The Business Plan

A BRIEF GUIDE

There is a lot you want and need to know when starting your own business. By preparing a business plan you may find that many of your questions will answer themselves. An educated business plan will contain a descriptive summary of all past (if not a new business), present and future activities of your business. It will detail the company's sources and use of funds, management and other personnel, labour relations, production techniques, research, and marketing strategy for your product or service.

It will set all your objectives, guidelines and milestones on paper. It will include a statement of how much capital is required (this will be necessary should you have to obtain a loan). It should also list a wide range of items such as your day-to-day business operations, who your competitors are, your strengths and weaknesses, new and existing markets and costs and a five year forecast of revenue and profit.

A typical business plan starts with your business idea, a description of what the service or product will be, the market for your product or service, how much capital is required for startup and forcasted financial results. This introductory page is then followed by a table of contents and then the business plan itself.

As every business is different, the specific contents of each business plan will also be different. The City of Oshawa's Economic Development Office, put together this list of the major components of a business plan, along with most of the questions your plan should answer.

1. Define Your Business

What does your business do?
What influenced you to start this business?
What makes your business different from others?
What position in the marketplace does your business hold in terms of your clients and your competitors?

2. Product or Service

What will you be selling?
Why will it appeal to customers?
What makes your product or service different from others?
What advantages does it offer?

3. Analysis of Your Market

What is your target market?
What size is your target market?
Who are your target customers? (i.e. age, sex, income bracket, etc.)
What do you expect them to pay?
Why will they want to select your service or buy your product?
How often will they need your service or product? (i.e. is it seasonal?
What are the current and projected trends in that industry?
Who are your main competitors? (i.e. how large, how old, how strong, etc.)
What advantage(s) do they have over your business?

3. Detailing Your Marketing Plan

What marketing strategy have you put in place for your business?
How will you reach your target market?
What sales approach is your business using?
Will you require resources? If so, what are they?
How have you planned your pricing?

4. Your Production/Operation Plan

Does your site offer competitive advantages? What are they?
What production process have you laid out?
What equipment, supplies or facilities are required?
How long is your defined production process?
What are the labour requirements and costs?
What special skills or experience are required by your workforce?
How will you handle delivery requests?

5. Your Management Team

What is their education and experience?
What are their managerial achievements/abilities?
What is your organizational structure?
What are your projected management needs?

6. Your Financial Plan

What is the total cost of your business start-up?
How much financing do you require for your business start-up?
What are the projected revenues and expenses for the first year?
What is the break-even point?
What are the cash flow requirements?
What are the monthly cash flow projections for the first year?
Can you afford to carry accounts receivable?
When and how will you pay down/off your loan(s)?

• Legal Factors

What legal structure and name are planned for the business?
What permits and zoning by-laws apply to your operation?
What licenses or patents do you have to obtain?
What are your tax obligations?
What insurance policies are needed?
What are the regulations governing labour and the buildings?

• Appendices

Do you have:
Resumes of key managers?
Market studies?
Published information on your product or service?
A list of major contracts?
Charts or graphs to support your projections?

The "How to Prepare a Business Plan" guide and "Record Keeping Made Easy" are both available through the following offices.

Ministry of Economic Development and Trade Small Business Help Centre (East Office)
150 Borough Drive
Scarborough, Ontario M1P 4N7
Tel: (416) 396-7169
Fax: (416) 396-5088
www.enterprisetoronto.com

Publications Ontario
50 Grosvenor Street
Toronto, Ontario M7A 1N8
Tel: (416) 326-5300 or 1-800-668-9938
Fax: (613) 566-2234
www.publications.gov.on.ca

Pickering Public Library
One The Esplanade
Pickering, Ontario L1V 6K7
Tel: (905) 831-6265
Fax: (905) 831-8795
www.picnet.org

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