Info-Guide – Write your business plan

The executive summary is an overview of the key points contained in your business plan and is often considered the most important section. It is usually the first section that a potential investor or lender will read, and may be the only section to be read if it is not prepared properly. This important summary should:

• Include highlights from each of the other sections to explain the basics of your business
• Be sufficiently interesting to motivate the reader to continue reading the rest of your business plan
• Be short and concise — no more than two pages long

You will want to describe your business concept, competitive advantage, legal structure (e.g. sole proprietorship, corporation), the market, and your own experience.

Although the executive summary is the first section of the plan, you should write it last.

This section should briefly but clearly describe what your business is all about. This segment should include the following elements:

Introduction

This section should give readers a very brief overview of your business — where you've been, where you are now, and where you're going in the future. Include:

• A short history of your business — is it a new business venture, are you purchasing an existing business, or are you expanding an existing business?
• The purpose of your business — discuss your vision and the main objectives of your business
• A description of your products and services — what will you offer?
• Your business' legal structure — are you a sole proprietorship, a partnership, a corporation, or a cooperative?

Current Position

• Your current position — what stage of the business lifecycle is your organization in?
• Your industry — is it growing, stable, or contracting?
• Your achievements — what have you achieved so far?

Competitive Advantage

• Your competitive advantage — what is your advantage over the competition (e.g. innovative products, strong business model, appeal to niche markets)?
• Your competitors — who are they and what are their strengths and weaknesses?
• Your business model — why is it effective?

Growth Plan

• Growth timeline — where do you see your business in a year from now? 3 to 5 years down the road?
• Milestones — what objectives have you set for your business and when do you expect to achieve them?
• Goals — what are your short-term (the upcoming year) and long-term (the next 3-5 years) goals?

You should also include the date the business was registered/incorporated, the name of the business, its address, and all contact information.

Describe the activities you will use to promote and sell your product or service. You should touch on each of the "four Ps" of the marketing mix:

• Product — how does your product or service meet the needs of your target market?
• Price — how much will you charge for your product or service and why?
• Place — how are you going to get your product to your customers?
• Promotion — how will you connect with your target market?

Your marketing strategy should also include information about your budget — how much money have you budgeted for marketing and sales costs?

You may also want to include a profile of your "ideal customers". You can create profiles based on customer type — consumers, retailers, or wholesalers — or base your segments on demographic information such as age, location, and income level.

Keep in mind that solid market research is the backbone of an effective marketing strategy. You will want to back up your statements with facts — explain how you reached your conclusions and include statistics from reliable sources.

• Price lists, estimates, quotations and tenders 

  Learn how to draw up a price list, prepare proposals and estimates, price a contract bid and present your prices to your customers.

• Price your product or service 

  Find out how to set a pricing strategy and how to study your costs and pricing to ensure that your business is profitable.

Your business plan should outline your current operational requirements as well as your projected requirements for the next 3 to 5 years. Your inventory management and accounting systems should have the ability to produce up-to-date reports.

You can include:

• Day-to-day operations — provide a general description of the day-to-day operations of the business, such as hours of operation, seasonality of business, suppliers and their credit terms, and so on.
• Facility requirements — identify your requirements in terms of size and location. Include any related documents in the appendix of your business plan, such as lease agreements or supplier quotations. Detail any special requirements associated with the facility and include any licensing documentation in your appendix.
• Management information systems — indicate how you plan to control stock, manage accounts, control quality and track your customers.
• Information technology (IT) requirements — identify the IT systems you will be using for your business. As this is a key factor for most businesses, indicate if you are using a consultant or IT support service and outline any planned IT developments.

You may also want to include your operations manual as an appendix to your business plan.

Conducting a SWOT analysis is an important part of business planning. A properly prepared SWOT analysis shows investors that you have realistically and objectively considered these elements.

Banks and other lenders understand that businesses will encounter difficulties at some point, and want to know how you will deal with these challenges. Remember that overestimating strengths and opportunities or ignoring potential problems will undermine your credibility.

Putting time and effort into conducting a comprehensive SWOT analysis can help you:

• Make sound decisions and future plans
• Anticipate problems and make the necessary changes
• Set aside resources to take advantage of potential opportunities

This section addresses how you plan to manage your employees and human resources processes. You should also discuss your short-term and long-term plans for employee recruitment, training, and retention. If appropriate, discuss any advisors, mentors, consultants that offer you support.

You may want to include:

• A brief organizational layout or chart of the business
• Who does what, with a brief job description of each position
• The essential skills required for each position
• Information on your employee training program
• Any other relevant information related to personnel (e.g. gaps in your team, training budget)

Don't underestimate the importance of this part of your plan. Investors need to know that you and your employees have the necessary balance of skills, drive and experience to enable your business to succeed. It is also advisable to outline any recruitment or training plans, including timelines and costs.

• Develop your management team 

  Find out the processes and methods you will need to set up your management team.

