Business planning is about results. You need to make the contents of your plan match your purpose. Don’t accept a standard outline just because it’s there.

What is a Business Plan?
A business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities. Unfortunately, many people think of business plans only for starting a new business or applying for business loans. But they are also vital for running a business, whether or not the business needs new loans or new investments. Businesses need plans to optimize growth and development according to priorities.

What’s a Start-up Plan?
A simple start-up plan includes a summary, mission statement, keys to success, market analysis, and break-even analysis. This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing, but it is not enough to run a business with.

Is There a Standard Business Plan?
A normal business plan (one that follows the advice of business experts) includes a standard set of elements. Plan formats and outlines vary, but generally a plan will include components such as descriptions of the company, product or service, market, forecasts, management team, and financial analysis.

Your plan will depend on your specific situation. For example, description of the management team is very important for investors while financial history is most important for banks. However, if you’re developing a plan for internal use only, you may not need to include all the background details that you already know. Make your plan match its purpose.

What is most important in a Plan?
It depends on the case, but usually it’s the cash flow analysis and specific implementation details.
• Cash flow is both vital to a company and hard to follow. Cash is usually misunderstood as profits, and they are different. Profits don’t guarantee cash in the bank. Lots of profitable companies go under because of cash flow problems. It just isn’t intuitive.
• Implementation details are what make things happen. Your brilliant strategies and beautifully formatted planning documents are just theory unless you assign responsibilities, with dates and budgets, follow up with those responsible, and track results. Business plans are really about getting results and improving your company.
Can you suggest a Standard Outline?

If you have the main components, the order doesn’t matter that much, but here’s the outline order we suggest in Business Plan Pro software:
1. Executive Summary: Write this last. It’s just a page or two of highlights.
2. Company Description: Legal establishment, history, start-up plans, etc.
3. Product or Service: Describe what you’re selling. Focus on customer benefits.
4. Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.
5. Strategy and Implementation: Be specific. Include management responsibilities with dates and budget.
6. Management Team: Include backgrounds of key members of the team, personnel strategy, and details.
7. Financial Plan: Include profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.

An expanded plan outline
We don’t recommend developing the plan in the same order you present it as a finished document. For example, although the Executive Summary comes as the first section of a business plan, we recommend writing it after everything else is done.

You need a business plan if you’re running a business. A business plan is like a map and a compass for a business. Without it you’re traveling blind. With a plan you set objectives, establish priorities, and provide for cash flow.

You need a business plan if you’re applying for a business loan. Most banks require it, and even those that don’t strictly require it expect it. They expect it to be a summary of the business, with some predictable key points.

You need a business plan if you’re looking for business investment. The plan won’t get you the investment, but not having a plan will mean you won’t get investment. Investors require a business plan. They invest in the people, the idea, the track records, the market, the technology, and other factors; but they look to the business plan to define and explain the business. You need a business plan if you’re working with partners. The business plan defines agreements between partners about what’s going to happen.

You need a business plan to communicate with a management team. The day-to-day business routine is distracting, problems come up, opportunities appear, and commitments should be followed and tracked. How do you know where you are in business without establishing where you started and where you intended to go? How can people commit to a plan they can’t see? You need a business plan to sell a business, or to set a value on a business for tax or other purposes such as estate planning, or divorce.

Sadly, many of the people who need a plan don’t know they need it. They get trapped by the myths of business planning. They don’t realize that plans are not just for start-ups, loans, or investment. They don’t realize that business plans are easier to develop than most people think. To succeed in business you simply must plan the steps, set priorities, allocate resources, and manage the cash.

Sure, some people say they don’t plan, but if they’re successful then they’re actually always planning in their heads. And you can keep that plan in your head if your business is very simple, cash flow is always adequate, and you don’t work with other people, and you don’t need to communicate your business plan with other people either.

Don’t accept disadvantages in business. Don’t try to run without a plan. Doing a plan is probably much easier than you think, and much more valuable.

Is it the length of the plan? The information it covers? How well it’s written; or the brilliance of its strategy? No.

The following illustration shows a business plan as part of a process. You can think about the good or bad of a plan as the plan itself, measuring its value by its contents. There are some qualities in a plan that makes it more likely to create results, and these are important. However, it is even better to see the plan as part of the whole process of results, because even a great plan is wasted if nobody follows it.

Planning is a Process, Not Just a Plan

A business plan will be hard to implement unless it is simple, specific, realistic and complete. Even if it is all these things, a good plan will need someone to follow up and check on it. The plan depends on the human elements around it, particularly the process of commitment and involvement, and the tracking and follow-up that comes afterward.

Successful implementation starts with a good plan. There are elements that will make a plan more likely to be successfully implemented. Some of the clues to implementation include:
1. Is the plan simple? Is it easy to understand and to act on? Does it communicate its contents easily and practically?
2. Is the plan specific? Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific date of completion, specific persons responsible and specific budgets?
3. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals.
4. Is the plan complete? Does it include all the necessary elements? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn’t cover the main bases.

Use of Business Plans
Too many people think of business plans as something you do to start a company, apply for a loan, or find investors. Yes, they are vital for those purposes, but there’s a lot more to it.

Preparing a business plan is an organized, logical way to look at all of the important aspects of a business. First, decide what you will use the plan for, such as to:
• Define and fix objectives, and programs to achieve those objectives.
• Create regular business review and course correction.
• Define a new business.
• Support a loan application.
• Define agreements between partners.
• Set a value on a business for sale or legal purposes.
• Evaluate a new product line, promotion, or expansion.

No Time to Plan? A Common Misconception
“Not enough time for a plan,” business people say. “I can’t plan. I’m too busy getting things done.” A business plan now can save time and stress later.

Too many businesses make business plans only when they have to. Unless a bank or investors want to look at a business plan, there isn’t likely to be a plan written. The busier you are, the more you need to plan. If you are always putting out fires, you should build fire breaks or a sprinkler system. You can lose the whole forest for too much attention to the individual trees.

Keys to Better Business Plans
• Use a business plan to set concrete goals, responsibilities, and deadlines to guide your business.
• A good business plan assigns tasks to people or departments and sets milestones and deadlines for tracking implementation.
• A practical business plan includes 10 parts implementation for every one part strategy.
• As part of the implementation of a business plan, it should provide a forum for regular review and course corrections.
• Good business plans are practical.

Business Plan “Don’ts”
• Don’t use a business plan to show how much you know about your business.
• Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists. Years ago, people were favorably impressed by long plans. Today, nobody is interested in a business plan more than 50 pages long.

Business plans are also called strategic plans, investment plans, expansion plans, operational plans, annual plans, internal plans, growth plans, product plans, feasibility plans, and many other names. These are all business plans.

In all these different varieties of business plan, the plan matches your specific situation. For example, if you’re developing a plan for internal use only, not for sending out to banks or investors, you may not need to include all the background details that you already know. Description of the management team is very important for investors, while financial history is most important for banks.

Some of these specific case differences lead to different types of plans:
• The most standard business plan is a start-up plan, which defines the steps for a new business. It covers standard topics including the company, product or service, market, forecasts, strategy, implementation milestones, management team, and financial analysis. The financial analysis includes projected sales, profit and loss, balance sheet, cash flow, and probably a few other tables. The plan starts with an executive summary and ends with appendices showing monthly projections for the first year.
• Internal plans are not intended for outside investors, banks, or other third parties. They might not include detailed description of company or management team. They may or may not include detailed financial projections that become forecasts and budgets. They may cover main points as bullet points in slides (such as PowerPoint slides) rather than detailed texts.
• An operations plan is normally an internal plan, and it might also be called an internal plan or an annual plan.
It would normally be more detailed on specific implementation milestones, dates, deadlines, and responsibilities of teams and managers.
• A strategic plan is usually also an internal plan, but it focuses more on high-level options and setting main priorities than on the detailed dates and specific responsibilities. Like most internal plans, it wouldn’t include descriptions of the company or the management team. It might also leave out some of the detailed financial projections. It might be more bullet points and slides than text.
• A growth plan or expansion plan or new product plan will sometimes focus on a specific area of business, or a subset of the business. These plans could be internal plans or not, depending on whether or not they are being linked to loan applications or new investment. For example, an expansion plan requiring new investment would include full company descriptions and background on the management team, as much as a start-up plan for investors. Loan applications will require this much detail as well. However, an internal plan, used to set the steps for growth or expansion funded internally, might skip these descriptions. It might not include detailed financial projections for the whole company, but it should at least include detailed forecasts of sales and expenses for the company.
• A feasibility plan is a very simple start-up plan that includes a summary, mission statement, keys to success, basic market analysis, and preliminary analysis of costs, pricing, and probable expenses. This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing.

Page count is not a good way to measure length. A 20-page plan with dense text and no graphics is much longer than a 35-page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections.

Measure a plan by readability and summarization. A good business plan should leave a reader a good general idea of its main contents even after only a quick skimming, browsing the main points, in 15 minutes. Format, headings, white space, and illustrations make a big difference. Summaries are very important. Main points should show up in a business plan as quickly as they do in a business presentation.

Unfortunately, many people still use page count as measurement. And in that context, some of the more practical, internal-use-only business plans can be only 5 or 10 pages long. Corporate business plans for large companies can run into hundreds of pages. The more standard start-up and expansion plans developed for showing outsiders normally run 20-40 pages of text easy to read, well-spaced text, formatted in bullets, illustrated by business charts and short financial tables plus financial details in appendices.

The right length of the plan depends on the nature and purpose of the plan. Will it include descriptions of the company and management team for outsiders to read? Does it need an executive summary good enough to stand alone? Does it include detailed research, plans, drawings, and blueprints? Is it worded to withstand legal scrutiny as part of an investment proposal? Form follows function.

Venture contests often limit a plan to 30 pages, sometimes 40, rarely 50; and that includes detailed financials in the appendices. Unfortunately the page limitation leads some contestants to very bad choices, as they cram content into dense typefaces and thick texts, making their plans worse, not better.

Palo Alto Software’s annual business plan contest has run four years now. Several hundred plans have entered that competition. Finalists have never had less than 20 pages or more than 50 pages. Most run 30-40 pages. These are all 20-30 pages of text, not counting useful graphic additions to show locations, designs, menus, etc., and not counting the appendices pages containing monthly financial projections, resumes of team leaders, etc. You’ll want to add some pages for the standard financials; usually that means appendices with monthly tables for sales, personnel, income statement, cash flow, and balance sheet. You also want to include the main annual numbers of those tables in the body of the plan.

Don’t ever shorten a plan by taking out useful graphics. Page count matters far less than readability. Use business charts to illustrate numbers so your projections are easier to absorb. Use photographs and drawings to show locations, products, sample menus, product pictures, and other illustrations as much as possible. However, don’t ever extra graphics like clip art, not directly relevant to the matter at hand, as if that would make a plan better.

While including the necessary items in a business plan is important, you also want to make sure you don’t commit any of the following common business plan mistakes:

Putting it off.
Too many businesses make business plans only when they have no choice in the matter. Unless the bank or the investors want a plan, there is no plan.
Don’t wait to write your plan until you think you’ll have enough time. “I can’t plan. I’m too busy getting things done,” business people say. The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.

Cash flow casualness.
Most people think in terms of profits instead of cash. When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained to think of business as sales minus costs and expenses, which equal profits. Unfortunately, we don’t spend the profits in a business. We spend cash. So understanding cash flow is critical. If you have only one table in your business plan, make it the cash flow table.

Idea inflation.
Don’t overestimate the importance of the idea. You don’t need a great idea to start a business; you need time, money, perseverance, and common sense. Few successful businesses are based entirely on new ideas. A new idea is harder to sell than an existing one, because people don’t understand a new idea and they are often unsure if it will work.
Plans don’t sell new business ideas to investors. People do. Investors invest in people, not ideas. The plan, though necessary, is only a way to present information.

