5. History: Discuss the development and growth of the company in this segment.
1. Past Decisions: Provide a detailed time-line description of the steps the company has taken to achieve its current position. How has the company dealt with market change? Explain the past decisions and why they were made.
2. Description of Facilities: List the number of buildings and locations, adding detail where necessary (e.g. main production equipment, storage facilities, distribution network)
3. Employees: Briefly detail the number of full time employees, how they are distributed, and whether or not they are salaried. Include the benefit options offered to employees in this section as well. Are employee relations good? Summarize the company's philosophy about employees and their development.
4. Properties: In this part specify the square meters and rental rates linked to properties owned by the company. Include the location of rented property as well as the expiration dates of the lease agreements.
5. Wrap Up: Provide a brief conclusion for the history segment. Is the company cash flow positive? Is the company in a favourable position because of past decisions? Is the company position to face the future?
6. The Market: This segment provides an in-depth discussion of the market focus. How large is it? Is it a growing market? Include the market revenues. Clearly note the visible trends in the market. History as well as projections for the industry are vital. Is it heavily regulated? How has the industry changed because of the technological revolution?
7. The Competition: Who is the company trying to surpass? List the direct and indirect competitors. How do they compare in size, operating efficiency, and financial performance? What are their strengths and weaknesses? Describe how they are different from your company.
8. Business Strategy, Positioning, and Business Development: The company achieves its vision by attaining the goals that have been set. This section details specific tactics your company will take in order to accomplish the objectives. It provides a clear method the company plans to follow. Specifically, where and how is the company going to develop? What resources (time, people, capital) will be required?
9. Operating Plan: To execute the vision, the company must monitor several operating metrics. What operating guidelines are set to ensure that the objectives will be obtained? How often are they being monitored? What is management's role in the process? Examples include billing, data processing, quality control, recruiting and training, government regulation, local competition, employees, insurance, properties, and legal. For each of these areas specific to your company, provide a brief summary of the operating plan.
10. Management: List the executives (names and titles) and provide a detailed summary of each. Also, include resumes of significant management members. You may include an organisation chart along with an explanation of responsibilities in this section. Mention the Board of Directors as well, accompanied by background information on each director.
11. Financials: This section is the cornerstone to a successful company.
1. Audited Financial Statements: Typically it includes the previous three years. It contains the Income Statement, Balance Sheet, and Statement of Cash Flows.
2. Projection Assumptions: Explain the assumptions made for the five-year projections. If the company plans to acquire another company or plans other major changes, include them here and incorporate them into the projections. Other changes to consider are revenue, inflation, management fees and taxes. What are the components of the company's business model? What are the revenue drivers? What are the major components and volatility of COGS?
3. Five-Year Financial Statements Projection: This portion includes the projected Income Statement, Balance Sheet and Statement of Cash Flows based on the assumptions.
12. Equity Capital Requirements and Comparables
1. Financial Assumptions: Specify how much money the company is seeking, when you are looking for it, what type of funding you are looking for, and how you plan to use the funds. Indicate the debt and/or equity that the company anticipates in the future. Is there a target capital structure?
2. Comparable Companies: Typically publicly traded companies are considered here, providing a trading price, FYE, P/E and other relevant information.
13. Appendix: Include other pertinent information such as analysts' and industry reports in this final section.

Prepared by specialists of TACIS-INVAS project, 2000.
Business Plan Structure