Briefing Paper No 5b

What information do I include in these sections?

Now you have a clear idea of the layout, you can start thinking about the specifics:

Index

·Start with a cover and then a contents page. First impressions count.

Introduction

·State the objective of the business plan.

·Give an Executive Summary, which should be a brief synopsis of the plan.

·Indicate the amount of finance required, principal reasons why needed and an outline of the planned repayment.

·Try to convince the lender that they have a unique opportunity here.

Background

·Provide historical information concerning the existing business, if applicable.

·Describe location

·Full details of services/products supplied with information on individual volumes/margins

·Principal source of customers and other customer information

·Main operational costs and major suppliers

·Summary of main plant/equipment in use

·Staffing of the business, organisation summary/chart, industrial relations

·Industry in general/market environment and information on competitors

·Key financial information from recent years e.g. sales, gross profit, net profit etc.

The Future

·Provide details of future plans of the new business and, where appropriate, indicate the time scale involved.

·Capital structure of the business including security to be given for finance and proposals for repayment.

·Any changes to services/products supplied including plans to increase sales or cease low profit/loss making activities or commence new activities and advertising campaigns etc.

·Any changes to operating costs including plans for cost savings, use of new suppliers, use of new technology/equipment etc.

·Any staffing changes including redundancy or recruitment plans etc.

·Effect on the business within the industry including impact on business of competitors etc.

·Potential risks/pitfalls and planned responses.

·Key financial information over next two years including sales, gross and net profits, interest cover and gearing ratios (ideally shown under various scenarios e.g. best case, expected case, worse case).

Management/Personnel

·Managers resume information should be provided but note the following:

·Only include educational details if this is relevant to the business or indicates a genius.

·Main objective is to illustrate the experience/expertise/ability of management within the business and/or management itself.

·Take time to emphasise good points here including details of achievements or successful track records of running a business or borrowing and repaying etc.

·Give details in reverse chronological order to highlight most recent events unless this is counter productive. Financial reporting and management information systems

·Brief details should be given of proposed systems to ensure accurate financial reporting and to enable appropriate information to be provided to management (and the lender) concerning the ·business on a timely basis.

·Consultants and professional advisors

·Details of professional advisors (e.g. MacIntyre Hudson if used) and consultants should be given. If a consultant has notable experience/achievements in the industry, this should be explained in more detail.

Appendices - the detailed financial analysis

1.Detailed figures to support the above would be shown here, as follows:

2.Historical profit and loss accounts of the existing business.

3.Forecast profit and loss Accounts of the new business (under various scenarios).

4.Cashflow forecasts of the new business (under various scenarios).

5.Forecast balance sheets of the new business (under various scenarios).

6.Assumptions/information underlying these figures.

COMMUNITY BUSINESS PLAN CHECKLIST

Make sure that these sections include the following:

A brief account of how the company began
Clearly explain the origins behind the company's creation and how you or your business associate came up with the idea to start your business.

Your company's goals
Explain in a few paragraphs your short and long-term goals for the company.
How fast do you think it will grow? Who will be your primary customers?

Biographies of the management team
The management section should include the names and backgrounds of lead members of the management team and their respective responsibilities.

The service or product you plan to offer
A key aspect of this section will be a discussion of how your product or service serves a gap in community needs.

The market potential for your service or product
You'll need to do some research for this section. If it's a locally-based business, you need to assess the demand for your offering within an xx-mile radius, based on what you determine is a reasonable distance from your business.

A Marketing strategy
How do you plan to tell your community that you're open for business? Will you rely exclusively on word of mouth (not a good plan unless you've already got a reputation)? Will you advertise in print or on the Web? You'll also need to include how much you plan to spend on marketing.

A three to five year financial projection
This section should include a summary of your financial forecasts, with spreadsheets showing the formula you used to reach your projections. You'll need balance sheets, income statements and cash-flow projections for the entire forecast period. The summary in this section is also where you would tell prospective lenders how much money you'd like to borrow to cover your startup costs. The assumptions that you make in this section will make or break your company's success. If you're unsure about using this kind of financial modeling, find a professional. It's worth the money.

An exit strategy
All good business plans include a section that lays out the benchmarks you'll use in deciding to call it quits. The strategy could be based on a financial figure, revenue growth, the market's reception to your idea, or a consensus among top officers.

Websites
Federation of small businesses www.fsb.org.uk
The Princes Trust www.princes-trust.org.uk
Voluntary Action Manchester www.VAManchester.org.uk
Business Link: www.businesslink.org
Free Sample Business Plans: www.bplans.com
The Institute of Social and Ethical AccountAbility (ISEA): www.accountability.org.uk

Further Reading
Definitions of Community Enterprise
A Community Enterprise Company
Why a Social Audit?
Social Wealth Organisations
The Voluntary Sector Legal Handbook - Directory of Social Change
Voluntary but not Amateur - London Voluntary Service Council
A practical Guide to Company Law - Directory of Social Change

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