Fear and dread.
Doing a business plan isn’t as hard as you might think. You don’t have to write a doctoral thesis or a novel. There are good books to help, many advisors among the Small Business Development Centers (SBDCs), business schools, and there is software available to help you (such as Business Plan Pro, and others).

Spongy, vague goals.
Leave out the vague and the meaningless babble of business phrases (such as ‘being the best’) because they are simply hype. Remember that the objective of a plan is its results, and for results, you need tracking and follow up. You need specific dates, management responsibilities, budgets, and milestones. Then you can follow up. No matter how well thought out or brilliantly presented, it means nothing unless it produces results.

One size fits all.
Tailor your plan to its real business purpose. Business plans can be different things: they are often just sales documents to sell an idea for a new business. They can also be detailed action plans, financial plans, marketing plans, and even personnel plans. They can be used to start a business, or just run a business better.

Diluted priorities.
Remember, strategy is focus. A priority list with 3-4 items is focus. A priority list with 20 items is certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.

Hockey-stick shaped growth projections.
Sales grow slowly at first, but then shoot up boldly with huge growth rates, as soon as ’something’ happens. Have projections that are conservative so you can defend them. When in doubt, be less optimistic.

The classics are seeking investment, applying for a loan. There are also the obvious communications with employees, partners, family members, consultants. And there is valuation, sometimes for tax purposes, sometimes for growth, divorce, estates.

Too many people think of business plans as something you do to start a company, apply for a loan, or find investors. Yes, they are vital for those purposes, but there’s a lot more to it. Preparing a business plan is an organized, logical way to look at all of the important aspects of a business.

First, decide what you will use the plan for, such as to:
• Define and fix objectives, and programs to achieve those objectives.
• Create regular business review and course correction.
• Define a new business.
• Support a loan application.
• Define agreements between partners.
• Set a value on a business for sale or legal purposes.
• Evaluate a new product line, promotion, or expansion.

Start your business plan with a quick assessment. Even for an ongoing business, take the time to step away from the business and look at the basics. Do your business numbers make sense? One of my business school professors used to refer to this process as finding out “is there a there there?”

Objectives
Objectives are business goals. Set your market share objectives, sales objectives, and profit objectives. Companies need to set objectives and plan to achieve them.

Make sure your objectives are concrete and measurable. Be specific, such as achieving a given level of sales or profits, a percentage of gross margin, a growth rate, or a market share. Don’t use generalities like “being the best” or “growing rapidly.”
For example, “being the best” or “maximize customer satisfaction” are not serious business plan objectives because they cannot really be measured. Much better objectives would set measurable goals, such as holding gross margin to 25 percent as a minimum, or selling more than $3 million, or achieving six percent profit on sales and 10 percent return on equity.

If less tangible goals are critical to a plan, find a way to measure them. For example, if image and awareness are vital, then plan for statistically valid surveys to measure the improvements in image and awareness. You can also set goals for market share, and purchase research to measure the actual share. Or, if you want to focus on customer satisfaction, plan for a survey to quantify satisfaction or specify numerical objectives regarding returns or complaints.

Mission Statement
Use the mission statement to define your business concept. A company mission statement should define underlying goals (such as making a profit) and objectives in broad strategic terms, including what market is served and what benefits are offered.
• What Business You Are In. Ask yourself what business you are in, and don’t narrow yourself down. One of the classic business examples is the railroads, which lost a chance to expand in the twentieth century because they misdefined themselves. They thought they were in the business of running trains on tracks. They didn’t understand they were in the business of transporting goods and people. When trucks and buses and highways grew, the railroads were left behind.
My company, Palo Alto Software, is not in the business of software development. It is in the business of helping people do business plans by themselves, providing business know-how through software and documentation. The broader definition helps us understand what we’re up to.

• Customer Satisfaction Leading experts in developing customer satisfaction look to a mission statement to define customer satisfaction goals. Developing customer care programs depends on spreading the idea and importance within a company. That should normally start with a statement included in your mission statement.

• Workplace Philosophy. Some mission statements also define internal goals, such as maintaining a creative work environment and building respect for diversity. Experts in employee relations look immediately to a mission statement for a definition of a company’s stand on some of these fundamental issues.

• Value-Based Marketing Experts developed the value-based marketing framework to help companies understand their business better. This framework starts with a business value proposition, which states what benefits a business offers, to whom, and at what relative price level.

For example:
o This automobile manufacturer offers reliable, safe automobiles for families at a relative price premium.
o This fast food restaurant offers quick and consistent lunches at a low price.

Keys to Success
Focusing on what I call “keys to success” is a good idea for getting a better view of the priorities in your business. Just about any business imaginable is going to depend a lot on three or four most important factors. In a retail business, for example, the classic joke is that the keys to success are “location, location, and location.” In truth, that might be location, convenient parking, and low prices. A computer store’s keys to success might be knowledgeable salespeople, major brands, and newspaper advertising.

Focus is very important, and the keys to success framework helps you develop focus. There is what I call a law of inverse focus. I can’t prove it with detailed research but I’ve seen it many times. Beyond three or four key items, the more items on a priority list, the less chance of implementation. Thinking about keys to success is a great way to focus on the main elements that make your business work.

Break-even Analysis
Next comes a simple Break-even Analysis table, as shown in the next illustration, where you estimate when your business will actually begin to make money. The Break-even Analysis table calculates a break-even point based on fixed costs, variable costs per unit of sales, and revenue per unit of sales.

Make the following three simple assumptions:
1. Average per-unit sales price (per-unit revenue): The price that you charge per unit. Take into account sales discounts and special offers. For non-unit based businesses, make the per-unit revenue $1 and enter your costs as a percent of a dollar.
2. Average per-unit cost: The incremental cost of each unit of sale. If you are using a Units-Based Sales Forecast table (for manufacturing and mixed business types), you can project unit costs from the Sales Forecast table. If you are using the basic Sales Forecast table for retail, service and distribution businesses, use a percentage estimate. For example, a retail store running a 50% margin would have a per-unit cost of .5, and a per-unit revenue of 1.
3. Monthly fixed costs: Technically, a break-even analysis defines fixed costs as costs that would continue even if you went broke. Instead, you may want to use your regular running fixed costs, including payroll and normal expenses. This will give you a better insight on financial realities.

This next illustration shows a Break-even chart. As sales increase, the profit line passes through the zero or break-even line at the break-even point. In the illustration the Break-even chart shows that the company needs to sell almost 1,200 units per month to break even.

This is a classic business chart that helps you consider your bottom-line financial realities. Can you sell enough to make your break-even volume? Of course, the break-even analysis depends on assumptions made for average per-unit revenue, average per-unit cost, and fixed costs, and these are rarely exact assumptions.

Market Analysis
Determine if there is a sufficient market to support your business. You don’t need to do major market research for this initial market analysis. You may want to, and even need to, do real research later on. For now, however, you want to get a good educated guess about how many potential customers you might have.
What you want at this point is a reality check. You’ve already developed a quick break-even analysis that ties your initial business numbers to your required sales. Now you’re going to look at how many customers you might have so you can think about the importance of breaking even.

Develop a basic Market Analysis table. This table gives you a simple list of market segments. Each segment is a group of customers. Define the groups according to what needs you supply, demographic characteristics, buying habits, preferences, or whatever other classification system works for your plan. Fill in the total potential customers estimated and the annual growth rate expected for each segment.

The following illustration shows a Market Analysis table. You can also use a Market Analysis chart as a visual guide to your market segments.

Pause for Reflection
Now it’s time to give your planning an objective appraisal. At this point, you’ve defined your business, your financial break-even point, and your total potential market. How does your business look from this viewpoint? Does it make sense? Can you make the sales you need to break even? Is the market big enough? Are your projections realistic? Can you bring together the keys to success?

Especially for potential start-up companies, a moment of reflection is critical. Many people dream of starting a business, but that dream turns into a nightmare if the new business isn’t successful. If you think you can make your break-even numbers work and you believe you have enough customers to make it, then go on to develop the plan. If not, either do more research and revise the idea, or give up and try something else.

Business advisors, experienced entrepreneurs, bankers, and investors generally agree that you should develop a business plan before you start a business. A plan can help you move forward, make decisions, and make your business successful. However, not all business plans are the same, not every business needs the same level of detail. You might develop a fairly simple plan first as you start a small business, and that might be enough for you. You can also start simple and then elaborate as you prepare to approach bankers or investors.

For a simple example, imagine a woman making jewelry at home and selling it at a local flea market on the weekend. A business plan could give her a chance to step back from the normal flow and look at ways to develop and improve the business. The planning process should help her understand her business. It should help her define what she wants from the business, understand what her customers want, and decide how to optimize her business on her own terms. She might benefit from developing a simple sales and expense forecast, maybe even a profit and loss, so she can plan how to use and develop her resources. She might not need to create detailed cash flow, balance sheet, and business ratios. A simple plan may be just what she needs to get going.
This first stage of a plan, that we call the Concept Kick-start, focuses only on a few starter elements. The Mission Statement, Keys to Success, Market Analysis, and Break-even Analysis give you a critical head start toward understanding your business.

However, not all start-ups are that simple. Many of them need product development, packaging, retail fittings and signage, office equipment, websites, and sometimes months or even years of payroll before the sales start. Unless you’re wealthy enough to finance these expenditures on your own, then you’ll need to deal with bank loans or investors or both; and for that you’ll need a more extensive business plan. Start-up company or not, the plan has to meet expectations.

One suggestion for getting started is to develop your plan in stages that meet your real business needs. A few key text topics might be enough to discuss the plan with potential partners and team members, as a first phase. You may well want to add a basic sales and expense forecast, leading to profit and loss, as next phase. Adding business numbers helps you predict business flow and match spending to income.
This might be an intermediate plan, incorporating a more extensive outline and business analysis:
Google Docs & Spreadsheets

Ultimately, the choice of plan isn’t based as much on the stage of business as it is on the type of business, financing requirements, and business objective. Here are some important indicators of the level of plan you’ll need, even as a start-up:
• Some of the simpler businesses keep a plan in the head of the owner, but every business has a plan. Even a one-person business can benefit from creating a plan document with ideas written down, because the process of producing a plan is useful and valuable.

• As soon as a second person is involved, the need for planning multiplies. The plan is critical for communicating values, goals, strategies, and detailed implementation.

• As soon as anybody outside the company is involved, then you have to provide more information. When a plan is for internal use only, you may not need to describe company history and product features, for example. Stick to the topics that add value, that make you think, that help support decisions. When you involve people outside the company, then you need to provide more background information as part of the plan.

• For discussion purposes, text is enough to get a plan started. Try describing your mission, objective, keys to success, target market, competitive advantage, and basic strategies. How well does this cover your business idea?

• Can you live without a sales and expense forecast? Sometimes the one-person business keeps numbers in its (the owner’s) head. However, it’s much easier to use some tools that can put the numbers in front of you, and add and subtract them automatically. That’s where a plan helps.

• Do you really know your market? A good market analysis can help you see opportunities that might not otherwise be obvious. Understand why people buy from you. What are the needs being served? How many people are out there, as potential customers?

• Do you manage significant amounts of inventory? That makes your cash management more complicated, and usually requires a more sophisticated plan. You need to buy inventory before you sell it.

• Do you sell on credit? If you are a business selling to businesses, then you probably do have to sell on credit, and that normally means you have to manage money owed to you by your customers, called accounts receivable. Making the sale is no longer the same thing as getting the money. That usually requires a more sophisticated plan.

• Do you do your taxes on a cash basis, or accrual basis? If you don’t know, and you are a very small (one person, maybe 2-3 people) business, then you’re likely to be on a cash basis. That makes your planning easier. However, most businesses big enough to work with a CPA and have separate tax statements use accrual accounting because they want to deduct expenses as they are incurred, even if they aren’t fully paid for. By the time you are using accrual accounting, you’ll probably need more sophisticated cash flow tools, and a more extensive business plan.

