Business planning and the business plan
Plan as a process
A business plan is both a thinking process and a written document. It tests whether the venture is viable and communicates the model to lenders, investors, partners and the owner. Typical sections include the executive summary, business description, products, market analysis, marketing plan, operations plan, management and organisation, legal structure, risk assessment, financial forecasts and appendices. The executive summary is written last but placed first. Objectives should be SMART: specific, measurable, achievable, relevant and time-bound. Financial forecasts must rest on stated assumptions, such as units sold, price, cost per unit and payment terms. A lean canvas is a one-page alternative for early-stage testing.
Traps
A common error is treating the plan as a document to finish rather than a tool to revise. Another is overoptimistic sales with no evidence. Candidates often forget assumptions, competitors, cash flow and contingencies. The executive summary is not an introduction written first. Also, a plan for a bank differs from an internal plan: lenders emphasise repayment, collateral and cash flow.
Worked example
'Increase sales' is not SMART. Convert it: 'Increase monthly lunch-pack sales from 400 to 600 units within six months by adding two corporate clients and recording weekly sales.' The target has a baseline, number, deadline and method. Rule of thumb: every number in the plan should have a driver and an assumption behind it.