BUSINESS PLAN OUTLINE: A PRACTICAL EXAMPLE
A business plan is a document that gives detail of all aspects of the business you are currently doing or the one you want to establish. A business plan looks like a business proposal but it is not a business proposal, A business plan is more detailed than a business proposal. You need to know that the type of industry you are entering will determine the structure of your business plan.
WHY DO I NEED TO WRITE A BUSINESS PLAN?
- It provides a guide for your business
- It helps in getting financial assistance for your business
- It opens your eyes to issues that need to be addressed
- It establishes benchmarks to keep your business under control
- Helps identify items of cost and revenue.
- It helps you to develop a perfect marketing strategy
- It helps you develop a good financial statement
- Helps you make the necessary decision for business
The following is a typical business plan outline with some practical real-world examples.
In your cover letter, introduce yourself and the business in a very brief manner. Below is a typical example of how a cover letter should be.
My name is Oluwaseun Adebayo and I am in the Education Industry business. The business is located at 6, Muritala road, Sango Ilorin Kwara State, Nigeria. I have determined the total asset need of the business to be #20,000,000 I will contribute 20% of the needed capital (#20,000,000).
We are seeking debt financing in the amount of #1,600,000. The loan will be repaid in monthly installments of # 833,333 over a period of 2 years. The proceeds of the loan will be distributed as follows: #5,000,000 for land, # 2,000,000 for building improvements, #5,000,000 for equipment, # 4,000,000 for inventory, and the remaining #4,000,000 will be held as working capital.
A current balance sheet, list of collateral, 12-month Pro-forma income statement, 12-month pro-forma cash flow, two-year Pro-forma income statement, and break-even analysis are included in the attached business plan under the finance section. Your prompt consideration is appreciated. If additional information is needed, please contact:
6, Muritala road, Sango Ilorin Kwara State, Nigeria.
The executive summary is the last to be written and the first part that will be read. The goal of the executive summary is to summarize each major section of the business plan. Try to limit your summary to one or two paragraphs per section. Do not introduce anything in this section that is not supported in the body of the plan. Remember, a summary just focuses on the main points that your intended reader wants or needs to know.
- Company Summary
The business is an educational consult Institute, whose aim is to breed students who wish to write their SSCE, NECO and equivalent. And ‘A’ level students (those who want to enter into higher institution 200L). We also provide other educational consulting services.
- Product or Service Summary
Our products are students. With the quality teachers/lecturers at our disposal, our students have been performing well.
- Market Summary
It is important to know that educational consults are no longer a small market in Nigeria, the market is large and we have contact with several secondary schools in the state, so as their students are finishing from school, they can start attending ours. As we prepare them well for higher institutions.
- Management Summary
The decision would be made by the owner (Oluwaseun Adebayo), together with his qualified team. In this team, we have people of high degrees and qualifications who even have a sound education or academic background. Each department in the consult is spearheaded by the most senior personnel in terms of experience and qualifications.
- Financial Summary
Our current capital is #4,000,000 with which we hope to start the business, and with the goodwill we have established, we can have already raised 150 students. With this, the business is projected to break even in 3 years’ time. Also, the business would have the ability to service its debt annually, with its current number of students, while increasing its students base.
This is a profile of the business and is usually one or two pages. For a company that is just taking off or about to start, you are permitted to describe your business profile in terms of what you envision for the company. In an existing company, you should explain the “before” and “after” position of the company.
- The business was founded in the year 2010, by Oluwaseun Adebayo.
- the business is a sole proprietorship business.
See an example below that’s relevant to the line of thought we have been on:
Our mission is to enable students to achieve their admissions goals, and to help them reach their academic potentials.
This section should present the facts that convince the investors that your product or service has a market from which desired sales can be generated.
Educational consult service is a growing business in Nigeria, and we have enough proof regarding the previous result of our students. With the help of qualified teachers, our student performance in the past has been desirable. I can buoyantly say that each year, we have increased the number of students that enroll with us.
We pretty understand the market in which we operate, and our most advantage has been in the good performance of our students – their performance and testimonies literarily keep bringing more students to enroll with us with almost no effort on our part.
MANAGEMENT AND PERSONNEL
This section should illustrate that the right people are in charge and doing the right things. The management should have experience in the industry or at the very least experiences that are relevant to the industry. If you do not possess the right skills then you may need to hire an employee or a consultant with those skills.
The financial section consists of several Pro-forma financial statements that are generated from the previous sections. In some ways, the other sections of the business plan are just supporting information for the financial section. To build the financial statements the previous sections of the business plan are combined with the following information:
- List of startup costs
- Capital equipment expenditures
- Depreciation schedule
- List of collateral
- Sources and uses of financing
The following are the typical financial statements found in the financial section:
- 12 month projected cash flow statements on a month by month basis
- 12 month projected income statements on a month by month basis
- Three year projected income statements on a year to year basis
- Balance sheet after loan, expansion, or start-up
- Break-even analysis
- Ratio analysis
Amount paid per student (WAEC, Neco, jamb others) #20,000 (35 students) #700,000
Amount paid by A level students (50,000) 65 students (3,250,000)
Variable Costs and expenses
- cost of marker N200,000 per annum
- salary of workers N1,100,000
- lightening N15,000 per annum
Other miscellaneous N50,000 per month
Total Variable Costs N1,365,000
Sales Price Less Variable Costs = N3, 950,000- 1,365,000= N2,585,000
Rental cost N1,000,000
Furniture and equipment N 1,500,000
Total Fixed cost N2, 500,000
The appendix is where you put supporting data that does not easily fit into the business plan narrative.
- Market research data
- Resumes’ of key owners and managers
- Personal financial statements of owners with 20% or more ownership
- Patent or product information
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