• As you approach banks and other lending institutions, expect to provide more detail on personal net worth, collateral, and your business’ financial position. Some banks will accept a very superficial business plan as long as the collateral looks good. Others will demand to see detailed monthly projections. No bank can lend money on a business plan alone; that would be against banking law. But a good bank wants to see a good plan.

• If you’re looking for venture investment, take a good look at your plan. Professional investors will expect your plan to provide proof, not just promises. They’ll want to see market data, competitive advantage, and management track records. They’ll want to see robust and comprehensive financial projections. True, you’ll hear stories about investors backing new companies without a plan, but those are the exceptions, not the rule.

So, however you cut it, your business plan is very important, even at the early start-up stage, and even if you can keep it in your head. Before you purchase business stationery, telephones, or rent a location, you should do a business plan.

Basic Company Information
A standard business plan outline includes a chapter topic on your company. You may not need to include this chapter if you are writing an internal plan. However, any outsiders reading your plan will want to know about your company before they read about products, markets, and the rest of the story.

Summary Paragraph
Start the chapter with a good summary paragraph that you can use as part of a summary memo or a loan application support document. Include the essential details, such as the name of the company, its legal establishment, how long it’s been in existence, and what it sells to what markets.

Legal Entity and Ownership
In this paragraph, describe the ownership and legal establishment of the company. This is mainly specifying whether your company is a corporation, partnership, sole proprietorship, or some other kind of legal entity, such as a limited liability partnership. You should also explain who owns the company, and, if there is more than one owner, in what proportion.

If your business is a corporation, specify whether it is a C (the more standard type) or an S (more suitable for small business without many different owners) corporation. Also, of course, specify whether it is privately owned or publicly traded.
Many smaller businesses, especially service businesses, are sole proprietor businesses. Some are legal partnerships. The protection of incorporating is important, but sometimes the extra legal costs and hassles of turning in corporate tax forms with double-entry bookkeeping are not worth it. Professional service businesses, such as accounting or legal or consulting firms, may be partnerships, although that mode of establishment is less common these days. If you’re in doubt about how to establish a start-up company, consult a business attorney.

Locations and Facilities
Briefly describe offices and locations of your company, the nature and function of each, square footage, lease arrangements, etc.

If you are a service business, you probably don’t have manufacturing plants anywhere, but you might have Internet services, office facilities, and telephone systems that are relevant to providing service. It is conceivable that your Internet connection, as one hypothetical case, might be critical to your business.

If you’re a retail store, then your location is probably a critical factor, so explain the location, traffic patterns, parking facilities, and possibly customer demographics as they relate to the specific location (your Market Analysis goes elsewhere, but if your shopping center location draws a particular kind of customer, note that here).

If you are manufacturing, then you may have different facilities for production, assembly, and various offices. You may have manufacturing and assembly equipment, packing equipment, docks, and other facilities.

Depending on the nature of your plan, its function and purpose, you may want to include more detail about facilities as appendices attached to your plan.
For example, if your business plan is intended to help sell your company to new owners, and you feel that part of the value is the facilities and locations, then you should include all the detail you can. If you are describing a manufacturing business for bankers or investors, or anybody else trying to value your business, make sure you provide a complete list and all necessary detail about capital equipment, land, and building facilities. This kind of information can make a major difference to the value of your business.

On the other hand, if your business plan is for internal use in a small company with a single office, then this topic might be irrelevant.

This part of the plan is mainly description. Sometimes it will include tables that provide more details, such as a bill of materials or detailed price lists. More frequently, however, this section is mainly text. It normally appears in the plan, after the company description, but before the market analysis.

Detailed Description
List and describe the products or services you sell. For each business offering, cover the main points, including what the product or service is, how much it costs, what sorts of customers make purchases, and why. What customer need does each product or service line fill? You might not want or need to include every product or service in the list, but at least consider the main sales lines.

It is always a good idea to think in terms of customer needs and customer benefits as you define your product offerings, rather than thinking of your side of the equation–how much the product or service costs, and how you deliver it to the customer.

As you list and describe your sales lines, you may run into one of the serendipitous benefits of good business planning, which is generating new ideas. Describe your product offerings in terms of customer types and customer needs, and you’ll often discover new needs and new kinds of customers to cover. This is the way ideas are generated.

Competitive Comparison
Use this topic for a general comparison of your offering as one of several choices a potential buyer can make. Use a separate topic, in the market analysis section, for detailed comparison of strengths and weaknesses of your specific competitors.

You should discuss how your product lines and retail offering compare in general to the others. For example, your outdoor store might offer better ski equipment than others, or perhaps it is located next to the slopes and caters to rental needs. Your jewelry store might be mid-range in price but well known for proficiency in appraisals, remounts, and renovation. Your hobby shop has by far the largest selection of model trains and airplanes.

In other words, in this topic you want to discuss how you are positioned in the market. Why do people buy from your business instead of from others in the same market? What do you offer, at what price, to whom, and how does your mix compare to others? Think about specific kinds of benefits, features, and market groups, comparing where you think you can show the difference. Describe the important competitive features of your products and/or services. Do you sell better features, better price, better quality, better service, or some other factor?

Sourcing and Fulfillment
Explain your product sourcing and the cost of fulfilling your service. Manufacturers and assemblers should present spreadsheet output showing standard costs and overhead. Distributors should present discount and margin structures. Service companies should present costs of fulfilling service obligations.

For example, sourcing is extremely important to a manufacturing company. Your vendors determine your standard costs and hold the key to continued operation. Analyze your standard costs and the materials or services you purchase as part of your manufacturing operation. Look for strengths and weaknesses.

Manufacturing companies want to have ample information about resource planning and sourcing of vital materials, especially if you are preparing a plan for outsiders, such as bankers or investors, or for business valuation. In this case, you may have additional documentation you can copy and attach as appendices, perhaps even contracts with important suppliers, standard cost breakdowns, bills of materials, and other information.

Where materials are particularly vital to your manufacturing, you might discuss whether second sources or alternative sources are available, and whether or not you use them or maintain relationships with them. This is also a good time to look at your sourcing strategy, and whether or not you can improve your business by improving your product sourcing.

But sourcing is not just for product-based companies. For example, a professional service company, such as an accounting practice, medical practice, law practice, management consulting firm, or graphic design firm, is normally going to provide the service by employing professionals. In this case, the cost is mainly the salaries of those professionals. Other service businesses are quite different. The travel agency provides a service through a combination of knowledge, rights, and infrastructure, including computer systems and databases. The Internet provider or telephone company provides a service by owning and maintaining a network of communications infrastructure.

A restaurant is a service business whose costs are a combination of salaries (for kitchen and table waiting) and food costs.

Technology
Once technology changed lives only when the next wave of invaders swept across the Mesopotamian farmlands. Now technology can change our lives as we read the morning paper. Explain how technology affects your business, the products you sell, the means you use to sell them, and the needs of the customers you serve.
In some cases this might be a change in scanning technology, retail point-of-sale systems, or even video displays. In others, technology changes the nature of the goods or services you sell, such as cellular phones or DVD videos that didn’t even exist a few years ago. Do you want to include the Internet? Will a Web site change the way you do business?

Sometimes, technology can be vital to a service company, such as the case of the Internet provider that uses wireless connections as a competitive edge, or the local company that offers conference rooms for video conferencing. An accounting practice might gain a competitive advantage from proprietary software or wide-area network connections to its clients. A medical laboratory might depend completely on certain expensive technologies for medical diagnostics. A travel agency might depend on its connection to an airline reservation system.

Technology can be critical to a manufacturing business in at least two ways: first, the technology involved in assembly or manufacturing, such as in the manufacture of computer chips; and second, the technology incorporated in your product, such as proprietary technology that enhances the value of the product. In either case, technology can be a critical competitive edge. If you are writing a plan for outsiders, then you need to describe the technology and how well or thoroughly you have the technology protected in your business, through contracts, patents, and other protection.

Technology might be a negative factor, something to be included in a plan because a threat should be dealt with. For example, that same travel agency that depends on a computerized reservation system might also note growing competition from Internet reservations systems available to consumers who prefer to buy direct.
Not all businesses depend on technology. Technology might also be irrelevant for your business. If so, you can delete this topic if it doesn’t seem important.
Future Products

Now you want to present your outlook for future products or services. Do you have a long-term product strategy? How are products developed? Is there a relationship between market segments, market demand, market needs, and product development?
Here again, what you include depends on the nature of your plan. In some cases future products are the most important point for investors looking to buy into your company’s future. On the other hand, a bank is not going to lend you money for product development or hopes for future products; so in a plan accompanying a Loan Application, there would probably be much less stress on this point.

You may also need to deal with the issue of confidentiality. When a business plan includes sensitive information on future products, then it should be carefully monitored, with good documentation of who receives copies of the plan. Recipients might reasonably be asked to sign non-disclosure statements and those statements should be kept on file.

Sales Literature
It is generally a good idea to include specific pieces of sales literature and collateral as attachments or appendices to your plan. Examples would be copies of advertisements, brochures, direct mail pieces, catalogs, and technical specifications. When a plan is presented to someone outside the company, sales literature is a practical way to both explain your services and present the look and feel of the company.

If it is relevant for your business, you should also use this topic to discuss your present situation regarding company literature and your future plans. Is your sales literature a good match to your services and the image your company wants to present? How is it designed and produced? Could you improve it significantly, or cut the cost, or add additional benefits?
Depending on the purpose of your plan, you should provide good, practical information on the products or services you sell. Give your plan readers what they will need to evaluate the plan. Make sure they understand the need you serve, how well you satisfy that need, and why your customers buy from you instead of somebody else. Ideally, the descriptions in this chapter make your sales forecast seem realistic and even conservative.

Summarize Your Management Chapter
The personnel management section of your plan outline will normally include an explanation of your management team, management philosophy, backgrounds, organization and functions, plus at least one table that covers your estimated personnel costs. The management chapter starts, like the other chapters, with a good summary. You may want to use that summary as part of a summary memo or loan application document, so cover the main points. Consider what you’d say about your management if you only had one or two paragraphs to say it.

Make sure you cover the basic information first. That would include how many employees the company has, how many managers, and how many of the managers are founders. Is your organizational structure sound, with job descriptions and logical responsibilities for all the key members? Is your team complete, or are there gaps still to be filled? Particularly with start-up companies, you may not have the complete team as you write the plan. In that case, be sure to point out the gaps and weaknesses and how you intend to fill them.

Explain Your Organizational Structure
The organizational structure of a company is what you frequently see as an organizational chart, also known as an “org chart.” If you have access to a graphic of an organizational chart (from a drawing program, or one of the specialized organizational charting software packages available), that works really well at this point. If not, you can just use the text to describe the organizational structure in words, without a chart.

Make sure you explain how job descriptions work and how the main company functions are divided up. Are your organizational lines drawn clearly? Is the authority properly distributed? Do you have jobs that include responsibility without authority? Do your resources seem in line with your organizational needs?

List Team Members and Their Backgrounds
List the most important members of the management team. Include summaries of their backgrounds and experience, using them like brief resumes. Describe their functions with the company. Resumes should be appended to the plan.

Discuss Your Management Gaps
You may have obvious gaps in the management, especially in start-up companies, but even in ongoing companies. For example, the manufacturing company without a production manager has some explaining to do, and the computer company without service has some problems. It is far better to define and identify a weakness than to pretend it doesn’t exist. Specify where the team is weak because of gaps in coverage of key management functions. How will these weaknesses be corrected? How will the more important gaps be filled?

Other Management Team Considerations
Applicability depends on your company. Some questions that should be answered include: Do any managers or employees have “noncompete” agreements with competitors? Who is on your board of directors? What do the members contribute to the business? Who are your major stockholders? What is their role in management?

Develop Your Personnel Costs
At this point you should normally include a personnel table to project personnel costs, including direct compensation and indirect costs. The indirect costs include vacation pay, sick pay, insurance benefits, education, and of course, payroll taxes and some other costs. There are different terms for all of this, but my favorite is “personnel burden,” which is a cost over and above the direct wages and salaries.

