The organization of a
You should have your
1) Table of Contents
The Table of Contents is one of the most important parts of the Plan. The TOC should be very detailed and well organized so that the reader and user can find and access the information easily and quickly. You can write a great Plan with all the necessary information in it, but if the reader can’t easily find or access the information, then the Plan ceases to be a useful tool.
The TOC should be organized by each Section and Sub-Sections of the Plan with the corresponding page numbers. It is strongly recommended that your Plan be developed as an outline document, with all the Sections and Sub-Sections in the Table of Contents hyperlinked to the page where the information resides. This way the reader and user can access the information quickly and easily.
2) Section One: Executive Summary
The Executive Summary should be written last. Why? Because it organizes and summarizes the entire
The Executive Summary gives the reader a quick overview of the important facts contained in your
Brevity, yet completeness and inclusiveness, is key when writing your Executive Summary. It should be concise yet have adequate detail about your
3) Section Two: Company Overview
This section encapsulates who you are as a Company: the History, Structure, Ownership, Locations, Products and Services Summary, Strengths and Weaknesses, Performance, Customers, Trends, Company Assets and so forth. This section comes first in the
4) Section Three: Management and Operations
This section builds on the Company Section explaining in more detail who will run the company and how it will be run. You can have the greatest
5) Section Four: Products and Services
Now that you have developed the Company and Management / Operations Sections, it is time to describe your Company’s Products and Services in detail. This section identifies why your Product and Service is unique and where weaknesses reside. Customer and Market identification, analysis and segmentation starts in this section to be later developed in the Marketing Plan and implemented through the Strategic Plan.
6) Section Five: Marketing Analysis and Plan
The Marketing Section explains in great detail how your Product and Service will be positioned and distributed in the market, supported by detailed, believable market research. This section deals with your Industry, Market Segments, Target Markets, Market Trends and Growth, General Competitive Environment, Customer Choices and Competitive Analysis / Positioning / Edge, to culminate in your Marketing Strategy and Programs.
7) Section Six: Strategic & Sales Plan
The Strategic Plan puts the Marketing Plan into action, showing how to implement the Marketing Plan into a cohesive and executable Sales Plan. The Strategic Plan develops a system to effectively deal with Potential Problems and Risks and culminates in producing Company Strategies, Tactics and Strategic Programs. These programs are implemented through the developed Sales Programs and Sales Plan. Operating Budgets, Control Mechanisms, Milestones and Sales Forecasts are also integral parts of the Strategic Plan.
The Strategic Plan provides a process for Strategic Management, Auditing and Reassessment. It measures performance, has control functions and corrective actions, reassessing when and where necessary. Strategic Planning is top-down and bottom-up, completely integral to your Company’s Operations, from the Vision and Leadership of the CEO, to Management’s Implementation Oversight, to the Sales and Operations Units. It provides company-wide Strategic Vision, Focus, Structure and Discipline, while providing an atmosphere of learning and awareness, with a process for identifying deficiencies and, in turn, fixing those challenges.
8 ) Section Seven: Financials
If you develop an effective Strategic Plan through our a well prescribed process, completing the Financial Section will not be as difficult as often anticipated. The principal reason why
Probably the most important of all the Financials is the Cash Flow Statement. The Cash Flow will assist you on a daily basis in running your business effectively. Simply put, the Cash Flow shows the influx of cash and the outflow of cash in your Business. Cash Management is absolutely critical in successfully running your business, project or venture. The Cash Flow Statement is also very important when you are seeking funding for your operation and analyzed closely by lenders, investors and venture capitalists alike. Your Cash Flow is also critically important to your relationship with your Suppliers. Having a Supplier
The Cash Flow Statement should be your guiding force in Financial Modeling and Cash Management. Effectively managing your Cash creates leverage, which will lead toward increased profitability. The leverage is created within a Cash Flow Management System as it shows how much cash is necessary to grow and finance your Company. Many businesses focus on the Profit and Loss Statement, which is very important; however, they often over look the Cash Flow Statement. Good financial analysis focuses on the Cash Flow Statement, then relates it to the Profit & Loss components (i.e. minimizing costs), which in turn increases Profitability and results in a stronger asset and equity base on the Balance Sheet. Financials and good Financial Management stem from the inter-connectivity of a Company’s Financials. Don’t forget how important Cash Flow Management is to your Company’s future profitability and net worth.
Another very important Financial, which works hand in hand with the Cash Flow Statement and Cash Management, is your Company’s Target and Actual Budget. Budgets are used principally for two purposes: Planning and Control. A Budget matches short term targets with long term Strategic Planning, while providing an indicator of future problems ahead. A good Budgeting System will indicate when Costs and Expenses are heading over Budget (Actual vs. Target), providing the business owner time and opportunity to correct the problem before it significantly affects Cash Flow. Your Budget is an extension of (and a result of) your Cash Flow Statement, helping you to effectively control and plan your operational cash, costs and expenses.
We recommend Rolling Budgets which look forward 12 months on a monthly basis, budgeting an additional three months at the end of each quarter. This way you always have a 12 month continuous outlook for Planning Purposes, yet provides you real time Cost Basis for Control purposes. A Budget should be flexible so that you can separate the effects of variations between Actual and Estimated results. Moreover, a Budget is a tool to evaluate your Business Units (Departments) and Management’s Performance. Needless to say, assembling a good Budget requires the input of your entire organization, which in turn, is a very good thing. Just as your
It is important to understand how your Financials relate to each other as you build and develop them. This is why Financial Software Programs are so beneficial, making Financial Analysis, Development and Projections a snap (once you have developed a solid Strategic Plan). There’s a lot of back and forth between the Profit and Loss Statement, Balance Sheet and Cash Flow Statement. When using a Financial Software Program, it is important that the program allows you to customize the Formats for your specific needs and download the Financials into Excel Spreadsheets for maximum utility and flexibility.
When making Financial Projections, the projection period differs for the particular company, venture or project. For instance, a large scale Real Estate Development Project’s Cash Flow Projection could be three, five or ten years, depending on the project scope and length. Also Real Estate Companies and Projects typically require additional Financials, such as, the Construction Cost Analysis and Cash Flow, Schedule of Real Estate, Construction Cost and Disbursement Schedule, and so on (Note: some of these may be applicable to other business sectors as well- for instance, a Tire Distribution Company may have substantial real estate holdings, hence, a Schedule of Real Estate would apply). Also, for Real Estate Companies and Projects (as well as for companies applying for
A very important component of the Financial Section is the Assumptions sub-section. This details the assumptions you have utilized in developing your financials. It is important to list the various calculations and formulas used in developing your Financials since those formulas can be company, deal or project specific. Detailed assumptions provide transparency to your Financials.
Financial Projections need to be believable and realistic. If anything, they need to be conservative. Too often we also see extremes of too few numbers or too many numbers. Provide best case, worst case and expected Financial Projections, along with simple and detailed formats. Remember that if you build out your Financials as a result of a good Strategic Planning Process, the financial results will most likely be believable and realistic as possible. We find that if your Financials have truly conservative numbers (yet still see profitability), you will often exceed your Plan which becomes a great Psychological boost for your Company (and any lenders or investors).
9) Section Eight: Appendix
The Appendix Section of a
Source by Frank Goley