Special Treatment for Home Offices
If you are working as a sole proprietor in a home office, you should still include your own compensation as part of your business plan. What you pay yourself should be added into the profit and loss as an expense. However, in this case you don’t really need to include payroll burden, because these additional expenses are irrelevant until you include additional employees.

Two Standard Personnel Variations
A good personnel plan varies according to your business and business plan needs. You may want a simple list of names, titles, or groups, each of which is assigned a monthly cost. This model is shown in the next illustration.

Standard Personnel Plan

The standard personnel plan is a simple list of names, titles, or categories. The sum transfers into your profit and loss statement. This illustration shows the last three months and first two years of a sample plan.

The simpler model totals all payroll only. It is perfectly appropriate for a lot of small businesses. You can use each of the lines in the table to describe specific individuals, or groups and departments. When you have the list complete, just add up the totals for personnel costs in your profit and loss. Multiply that total times your burden rate—say 15 or 20 percent—to calculate your personnel burden. The burden goes into the profit and loss as a separate line.

The next illustration shows the more detailed personnel plan that divides the rows into categories, such as sales and marketing, general and administrative, and so forth. The more detailed model shown here totals the planned payroll for each of the four departments, and then calculates total payroll.

Detailed Personnel Plan

The more detailed personnel plan shown here divides personnel expenditures into classifications including production, sales and marketing, general and administrative, and other.

As with the simple personnel table, you also want to calculate a payroll burden as a percentage of the total. Make sure to include the personnel burden assumption in your list of general assumptions.

The payroll assumptions in this model will also be used for the other financial projections. The Profit and Loss (also called income statement) will use personnel plan numbers.

A market forecast is a core component of a market analysis. It projects the future numbers, characteristics, and trends in your target market. A standard analysis shows the projected number of potential customers divided into segments.
This example of a simple market forecast defines two target market segments and projects the potential customers in each of those segments by years, for five years.

Market Size Forecast

In the market forecast, the example numbers indicate that there are 25,000 home offices included in the market, and that number is growing at an estimated five percent per year. There are also 10,000 small businesses in the area, and that number is growing at five percent per year.

These numbers are estimates. Nobody really knows, but we all make educated guesses. The developers of the plan researched the market as well as they could and then estimated populations of target users in their area and the annual growth rates for each.

You can use your market forecast numbers to draw a chart of projected market growth, like the one shown here below. It offers a visual view of the market forecast.

Market Value
Normally you would also look at market value, not just market size. For example, although the high-end home segment is 2.5 times larger than the small business segment as measured by number of customers, the small business customer spends almost four times as much as the home office customer. Therefore, the small business market is a more important market in terms of dollar value.

The important numbers in this table are the average purchase per customer and the market value.
• Average purchase per customer is an educated guess based on experience. Sales managers got together to make the estimate. Although they would have liked some external source of information to use for this, there was none available. Notice that the home office customer tends to purchase much less overall than the small business customer.
• The market value is simple mathematics. Multiply the number of potential customers in the market by the average purchase per customer. In this case they took the average number of customers in each segment over the five-year forecast period, and multiplied that by the average purchase per customer, to calculate the market value.

The other items in this table are subjective qualities that help with marketing. The planners assign these points to people charged with preparing marketing materials.

Reality Checks
A market forecast should always be subject to a reality check. When you think you have a forecast, you need to find a way to check it for reality. In this case if the total market is worth some estimate, you could estimate sales of all the competitors and see if the two numbers relate to each other. In an international market, you might check production and import and export figures to see whether your estimates for annual shipments appear to be in the same general range as published figures. You might check with vendors who sold products to this market in some given year to see whether their results check with your forecast. You might look for macro-economic data to confirm the relative size of this market compared to other markets with similar characteristics.

Review Target Focus
The market analysis should lead to developing strategic market focus. That means selecting the key target markets. This is the critical foundation of strategy.
We talk about it as segmentation and positioning. Under normal circumstances, no company will attempt to address all the segments in a market. As you select target segments, think about the inherent market differences, keys to success, competitive advantage, and strengths and weaknesses of your company. You want to focus on the best market, but the best one is not necessarily the largest one or the one with the highest growth. It will be the one that matches your own company profile.

Expert opinions may vary, but in general there are some standard analyses that a business plan ought to have, regardless of specifics. We’ll be looking at each of these in detail later on in this book, but let’s discuss here what probably ought to be included in a business plan.

• Cash flow is the most important. Businesses run on cash. No business plan is complete without a cash flow plan.

• Profit and loss, incorporating sales, cost of sales, operating expenses, and profits. This of course is also a pro-forma income statement. In most cases it should show sales less cost of sales as gross margin, and gross margin less operating expenses as profit before interest and taxes (also called gross profit, and contribution to overhead). Normally there is also a projection of interest, taxes, and net profits.

• Pro-forma balance sheet: Aside from cash and income, there is the balance of assets, liabilities, and capital.

• Sales forecast: The form may vary to suit the business, but it is hard to imagine a plan without a sales forecast. Some plans forecast in excruciating detail, some summarize, but the forecast should be there. In the simplest of plans, the sales forecast might be a single line in the pro-forma income statement.

• Personnel plan: Personnel costs are so intimately related to fixed costs that they should often be set aside and discussed. In some simple plans, they too, like the sales forecast, can be just a line or two in the income statement.

• Business ratios: The numbers are there, when there is pro-forma income, cash, and balance sheet, so the ratios can be calculated. This isn’t as necessary for an internal plan as for one for bankers and investors, but some key ratios are almost always a good idea. They should probably include some profitability ratios like gross margin, return on sales, return on assets, and return on investment; plus some liquidity ratios such as debt to equity, current ratio, and working capital. You already know which ratios you like to use, and how to calculate them. A banker will have a similar view.

• Break-even analysis: Most of the break-even analyses included with business plans have little value—more on that later—but most bankers and analysts like to see them.

• Market forecast: Aside from the sales forecast, which is essential, a market forecast is also a good idea. How many potential customers are there? How does market growth stand to impact this business?

Developing your sales forecast isn’t as hard as most people think. Think of your sales forecast as an educated guess. Forecasting takes good working knowledge of your business, which is much more important than advanced degrees or complex mathematics. It is much more art than science.

Whether you have business training or not, don’t think you aren’t qualified to forecast. If you can run a business, then you can forecast its sales. Most people can guess their own business’ sales better than any expert device, statistical analysis, or mathematical routine. Experience counts more than any other factor.
Break your sales down into manageable parts, and then forecast the parts. Guess your sales by line of sales, month by month, then add up the sales lines and add up the months.

The illustration gives you an example of a simple sales forecast that includes simple price and cost forecasts which are used to calculate projected sales and direct cost of sales and estimate total dollar value for each category of sales.

A Simple Sales Forecast

Use Text to Explain the Forecast and Related Plans and Background
Although the charts and tables are great, you still need to explain them. A complete business plan should normally include some detailed text discussion of your sales forecast, sales strategy, sales programs, and related information. Ideally, you use the text, tables, and charts in your plan to provide some visual variety and ease of use. Put the tables and charts near the text covering the related topics.

In my standard business plan text outline, the discussion of sales goes into Chapter 5.0, Strategy and Implementation. You can change that to fit whichever logic and structure you use. In practical terms, you’ll probably prepare these text topics as separate items, to be gathered into the plan as it is finished.

Sales Strategy
Somewhere near the sales forecast you should describe your sales strategy. Sales strategies deal with how and when to close sales prospects, how to compensate sales people, how to optimize order processing and database management, how to maneuver price, delivery, and conditions.

How do you sell? Do you sell through retail, wholesale, discount, mail order, phone order? Do you maintain a sales force? How are sales people trained, and how are they compensated? Don’t confuse sales strategy with your marketing strategy, which goes elsewhere. Sales should close the deals that marketing opens.

To help differentiate between marketing strategy and sales strategy, think of marketing as the broader effort of generating sales leads on a large scale, and sales as the efforts to bring those sales leads into the system as individual sales transactions. Marketing might affect image and awareness and propensity to buy, while sales involves getting the order.

Forecast Details
Your business plan text should summarize and highlight the numbers you have entered in the Sales Forecast table. Make sure you discuss important assumptions in enough detail, and that you explain the background sufficiently. Try to anticipate the questions your readers will ask. Include whatever information you think will be relevant, that your readers will need.

Sales Programs
Details are critical to implementation. Use this topic to list the specific information related to sales programs in your milestones table, with the specific persons responsible, deadlines, and budgets. How is this strategy to be implemented? Do you have concrete and specific plans? How will implementation be measured?

Business plans are about results, and generating results depends in part on how specific you are in the plan. For anything related to sales that is supposed to happen, include it here and list the person responsible, dates required, and budgets. All of that will make your business plan more real.

How Many Years?
I believe a business plan should normally project sales by month for the next 12 months, and annual sales for the following three years. This doesn’t mean businesses shouldn’t plan for a longer term than just three years, not by any means. It does mean, however, that the detail of monthly forecasts doesn’t pay off beyond a year, except in special cases. It also means that the detail in the yearly forecasts probably doesn’t make sense beyond three years. It does mean, of course, that you still plan your business for five, 10, and even 15-year time frames; just don’t do it within the detailed context of business plan financials.

This is a summary of the main highlights of your plan. Even though the topic appears first in the printed document, most business plan developers leave it until the end. This summary is the doorway to the rest of the plan. Get it right or your target readers will go no further. As a general rule, for a standard plan, the first paragraph should include:
• Business name
• Business location
• What product or service you sell
• Purpose of the plan

Another paragraph should highlight important points, such as projected sales and profits, unit sales, profitability and keys to success. Include the news you don’t want anyone to miss. This is a good place to put a Highlights Chart, a bar chart which shows sales, gross margin, and profits before interest and taxes for the next three years. Normally you should mention those numbers in the text.

An internal plan, such as an operations plan, annual plan, or strategic plan, doesn’t have to be as formal with its executive summary. Make the purpose of the plan clear, and make sure the highlights are covered, but you don’t necessarily need to repeat the location, product/service description, or other details.

Never waste words in a summary.
If you’re looking for investment, say so in your executive summary, and specify the investment amount required and the percent of equity ownership offered in return. You should probably also add some highlights of your management team and you competitive edge.

If you’re looking for a loan, say so in the executive summary, and specify the amount required. Leave loan details out of the summary.

Experts differ on how long an executive summary should be. Some insist that it takes just a page or two; others recommend a more detailed summary, taking as much as 10 pages, covering enough information to substitute for the plan itself.
Don’t confuse an executive summary with the summary memo. The executive summary is the first chapter in a business plan. A summary memo is a separate document, normally only 5-10 pages at most, which is used to substitute for the plan with people who aren’t ready to see the whole plan.

Sample plans are useful as examples, and of course you can build an effective business plan for your business without a sample plan that exactly matches. Even if we had a business plan that was very similar to your company (and we sometimes do), you would still have a different summary, a different company description, a different list of products, different strategy, different management team, and different financials. A sample plan is useful as an example, not for the information it contains.

Finding a pre-written plan for your business just doesn’t happen, and furthermore, it shouldn’t happen; it wouldn’t be good for any real business situation. The process of developing a plan is far more valuable than just having some pre-written plan you can use instead. You will learn more about your business and have a significantly greater chance of success if you write your own plan.

So don’t sweat having an exact match. Find something similar. A computer store can be a valuable example for an auto dealer because it has products and services, and deals with a local market instead of a national market. A bed and breakfast can be a good example for a motel, because both sell rooms for the night, and both have travelers as a market. A retail jewelry store can be a good example for a shoe store, because both depend on location, local markets, and buying things that they sell to their customers. And any sample business plan can give you a good idea of what’s in a plan, what’s covered, and how it looks.

Sample plan or not, our software, Business Plan Pro, starts a new plan by asking you simple questions about your business and customizes your plan to match. It customizes outline topics, tables, and charts, depending on whether you are retail, service, manufacturer, etc., whether you are a home office, an ongoing or a start-up company, etc. We haven’t yet heard of a business that couldn’t build a business plan with Business Plan Pro.

We do have more than 500 sample business plans included with Business Plan Pro, and more than five dozen plans posted at www.bplans.com as free sample business plans, so you can read them for free online.

The 500+ Sample plans included with Business Plan Pro are all available for use within Business Plan Pro, as starting points for your own plan, with text and financials available to you within the program. The list includes all of the free plans on bplans.com. However, we don’t sell those separately; they are available as part of the purchase of Business Plan Pro. If we don’t have the exact one you want, don’t sweat it, just develop your own plan. That’s what you’d end up doing anyhow, even if we did have an exact match. Every business is unique, so every business plan is unique.

There is a reason we don’t sell sample business plans. We provide the sample plans not for the business-specific information in them, but to give you an idea of what a finished business plan looks like. Most of them are real plans for real companies, with names disguised. Some were developed as sample plans.

Frankly, one of the things we intended when we decided to include sample business plans in Business Plan Pro was to prove that you can do a business plan; it isn’t that hard a task. We didn’t think when we decided to post the plans that people should take them as recipes for starting a business. They are just examples.

Tim Berry
President, Palo Alto Software

A common technique used to write a business plan is to use a business plan template, example business plan, or a business plan outline. You may see these terms as you browse the Web, but what do they mean?

Business Plan Template
A “business plan template” is a term used to describe a business plan outline that possibly has some sort of “fill in the blank” system to help you create your own plan. Using a “fill in the blank” approach to creating a business plan is not a serious way to write a plan, and it will not help you succeed in planning your business or securing financing.

“Business plan template” also is used to describe a sample business plan or general business plan outline.

Example Business Plan
An “example business plan” is another term that describes a sample business plan. A sample business plan is a full business plan that is either the plan of a real business or based on a real business. It shows you the actual text, financials, and charts for the business.

We have 60 sample business plans here on Bplans.com for you to view, and over 400 sample business plans contained in Business Plan Pro that can be viewed and edited for your own plan.

Business Plan Outline
Another term you’ll often hear is “business plan outline.” This term is used to refer to the basic structure of a business plan. While you can find some generic business plan outlines in books or on the Web, an outline should change to fit the type of business you’re involved in. For example, the business plan outline for a restaurant should be different from the business plan outline for a day care. For this reason, we don’t recommend using generic business plan outlines.

Business Plan Pro contains an EasyPlan Wizard that asks you questions when you first start writing your plan. As you answer the questions, the Wizard will create the correct business plan outline that you need for your specific business. It’s the fastest and easiest way to create the correct business plan outline to use for your plan.

One of the hardest things for people to write in a business plan is the mission statement. Mission statements can tell a lot about your business, so it’s important to take time, look at some mission statement examples, and put effort into writing a good one.

What is a Mission Statement?
You should think of a mission statement as a cross between a slogan and an executive summary.

Just as slogans and executive summaries can be used in many ways so too can a mission statement. An effective mission statement should be able to tell your company story and ideals in less than 30 seconds.

How should I write a Mission Statement?
Here are some basic guidelines in writing a mission statement:
• A mission statement should say who your company is, what you do, what you stand for and why you do it.
• An effective mission statement is best developed with input by all the members of an organization.
• The best mission statements tend to be 3-4 sentences long.
• Avoid saying how great you are, what great quality and what great service you provide.
• Examine other company’s mission statements, but make certain your statement is you and not some other company. That is why you should not copy a statement.
• Make sure you actually believe in your mission statement, if you don’t, it’s a lie, and your customers will soon realize it.

For more information on mission statements, see our sample mission statements below or use Business Plan Pro, which helps you write a mission statement as well as containing over 500 example mission statements.

The best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support is to show them a great business plan. Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen. Your business plan is like your calling card, it will get you in the door where you’ll have to convince investors and loan officers that you can put your plan into action.

Once you have raised the money to start or expand your business, your plan will serve as a road map for your business. It is not a static document that you write once and put away. You will reference it often, making sure you stay focused and on track, and meet milestones. It will change and develop as your business
evolves.

Do I need a business plan?

Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. If you are seeking funding from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and contains sound business reasoning.

If you are approaching a banker for a loan for a start-up business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.

Reasons for writing a business plan include:

• Support a loan application
• Raise equity funding
• Define and fix objectives and programs to achieve those objectives
• Create regular business review and course correction
• Define a new business
• Define agreements between partners
• Set a value on a business for sale or legal purposes
• Evaluate a new product line, promotion, or expansion

What’s in a business plan?

A business plan should prove that your business will generate enough revenue to cover your expenses and make a satisfactory return for bankers or investors.

• Executive Summary–features the highlights of your plan and sells your idea in two pages or less.
• Company Summary–a factual description of your company, ownership, and history.
• Products (or Services or both)–describes your products and/or services and how they stand out from competitive products and services.
• Market Analysis-provides a summary of your typical customers, competitive landscape, market size, and expected market growth.
• Strategy and Implementation-describes how you will sell your product, how you will put your plan into action, and establishes milestones.
• Management Summary-provides background on the management team, their experiences, and key accomplishments.
• Financial Plan-contains key financials including sales, cash flow, and profits.

What makes a successful business plan?

• A well thought out idea
• Clear and concise writing
• A clear and logical structure
• Illustrates management’s ability to make the business a
  success
• Shows profitability

How do you write a business plan?

Sitting down looking at a blank computer screen as you prepare to start your business plan can be daunting. You may want to look at some alternatives that will make the process a bit easier.

Hire a Professional
A professional consultant will create the business plan for you, but you still have to be prepared to think through your business and understand the underlying concepts in your business idea.
You will have to work closely with the consultant to ensure that he or she develops a good plan that accurately represents your business or business idea. You can find a list of business planning consultants at www.planconsultants.com.

Buy a Book
There are many good books on the market that will help you to understand what needs to go into a good business plan. You can read Timothy Berry’s “Hurdle: the Book on Business Planning”.

Use Business Planning Software
A good business planning software package will provide you with an outline for a well-developed, objective-based and professional business plan. Software packages will remove the problem of starting from scratch by structuring your plan for you. The software should ask you the right questions that will pull out the most important underlying concepts within your business idea.

Find out more about the leading software package on the market, Business Plan Pro.

A common problem people encounter when writing their business plan is finding information about their business industry and competitive companies. Fortunately, in recent years the Internet has made information gathering simple and easy, but sometimes the best information is found much closer to home, with real people, in real time.

Always take a look at other businesses similar to your own, as a very good first step. If you’re looking at starting a new business, you may well be starting one similar to one you already know. If you’re doing a plan for an existing business, you are even more likely to know the business well. Even so, you can still learn a lot by looking at other similar businesses.

• Look at existing, similar businesses.
• If you are planning a retail shoe store, for example, spend some time looking at existing retail shoe store businesses. Park across the street and count the customers that go into the store. Note how long they stay inside, and how many come out with boxes that look like purchased shoes. You can probably even count how many pairs of shoes each customer buys. Browse the store and look at prices. Look at several stores, including the discount shoe stores and department store shoe departments.
• Find a similar business in another place.
• Find a similar business far enough away that you won’t compete. For the shoe store example, you would identify shoe stores in similar towns in other states. Call the owner, explain your purpose truthfully, and ask about the business.
• Scan local newspapers for people selling a similar business.
• Contact the broker and ask for as much information as possible. If you are thinking of creating a shoe store and you find one for sale, you should consider yourself a prospective buyer. Maybe buying the existing store is the best thing. Even if you don’t buy, the information you gain will be very valuable. Why is the owner selling? Is there something wrong with the business? You can probably get detailed financial information.
• Always shop the competition.
• If you’re in the restaurant business, patronize your competition once a month, rotating through different restaurants. If you own a shoe store, shop your competition once a month, and visit different stores.

It takes a little hard work but by using the Internet and doing some research at local businesses, you should be able to gather all the information necessary for your business plan.

A business plan is not a one-time document, at least it shouldn’t be. Most businesses put together a business plan during their start-up phase to organize, attract partners and employees, and to try and get a loan or financial investment. This is a great use of a business plan, however far too often once the company has started up the plan isn’t touched again.

Ultimately, a business plan is about results, about making your business better. If you don’t think doing a business plan will improve your business, then don’t do one.

Planning for planning’s sake is a waste of time.

Where a plan is most likely to make your business better is by allowing you to:

1. Set priorities properly.
2. Track plan vs. actual results and make course corrections.
3. Plan and manage the critical numbers that aren’t intuitive: not just profit and loss, but the relationship to cash flow, balance sheet, and ratios.
4. Communicate your plan to others: partners, employees, lenders, and investors. You may have a great plan in your head, but as soon as you need to explain it to others, you need to write it down.

Reviewing Your Plan
So how do you maintain your business plan? We have to first establish that without regular review — monthly or at least quarterly review of your planned vs. actual results, with practical analysis of the reasons for variance — planning is likely to be a waste of time.

Real planning requires regular reviews just as much as navigation requires knowing where you are as well as where you were and where you wanted to go.

Every real plan needs to be full of specific dates, budgets, forecasts, and management responsibilities. People involved have to know there will be tracking and following up on specifics. Then that plan must be reviewed against results, and those reviews should produce course corrections and fine tuning.

Generally a business hopes for a consistent long-term strategy built on short-step incremental changes, not major revisions. Consistency is important to strategy, and the business should avoid the temptation to jump around from one strategy to another so quickly that no strategy is ever really implemented. Remember that even a mediocre strategy well and consistently implemented is much better than a brilliant strategy that wasn’t implemented.

However, businesses do come to crossroads demanding major revisions in their business plan. These are some signs that indicate its time to review your plan:

• Major changes in market situation. Look especially for changing market factors and changing market behavior.
  • Have your underlying business assumptions changed? As an example, the Internet has changed the business landscape so enormously that in some industries almost any plan that was developed without a view of the Internet may need revisions. That may not be true for a landscape architect or restaurant, but for a travel agent, graphic artist, or market researcher it’s obvious.
  • Do you have new competition? Have new competitors emerged, or existing competitors changed the business landscape so much that you need to review and revise?
  • Has the product or service picture changed? For example a new technology may have emerged, changing the market perception of what you sell. There may be new products or services offering related solutions to the same user needs you satisfy.

• Major changes in internal situation. The most obvious major changes are changes in ownership, which are frequently the result of changing partnerships, divorces, deaths, and investment. The company takes on new partners, or sells out to a larger company. On a more ominous note, the company suffers significant declines in sales, profits, and financial health.

Always keep the revision in perspective. While you do want to review and correct constantly, you don’t want to change a strategy unless you are sure it isn’t working or you see real changes in the underlying assumptions that formed the foundations of strategy.

Maintaining Your Plan
The purpose of maintaining your plan is to use business results to guide your future decisions. The plan itself has no value if it doesn’t help you improve business. That’s regardless of how good or bad, how brilliant the ideas, writing, or how elaborate the tables and charts. Its value is the decisions it leads to.
That means, of course, that to make a plan worth the effort of developing it, you’ll want to follow it up. Whether that’s every month or every quarter, you need to track results, analyze the difference between plan and actual results, and manage. Change things that need to be changed. Compare what you planned to what happened in reality.

Ask yourself the following questions:

• What went wrong, and how can we fix it?
• What went right, and how can we take advantage of it?
• What changes took place in the competitive landscape that could be updated in the plan?
• What changes took place affecting our market that could be updated in the plan?
• What changes took place internally in our organization that could be updated in the plan?

After you’ve answered these questions, update your plan accordingly, set new budgets and milestones, adjust your financials, and repeat the process with another review of your plan again next month or next quarter. Update your plan accordingly again, and keep repeating. You’ll find that maintaining your business plan gives you a better grasp on your business, your market, and everything else that happens with your company.

Often you may hear about what a business plan consists of. While including the necessary items is very important, you also want to make sure you don’t commit any of the following common business plan mistakes:

1. Putting it off.
Don’t wait to write a plan until you absolutely have to. Too many businesses make business plans only when they have no choice in the matter. Unless the bank or the investors want a plan, there is no plan.

Don’t wait to write your plan until you think you’ll have enough time. “There’s not enough time for a plan,” business people say. “I can’t plan. I’m too busy getting things done.” The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.

2. Cash flow casualness.
Cash flow is more important than sales, profits, or anything else in the business plan, but most people think in terms of profits instead of cash. When you and your friends imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained to think of business as sales minus costs and expenses, which equal profits. Unfortunately, we don’t spend the profits in a business. We spend cash. So understanding cash flow is critical. If you have only one table in your business plan, make it the cash flow table.

3. Idea inflation.
Plans don’t sell new business ideas to investors. People do. The plan, though necessary, is only a way to present information. Investors invest in people, not ideas.

Don’t overestimate the importance of the idea, particularly the importance of the uniqueness of the idea. You don’t need a great idea to start a business; you need time, money, perseverance, common sense, and so forth. Very few successful businesses are based entirely on new ideas. A new idea is much harder to sell than an existing one, because people don’t understand a new idea and they are often unsure if it will work.

4. Fear and dread.
Doing a business plan isn’t as hard as you think. You don’t have to write a doctoral thesis or a novel. There are good books to help, many advisors among the Small Business Development Centers (SBDCs), business schools, and there is software available to help you (such as Business Plan Pro, and others).

5. Spongy, vague goals.
Leave out the vague and the meaningless babble of business phrases (such as “being the best”) because they are simply hype. Remember that the objective of a plan is its results, and for results, you need tracking and follow up. You need specific dates, management responsibilities, budgets, and milestones. Then you can follow up. No matter how well thought out or brilliantly presented, it means nothing unless it produces results.

6. One size fits all
Tailor your business plan to its real business purpose. Business plans can be different things: they are often just sales documents to sell an idea for a new business. They can be detailed action plans, financial plans, marketing plans, and even personnel plans. They can be used to start a business, or just run a business better.

7. Diluted priorities.
Remember, strategy is focus. A priority list with 3-4 items is focus. A priority list with 20 items is something else, certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.

8. Hockey-stick shaped growth projections.
Have projections that are conservative so you can defend them. When in doubt, be less optimistic.

Business planning is about results. For every business plan, you need to make the contents of your plan match your purpose. Don’t accept a standard outline just because it’s there.

In the United States business market there is a standardization about business plans. You can find dozens of books on the subject, about as many Web sites, two or three serious software products, and courses in hundreds of business schools, night schools, and community colleges. Although there are many variations on the theme, a lot of it still falls into the same standard.

What is a Business Plan?
A business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities. Business existed long before computers, spreadsheets, and detailed projections. So did business plans.

Unfortunately, people think of business plans first for starting a new business or applying for business loans. But they are also vital for running a business, whether or not the business needs new loans or new investments. Businesses need plans to optimize growth and development according to priorities.

What’s a Start-up Plan?
A very simple start-up plan includes a summary, mission statement, keys to success, market analysis, and break-even analysis. This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing, but it is not enough to run a business with.

Is There a Standard Business Plan?
A normal business plan, one that follows the advice of business experts, includes a standard set of elements. Plan formats and outlines vary, of course, but generally, a plan will include standard components such as descriptions of the company, product or service, market, forecasts, management team, and financial analysis.

Your plan depends on your specific situation. For example, if you’re developing a plan for internal use only (not for sending out to banks or investors), you may not need to include all the background details that you already know. Description of the management team is very important for investors, while financial history is most important for banks. Make your plan match its purpose.

What’s Most Important in a Plan?

It depends on the case, but usually it’s the cash flow analysis and specific implementation details.

• Cash flow is both vital to a company and hard to follow. Cash is usually misunderstood as profits, and they are different. Profits don’t guarantee cash in the bank. Lots of profitable companies go under because of cash flow problems. It just isn’t intuitive.
• Implementation details are what make things happen. Your brilliant strategies and beautifully formatted planning documents are just theory unless you assign responsibilities, with dates and budgets, follow up with those responsible, and track results. Business plans are really about getting results and improving your company.

Can you Suggest a Standard Outline?

If you have the main components, the order doesn’t matter that much, but here’s the outline order we suggest in Business Plan Pro software:

1. Executive Summary: Write this last. It’s just a page or two of highlights.
2. Company Description: Legal establishment, history, start-up plans, etc.
3. Product or Service: Describe what you’re selling. Focus on customer benefits.
4. Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.
5. Strategy and Implementation: Be specific. Include management responsibilities with dates and budget.
6. Management Team: Include backgrounds of key members of the team, personnel strategy, and details.
7. Financial Plan: Include profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratios, etc.

We don’t recommend developing the plan in the same order you present it as a finished document. For example, although the Executive Summary comes as the first section of a business plan, we recommend writing it after everything else is done. It will appear first, but you write it last.

Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. If you are seeking funding from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and demonstrates sound business reasoning.

If you are approaching a banker for a loan for a start-up business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.

Reasons for writing a business plan include:

• Support a loan application
• Raise equity funding
• Define objectives and describe programs to achieve those objectives
• Create a regular business review and course correction process
• Define a new business
• Define agreements between partners
• Set a value on a business for sale or legal purposes
• Evaluate a new product line, promotion, or expansion

What’s in a business plan?
A business plan should prove that your business will generate enough revenue to cover your expenses, but a business plan may vary depending upon whom your audience is. If you are writing a plan for your colleagues and partners, for example, to expand an existing business, then the focus of that plan may be more operational than financial. Yes, you are going to show your partners how this expansion will mean more revenues, but they are going to want to know the nuts and bolts of how this new venture is going to be implemented.

If you are writing a business plan for a bank, your bank manager will want to see that your ideas are well thought out, but the most important aspect to him or her will be your financials. Are your assumptions realistic? And will the cash flow of the business be enough to ensure that you can make the monthly payments for the loan that you have requested? If your business is making $1,000 a month and your payments are $1,200 a month, the bank is likely to turn you away.

When considering an investment opportunity, most venture capitalists look at the obvious trends and market niches. Transcending the business elements, however, the most important factor in a decision to invest in a company is the quality of the people. In real estate, the three biggest criteria are “location, location and location.” The venture capital axiom is “people, people and people.” VCs will ask, how experienced are the people that are going to run this business? Do they have knowledge of the industry? Have they started successful ventures in the past?

What makes a successful business plan?

• Presents a well thought out idea
• Contains clear and concise writing
• Has a clear and logical structure
• Illustrates management’s ability to make the business a success
• Shows profitability

Bringing it all together…
Your business plan is like your calling card, it will get you in the door where you’ll have to convince investors and loan officers that you can put your plan into action. You want your calling card to look impressive, so make sure your business plan is printed out on good quality paper, you have checked the spelling and grammar and that your numbers add up. Anyone who sees errors while reading your plan will wonder whether you are going to make similar errors in running your business.

A great business plan is the best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support. Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen.

Every marketing plan has to fit the needs and situation. Even so, there are standard components you just can’t do without. A marketing plan should always have a situation analysis, marketing strategy, sales forecast, and expense budget.

• Situation Analysis: Normally this will include a market analysis, a SWOT analysis (strengths, weaknesses, opportunities, and threats), and a competitive analysis. The market analysis will include market forecast, segmentation, customer information, and market needs analysis.
• Marketing Strategy: This should include at least a mission statement, objectives, and focused strategy including market segment focus and product positioning.
• Sales Forecast: This would include enough detail to track sales month by month and follow up on plan-vs.-actual analysis. Normally a plan will also include specific sales by product, by region or market segment, by channels, by manager responsibilities, and other elements. The forecast alone is a bare minimum.
• Expense Budget: This ought to include enough detail to track expenses month by month and follow up on plan-vs.-actual analysis. Normally a plan will also include specific sales tactics, programs, management responsibilities, promotion, and other elements. The expense budget is a bare minimum.

Are They Enough?
These minimum requirements above are not the ideal, just the minimum. In most cases you’ll begin a marketing plan with an Executive Summary, and you’ll also follow those essentials just described with a review of organizational impact, risks and contingencies, and pending issues.
Include a Specific Action Plan

You should also remember that planning is about the results, not the plan itself. A marketing plan must be measured by the results it produces. The implementation of your plan is much more important than its brilliant ideas or massive market research. You can influence implementation by building a plan full of specific, measurable and concrete plans that can be tracked and followed up. Plan-vs.-actual analysis is critical to the eventual results, and you should build it into your plan.

Public Relations involves a variety of programs designed to maintain or enhance a company’s image and the products and services it offers. Successful implementation of an effective public relations strategy can be a critical component to a marketing plan.

A public relations (PR) strategy may play a key role in an organization’s promotional strategy. A planned approach to leveraging public relations opportunities can be just as important as advertising and sales promotions. Public relations is one of the most effective methods to communicate and relate to the market. It is powerful and, once things are in motion, it is the most cost effective of all promotional activities. In some cases, it is free.

The success of well executed PR plans can be seen through several organizations that have made it a central focus of their promotional strategy. Paul Newman’s Salad Dressing, The Body Shop, and Ben & Jerry’s Ice Cream have positioned their organizations through effective PR strategies. Intel, Sprint and Microsoft have leveraged public relations to introduce and promote new products and services.

Similar to the foundational goals of marketing, effective public relations seeks to communicate information to:

• Launch new products and services.
• Reposition a product or service.
• Create or increase interest in a product, service, or brand.
• Influence specific target groups.
• Defend products or services that have suffered from negative press or perception.
• Enhance the firm’s overall image.
• The result of an effective public relations strategy is to generate additional revenue through greater awareness and information for the products and services an organization offers.

Goals and Objectives
Good strategy begins with identifying your goals and stating your objectives. What are the goals and objectives behind your public relations strategy and can they be measured and quantified?

Each of these areas may reflect the goals your public relations campaign may seek to accomplish:

Press relations
Communicating news and information of interest about organizations in the most positive light.

Product and service promotion
Sponsoring various efforts to publicize specific products or services.

Firm communications
Promoting a better and more attractive understanding of the organization with internal and external communications.

Lobbying
Communicating with key individuals to positively influence legislation and regulation.

Internal feedback
Advising decision makers within the organization regarding the public’s perception and advising actions to be taken to change negative opinions.

“I made my first presentation to Fleet Bank with my Business Plan Pro business plan on Friday. The bank official said it was one of the most professional presentations he has ever seen. He said that he has loan requests for $5 million that aren’t as detailed and well presented. Thanks again.”
- Howard Lefkowitz
The Athlete’s Foot

“I just thought that you would like to know that our plan was successful and enabled us to raise $200,000 in financing – most with a major Canadian bank (not an easy sell, considering that I am an artist). Great software.”
- Janice Stanton
Janice Stanton Studios, Inc.

“Business Plan Pro helped me raise the equity for a $20 million start-up venture. If you’re writing a business plan, stop wasting your valuable time reinventing the wheel and try Business Plan Pro.”
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“I write business plans for a living. Your software is light-years more advanced than any other product out there and the service is super! Keep up the good work — you are setting a high benchmark!”
- Joe Redican

“No business plan software can match Business Plan Pro for its navigational ease, customizability and superb integration.”
- PC Magazine

“We tell our students and entrepreneurs both not to reinvent the wheel, use Business Plan Pro so they can concentrate on the content of their plan and not worry about the mechanics.”
- Jeffrey Bernel
Program Director
Gigot Center
University of Notre Dame

“Business Plan Pro makes banker’s lives easier and represents a fundamental platform which allows borrowers and bankers to derive better financial solutions. I wish every borrower took time to understand Business Plan Pro and how it helps them impress lenders.”
- Michael Menzies
President
Eaton Community Bank

“I cannot think of any other software product on the market that is as useful and beneficial to new business owners as Business Plan Pro.”
- Carolyn Cole
Vice President
Pacific Continental Bank

Marketing Plan Pro:

“I bought Marketing Plan Pro. I am a Marketing Consultant. A great product that has increased my productivity very significantly. Very highly recommended.”
Brendon Sinclair

“Thank you, thank you, thank you, You can count on me to highly recommend your services to whomever needs assistance on putting a marketing plan together. You really helped me out!”
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“Marketing Plan Pro is wonderful! It cut my work in half.”
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By Palo Alto Software, Inc.

The best way to show bankers, venture capitalists, and angel
investors that you are worthy of financial support is to show
them a great business plan. Make sure that your plan is clear,
focused and realistic. Then show them that you have the tools,
talent and team to make it happen. Your business plan is like
your calling card, it will get you in the door where you’ll have
to convince investors and loan officers that you can put your
plan into action.

Once you have raised the money to start or expand your business,
your plan will serve as a road map for your business. It is not
a static document that you write once and put away. You will
reference it often, making sure you stay focused and on track,
and meet milestones. It will change and develop as your business
evolves.

Do I need a business plan?

If you are approaching a banker for a loan for a start-up
business, your loan officer may suggest a Small Business
Administration (SBA) loan, which will require a business plan. If
you have an existing business and are approaching a bank for
capital to expand the business, they often will not require a
business plan, but they may look more favorably on your
application if you have one.

Reasons for writing a business plan include:

• Support a loan application
• Raise equity funding
• Define and fix objectives and programs to achieve those
  objectives
• Create regular business review and course correction
• Define a new business
• Define agreements between partners
• Set a value on a business for sale or legal purposes
• Evaluate a new product line, promotion, or expansion

What’s in a business plan?

1. Executive Summary–features the highlights of your plan and
   sells your idea in two pages or less.
2. Company Summary–a factual description of your company,
   ownership, and history.
3. Products (or Services or both)–describes your products
   and/or services and how they stand out from competitive products
   and services.
4. Market Analysis-provides a summary of your typical customers,
   competitive landscape, market size, and expected market
   growth.
5. Strategy and Implementation-describes how you will sell your
   product, how you will put your plan into action, and establishes
   milestones.
6. Management Summary-provides background on the management
   team, their experiences, and key accomplishments.
7. Financial Plan-contains key financials including sales, cash
   flow, and profits.

What makes a successful business plan?

• A well thought out idea
• Clear and concise writing
• A clear and logical structure
• Illustrates management’s ability to make the business a
  success
• Shows profitability

How do you write a business plan?

Hire a Professional

A professional consultant will create the business plan for you,
but you still have to be prepared to think through your business
and understand the underlying concepts in your business idea.
You will have to work closely with the consultant to ensure that
he or she develops a good plan that accurately represents your
business or business idea. You can find a list of business
planning consultants at www.planconsultants.com.

Buy a Book

There are many good books on the market that will help you to
understand what needs to go into a good business plan. You can
read Timothy Berry’s “Hurdle: the Book on Business Planning”.

Use Business Planning Software

A good business planning software package will provide you with
an outline for a well-developed, objective-based and professional
business plan. Software packages will remove the problem of
starting from scratch by structuring your plan for you. The
software should ask you the right questions that will pull out
the most important underlying concepts within your business idea.
Find out more about the leading software package on the market, Business Plan Pro.

Business planning resources

We believe that the process of value creation (read: entrepreneurship) through creativity & innovation, and a proper entrepreneurial management skills, shall lead Indonesian economic prospect in the future.

The great Peter Drucker have said; ‘What is ‘entrepreneurial’ in this business is not that it is new and still small (through growing rapidly). It is the realization that castings of this kind is distinct and separate; that demand for them has grown so big as to create a ‘market niche’; and that technology, especially computer technology now makes possible the conversion of art into a scientific process. (Drucker:1985;22).

Yes. With the help of technology, we expect to reach more entrepreneurs or anyone who interest of being one, through this website. As our business of entrepreneurship grows, we need to reach these people through pioneers, currently business leaders, business educators and young professionals. That means you!

Welcome to perencanaanbisnis.com, feel free to let us know what we can do for you…

“Business Plan Pro has built up an excellent wizard-driven interface that allows you to enter financial and other data. To really give you a helping hand, the program also includes a huge number of sample plans (more than 500) covering everything from running an airline to a yoga centre.”

Jason Whittaker
PC Advisor, November 22 2005
Note: This review refers to Business Plan Pro 2006.

BIOS Magazine
________________________________________

“Business Plan Pro 2006 covers pretty much every aspect a bank manager is going to ask when you go for that all-important business loan, from SWOT analysis, overheads, and budget forecasting…”

Christian Harris
biosmagazine.co.uk, October 2005
Note: This review refers to Business Plan Pro 2006.

Financial Statement Analysis: Forecasting & Budgeting Tools Add To Practice Value
________________________________________

Palo Alto Software (www.paloaltosoftware.com) produces several planning modules for financial management and business planning, including Business Plan Pro and Cash Compass, both of which are available in CPA versions. Business Plan Pro offers more than 400 sample business plans, thousands of industry profiles and Excel-style financial tables. It also offers financial spreadsheets that include sales forecast tables, in-depth personnel planning tools and the ability to perform short- or long-term planning to create financial projections. The software also has a database of venture capital resources and SBA loan information and loan applications. Cash Compass, which is downloadable from the company’s website, is geared toward small and medium-sized businesses, providing financial performance management, including monitoring cash flow, managing budgets and forecasting by month or year. The application allows import from QuickBooks or Business Plan Pro, which allows quick access to key financial information and forecasting.

Isaac M. O’Bannon
The CPA Technology Advisor, July 2005
Note: This review refers to Business Plan Pro 2005.

The Sun
________________________________________

Excellent package…
…superb program that is a must for anyone serious about making their business a success.
The Sun, June 2005

Business Plans a review of business plan software
________________________________________

“This business plan package was a joy to use, with its easy to follow guidance and clear descriptions at each step, producing a polished and professional looking result. Recommended for any business but especially for those wanting some help in understanding the important parts of a business plan. Leads you through the financial section with understandable examples and good explanations.”

Company Partners, June 2005
Note: This review refers to Business Plan Pro 2005 UK Edition

Computer Shopper
________________________________________

“…provides an easy way to create a professional plan, providing lots of useful tips and guidance along the way.”

Sam Ellis – Computer Shopper, May 2005
Note: This review refers to Business Plan Pro 2005 (UK).

Home Office Reports Review of Business Plan Software
________________________________________

“Before we built our last business plan, we purchase 7, count ‘em 7 packages to find the best one – the most feature rich and functional to us was Business Plan Pro – hands down!…

Without question, we believe that Business Plan Pro (Premier edition which is what we use) is the best software on the market. We’ve spent a lot of money and time trying out a number of others and keep coming back to Palo Alto!”
Home Office Reports, March 2005

PC Home
________________________________________

“A superb software suite with everything needed to succeed in the business world and impress your bank manager when if most counts!”

PC Home, October 2004
Note: This review refers to Business Plan Pro 2004 (UK).

Help in Getting a Company Off the Ground
________________________________________
“The wizard-based interface eases the process of creating a professional plan and helps you make your business a success.”

Laura Jones
Personal Computer World, January 2005
Note: This review refers to Business Plan Pro 2005 (UK).

Golden Triangle PC Club
________________________________________

“…this latest 2005 edition of Business Plan Pro continues to shine as the most used and well known of the bunch, and for good reason. In Business Plan Pro 2005 you will find an assortment of tools not found in any other comparable product…”

By Dale Farris, Vice President
Golden Triangle PC Club, January 2005
Note: This Review refers to buisness plan pro 2005 Premier (US)

Entrepreneur’s Guide to Small Business Software: Business Plan Pro 2005
________________________________________

“Overall, I was very satisfied with my experience using Business Plan Pro 2005. I went into this review not having ever used any actual business plan software so I really didn’t know what to expect. I never thought I would be able to construct the entire plan just by using the setup Wizards provided.”
Troy Byrd
Young Money, December 2004
Note: This review refers to Business Plan Pro 2005 (US).

First Things First
You want financing? Start with a good business plan.
________________________________________

“Software programs can take a lot of the guesswork out of writing a business plan. For instance, Business Plan Pro 2005 ($99.95), published by Palo Alto Software, Eugene, Ore., guides the user through the writing of each part of a business plan using lots of ‘wizards,’ or pages with simple questions that, once answered, move the plan forward.
The program easily creates spreadsheets, charts and graphs from numbers that are typed in. The plan can be converted into a Microsoft Word document or a PowerPoint presentation, complete with graphs and charts. The software also includes some basic market research, and more than 400 sample plans.”

Jessica Mintz
THE WALL STREET JOURNAL November 25, 2004; Page R10
Note: This review refers to Business Plan Pro 2005 (US).

New Products
________________________________________

“Users can fine-tune numbers and customize them to match their business model. The software offers breakout tables for managing inventory and cash flow in more detail. It also exports tables, charts, and graphs to PowerPoint. Users can use templates to quickly put together presentations.”
Accounting Technology, November 2004
Note: The review refers to Business Plan Pro 2005 (US).

PC Home Review
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“The great thing about this software is that you really don’t need any prior knowledge in order to put your plans into action. Indeed, the package comes complete with a selection of over 400 proven business plans for you to sample as you need to. Thanks to this, and also the way the program gently walks you through every step of the procedure, setting out your stall is made that much easier.”

PC Home, October 2004
Note: This review refers to Business Plan Pro 2004 UK Edition.

Need a plan?
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“You might expect the business plan software program to be rather basic and pared down. But, Business Plan Pro creates comprehensive business plans complete with sales forecasts, cash flow and market analyses, as well as business performance milestones.”

TECH TALK Newsletter, October 2004
Note: This review refers to Business Plan Pro 2005 (US).

SmallBizTechnology.com
________________________________________

“The Business Plan Pro is an excellent way for an entrepreneur to outline a clear vision for his company or for an established business owner to analyze and focus his business plan.”
Joanna Sorocki
SmallBizTechnology.com, October 2004
Note: This review refers to Business Plan Pro 2005 (US).

Plan to Plan
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“A top-shelf application, Business Plan Pro 2005 also employs sophisticated wizards and formatting options to produce a clean and effective business plan. Accountants can make use of its ability to present analyses in monthly, three-year, and five-year formats, with key ratios compared to those of more than 8,000 industries. Those working with larger client firms will benefit greatly from the additional tools and customization in the Premier Edition.”

Dave McClure
Accounting Technology, October 2004
Note: This review refers to Business Plan Pro 2005 (US).

A Great Tool for Many Businesses
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“We were very impressed with Business Plan Pro 2004. It can cope with a wide variety of situations and had a good mix of handholding for beginners but freedom of expression for more experienced planners. Its ability to handle UK VAT and the Euro are also welcome…[W]e feel Business Plan Pro is a great tool for anyone wanting to put together a quality business plan for a wide range of business types.”

Iain Laskey
Practical PC, June 2004
Note: This review refers to the Business Plan Pro 2004 UK Edition.

The small-business shopping cart
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“Maybe that blockbuster business idea is still rattling around in your head somewhere. A good step toward making it a reality is Palo Alto Software’s Business Plan Pro 2004. It has everything you need to produce an attractive business plan, including more than 400 sample business plans that you can use to inspire an irresistable business plan of your own. An array of wizards guides you through virtually every page of your plan, making your questions about sales forecasts, market analysis, cash flow, and business terminology a snap.”

by the Editors
ComputerUser.com March 2004
Note: This review refers to Business Plan Pro 2004 (US version).

Better Business Plans
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“Palo Alto Software’s Business Plan Pro 2004 makes a painful process less so by walking you through plan creation and printing a marketable copy.”

Kathy Yakal
PC Magazine, November 11, 2003
Note: This review refers to Business Plan Pro 2004 (US version).

Get it Right with Business Plan Pro
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“Business Plan Pro 2004 aims to help you get it right. It provides templates, tips and step-by-step help with writing the perfect business plan.”

James Taylor
Computer Shopper, October 2003
Note: This review refers to Business Plan Pro 2004 (US version).

Business Plan Pro 2004 Unleashed
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“Available in two editions — Standard and Premium — Business Plan Pro makes a great addition to your business computing toolbox.”
SmallBusinessComputing.com September 2003
Note: This review refers to Business Plan Pro 2004 (US version).

Forward Planning Critical for Start-ups
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“Business Plan Pro 2003, developed by Palo Alto Software, provides a wizard-driven interface from start to finish, and the largest single collection of sample plans in the industry. It has linked spreadsheets with established formulas to handle the calculations to create a full set of financial statements.”
What to Buy for Business, August 27, 2003
Note: This review refers to the Business Plan Pro 2003 UK Edition.

How to succeed in writing a business plan without really trying.
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“Because Business Plan Pro is reasonably priced and actually delivers a professionally prepared plan, there really is no excuse for not having this basic and essential business document on hand.”

Vicki Brightbill
Sounding Line, August 2003
Note: This review refers to Business Plan Pro 2004 (US version).

Got a business? Get a plan! Here’s how
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“Business Plan Pro literally touches on every aspect of a business. When you are finished you will not only know more about your business (or department) than you do today, you will have words and numbers that can explain it to someone else.”

David Coursey
ZDNet.com, June 2003
Note: This review refers to Business Plan Pro 2003 (US version).

PC Advisor Awards Business Plan Pro 2003 the Gold Award
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“We were impressed with the way Business Plan Pro took a complex and daunting topic and made it accessible even for novice users.”

Alex Katz
PC Advisor, May 2003
Note: This review refers to the Business Plan Pro 2003 UK Edition.

Entrepreneurs get e-help
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“Palo Alto Software has released two new business planning products designed to help entrepreneurs start new businesses and to help existing businesses improve their planning process, and grow their businesses successfully.”

TechCentral, April 10, 2003
Note: This review refers to the Business Plan Pro 2003 UK Edition.

Make Planning Easier
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“But writing a professional business plan requires painstaking work and effort, unless you happen to have a copy of Business Plan Pro 2003 in your business computing toolbox. ”

Patricia Fusco
SmallBusinessComputing.com, April 8, 2003
Note: This review refers to Business Plan Pro 2003 (US version).

Atlanta PC Users Group Review
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“Whether you’re a total newbie starting a business, or an experienced entrepreneur, BPP 2003 is simply the easiest and quickest way to create a successful winning business plan.”

Bruce Pechman
Atlanta PC Users Group, March 2003
Note: This review refers to Business Plan Pro 2003 (US version).

Biz Planning Software Gets Ever More Crucial
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“With its integrated templates, books on business planning and Internet Web planning, its extensive context-sensitive help and other features, Business Plan Pro 2003 should be part of an accountant’s toolkit for business planning and analysis.”

Dave McClure
Accounting Today, February 10 – 23, 2003
Note: This review refers to Business Plan Pro 2003 (US version).

New business planning software
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“Business Plan Pro 2003 enables firms to improve their growth potential by smart forecasting and budgeting.”

BetterBusiness, February 2003
Note: This review refers to the Business Plan Pro 2003 UK Edition.

Business Plan Writing Made Easy
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“What’s more, writing a business plan needn’t be an arduous task, particularly if you have the right software. To that end, we recommend Palo Alto Software’s Business Plan Pro 2003, which retails for $99.95.”
Variable Product Specialist, February 2003
Note: This review refers to Business Plan Pro 2003 (US version).

A Plan of Action
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“Business Plan Pro 2003 comes with a great book, Hurdle: The Book On Business Planning, and the software has an appealing and efficient interface with well-written instructions.”

Black Enterprise, February 2003
Note: This review refers to Business Plan Pro 2003 (US version).

Better Planning
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“Business Plan Pro 2003 and Business Plan Pro 2003 Premier are designed to help UK entrepreneurs successfully start up, gain funding for new businesses and expand existing ones. The packages try to help you master the planning process through intelligent forecasting and budgeting.”
Enterprise for Entrepreneurs, January 3, 2003
Note: This review refers to the Business Plan Pro 2003 UK Edition.

New Business Magazine Recommends Business Plan Pro UK Edition
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“Now, Business Plan Pro 2002 does a lot of the legwork for you…Business Plan Pro comes with over 250 completed business plans for different kinds of businesses. These help to provide boilerplate text which you can edit to suit your own style and business. It also has wizards that guide you through the completion of each section by asking questions and giving detailed instructions. All this makes the process easier and more thought-provoking.”

New Business Magazine, Winter 2003
Note: This review refers to the Business Plan Pro 2003 UK Edition.

The message is:
if you want to get ahead, get a business plan…then get a plan B
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“Palo Alto claim its package contains everything you need to define your business, and given a breadth of functionality that allows the user to compare industry ratios, set schedules, create personnel and mini-marketing plans and find funding, this column finds it hard to argue with that.”

Iain S Bruce
Sunday Herald, October 2002.
Note: This review refers to the Business Plan Pro 2003 UK Edition.

Business Plan Pro Review from Cool Tool Awards
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“The folks over at Palo Alto Software know business plans, perhaps better than anyone, and it’s never been more evident than in their newest release, Business Plan Pro 2002.

This new version of the popular, best-selling, Business Plan Pro, comes packed with more value than ever before. In addition to helping you construct a clear and concise plan (complete with graphics and financials), Business Plan Pro 2002 offers many new invaluable features…”

CoolToolAwards.com, November 2001
Note: This review refers to Business Plan Pro 2002.

Get your business in gear with a plan
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“Palo Alto’s Business Plan Pro typically gets the nod from those in the know. My vote goes to this package, too, for several reasons. ”

Gregg Keizer
ZDnet.com, June 4, 2001
Note: This review refers to Business Plan Pro v4.0.

CyberStuff.net praises Business Plan Pro
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“Palo Alto Software has created one excellent product. The company’s claim that Business Plan Pro 2002 is ‘a landmark step forward in business-planning creation, making the development of a business plan easier, quicker and smoother than ever for entrepreneurs, owners, and managers everywhere’ is quite accurate.”

Cyberstuff.net, 2001
Note: This review refers to Business Plan Pro 2002.

Enter the Bank Armed (with a Plan)
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“Written for Windows 95, 98, NT4 SP3 or 2000, Business Plan Proâ„¢ 4.0 is a simple idea that is well executed. Users who listen and follow the step-by-step process will get one of two things for their time and money: either a well-crafted plan, or a reality check revealing that what they believed was a fully thought out business plan may still need work. ”

Rod Lamirand
canadacomputers.com, June 27, 2000
Note: This review refers to Business Plan Pro v4.0.

Win100 2000 Award
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“Business Plan Pro 4.0 is the gold standard for creating a thorough business plan for gaining financing to start your own business.”
Windows Magazine, June 2000
Note: This review refers to Business Plan Pro v4.0.

PC Magazine Reviews Business Plan Pro 4.0
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“Palo Alto Software’s Business Plan Pro has always been the best overall business plan creation program.”
Kathy Yakal
PC Magazine, February 10, 2000
Note: This review refers to Business Plan Pro 4.0.

The Value of Writing a Business Plan
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“I could have bought the software online but before I did that I stopped by a local Office Max and actually picked up the box and read all about it. I wasn’t worried about the online purchase (I ended up receiving the software directly from the company) I just didn’t want to invest a lot of my time in something that would not serve my needs. I was not disappointed. The software, Business Plan Pro, can be found on line at paloalto.com.”
Wayne Messick

iBizMagazine.com, 2000
Note: This review refers to Business Plan Pro v4.0.

WinList 1999
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“I’ve always admired Business Plan Pro for its ability to ask the right questions and make you think about your business plan as you create it.”
Joel T. Patz

WinMag.com, December 1999
Note: This review refers to Business Plan Pro v4.0.

Business Planning Made Easy
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“A more open-ended and intuitive approach to writing a killer plan comes from market leader Business Plan Pro 3.0. This friendly program works like the wizards you’ve seen in tax preparation and financial software as you step through the various parts of your business plan, you answer interview questions that get rolled into the final version of your proposal.”

Dave Johnson
Home Office Computing Magazine, November 1999
Note: This review refers to Business Plan Pro v3.0.

Business Planners
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“Palo Alto’s Business Plan Pro has been a category leader for a long time, and our test of version 3.0 placed it at the head of the class once again.”

Joel T. Patz
Home Office Computing, December 1998
Note: This review refers to Business Plan Pro v3.0.

The Other Side of Software
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“Besides its expert hand-holding, Business Plan Pro is notable because of how tightly organized it keeps you.”

David Haskin
Small Business Computing & Communication, September 1998
Note: This review refers to Business Plan Pro v3.0.

Get with the Program
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“In an age of ‘bloatware’ programs equipped with the little-used features, Business Plan Pro exemplifies the way software should be crafted.”
Success, September 1998
Note: This review refers to Business Plan Pro v3.0

Build Better Business Blueprints
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“Business Plan Pro provides a step-by-step path through the development and formatting of a business plan: both the necessary text-heavy documents and the accompanying financial charts and spreadsheets it requires. New in this version are features like audio instructions, new and improved wizards, an overall plan manager, customizable charts, and graphics imports.”
Computer Shopper, September 1998
Note: This review refers to Business Plan Pro v3.0.

Plan on Success
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“Unless your banker or a potential investor asked for one, a business plan was another excuse to generate paperwork. But Business Plan Pro 3.0 makes the task an easy entrepreneurial rite of passage. ”
Smalloffice.com, August 1998
Note: This review refers to Business Plan Pro v3.0.

Product News You Can Use
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“Business Plan Pro steps people through the process who are full of great ideas but know that without a good business plan, they will have a hard time funding them.”
Computers Currents Magazine, Summer 1998
Note: This review refers to Business Plan Pro v3.0.

In the Planning Stages
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“Business Plan Pro is a really usable piece of software that won’t let you forget any detail when preparing a business plan.”
Your Office, June 1998
Note: This review refers to Business Plan Pro v3.0.

Show Me the Money
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“Business Plan Pro is a little more free-form than its peers and doesn’t force you through a Q&A gauntlet.”
Business Advertiser, April 1998
Note: This review refers to Business Plan Pro v3.0.

Business Plan Maintenance
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“Business Plan Pro offers some advanced spreadsheet features, such as changing the fonts and alignment or inserting and deleting columns and rows. If you’re not too familiar with spreadsheets, there’s a built-in safeguard – if any of your editing causes a problem with the calculations, the software halts the action.”
Self Employed Professional, March/April 1998
Note: This review refers to Business Plan Pro v3.0.

Planning software should match user’s style
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“Business Plan Pro does an excellent job of assembling the components of the plan into an effective, easy-to-read report.”
Tom C. Davis, CPA
Accounting Today, February 9, 1998
Note: This review refers to Business Plan Pro v2.0.

Realware – Getting Down to Business
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“Business Plan Pro begins with a Plan Wizard that asks a series of questions, such as whether your business is a start-up or an established business and your expected cash-flow patterns, and provides you with an appropriate template. It also takes you through all of a business plan’s necessary parts and what they should contain.”
Upside, February 1998
Note: This review refers to Business Plan Pro v3.0.

Turn your good idea into a great business plan
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“Plenty of great business ideas have failed because their creator did not effectively communicate the idea’s potential to an audience that could take it from the drawing board to the boardroom. Palo Alto’s Business Plan Pro will help improve this communication. ”
Lowell Conn
Onvia.com, 1998
Note: This review refers to Business Plan Pro v3.0.

SOHO’s Four Cornerstones
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“Of the currently available business plan products, my favorite is Palo Alto Software’s Business Plan Pro.”
Joe Farace
Puget Sound Computer, January 1998
Note: This review refers to Business Plan Pro v2.0.

Planning Ahead
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“Business Plan Pro has a Plan Wizard that asks you a series of basic questions, creates a file and activates the Task Wizard.”
Business Startups, January 1998
Note: This review refers to Business Plan Pro v3.0.