Implementing good environmental and social practices is good business — it can give you a competitive advantage and help foster goodwill toward your business. In this section you should discuss ways in which your business honours ethical values and respects people, your community, and the environment.

You may want to include information about:

• Your company's environmental policies and initiatives
• Your company's contributions to your community
• Relevant certifications such as fair-trade certification, organic certification, or Leadership in Energy and Environmental Design (LEED) certification

More information

• How to write an environmental policy 

  Discover the benefits of having an environmental policy. Find out how to select the right format and content.

Effectively using information technology is an important part of managing a business. In this section, you should outline how you plan to use internet technologies to reach customers, manage your business, and reduce costs. You should include information about:

• E-commerce activities (selling your product or service online)
• Website development
• Hardware and software requirements
• Relationships with external information technology specialists

Keep in mind that implementing e-business strategies can save money — if this is the case for you, you may want to highlight potential savings in this section.

• Joint ventures and partnering 

  Get an overview of the key ways to set up a joint venture, the pros and cons of joint ventures, and learn how to manage this type of company.

This section of your business plan essentially turns your plans into numbers. As part of any business plan, you will need to provide financial projections for your business. Your forecasts should run for the next 3 to 5 years. However, the first 12 months' forecasts should have the most detail, including assumptions both in terms of costs and revenues, so investors can clearly see your thinking behind the numbers.

As you put your plans down on paper, remember the importance of thinking objectively. Analyzing your venture from three points of view — optimistic, pessimistic, and realistic — can give you a solid idea of what to expect as you move forward.

Your financial forecasts should include:

• Cash flow statements — this is a cash balance and monthly cash flow pattern for the first 12-18 months. Include working capital, salaries and sales.
• Profit and loss forecast — this is the level of profit you expect to make, given your projected sales, the costs of providing goods and services, and your overhead costs.
• Sales forecast — this is the amount of money you expect from sales of your product and/or service.

Things to consider:

• How much capital do you need, if you are seeking external funding?
• What security can you offer to lenders?
• How do you plan to repay any borrowings?
• What are your sources of revenue and income?

Your forecasts should cover a range of scenarios, and you should include the contingency plans you've developed to offset any risks. You can also review benchmarks and averages for your type of business and discuss your business' position.

• BDC Business loan calculator 

  Calculate how much a loan will cost your business, and print a complete loan amortization schedule.

• Determining your profit 

  Learn how to determine your income and expenses and calculate your profit.

• Checklist for profit watching 

  Use these questions and comments to analyze your profits, their sufficiency and trend, and determine how each product or service is profitable.

• Price your product or service 

  Find out how to set a pricing strategy and how to study your costs and pricing to ensure that your business is profitable.

• Financial Performance Data 

  Find out how your business measures up to others in your industry with this benchmarking tool.

See more documents

Access more resources in the electronic version of this document

This section of your business plan addresses your future plans — when the time comes, how will you exit your business? Early planning will give you the opportunity to consider all of your options, including strategies that may take time to implement. For example, if you plan on passing your business on to your children, you'll need sufficient time to train them and integrate them into your business.

As you prepare your exit strategy, you will want to ask yourself the following questions:

• When do I want to leave my business?
• What do I want to do with my business? Options include selling it, passing it on to a family member, or closing the business and liquidating its assets.
• How will I determine the value of my business?
• How much money will I require to lead a comfortable life after exiting my business?

Once you considered your options and set objectives, it's time to add an exit strategy to your business plan. Although you may not be exiting your business for some time, a solid strategy will be a roadmap to your future goals.

• Value and market your business 

  Explore key factors affecting the value of your business and common methods used to calculate its value. Learn how you can find different buyers for your business.

• Selling your business 

  Find out which points to consider and what steps to follow for a successful transfer of your business.

• Closing a GST/HST account 

  Find out when and how to close your GST/HST account and the ensuing obligations.

You'll want to thoroughly review your plan once it's done. Try to avoid using jargon — the person reading your plan may not understand your businesses as well as you do. You can ask friends, family, associates, and mentors to review it. Don't be afraid to seek advice from professionals such as lawyers and accountants. You may also want to consider hiring a professional proofreader to check for errors.

Remember, your business plan represents your business, so you want it to be as professional as possible.

Get answers to frequently asked questions and see sample business plans and templates:

• Business Plan — CBDC 

  You can use this fillable business planning tool to prepare your business plan.

• Starting a Business — RBC Royal Bank 

  Take advantage of the guides, tools, templates and resources offered by Royal Bank to make your business project a reality in 5 steps.

• Your guide to business planning — CIBC 

  Start planning with the help of this line-by-line approach to business plan writing that takes you through the process one step at a time.

• BDC business plan templates 

  You can create your own professional business plan with the help of the BDC sample plan and business plan template.

• Futurpreneur Canada Business Plan Writer 

  Are you ready to start your business? You can use this online tool to develop, write, and download your business plan.

• Projet A (in French only)

  Free, comprehensive tool for creating your business plan.

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Disclaimer

The information available on the Info entrepreneurs website comes from a range of government and private sector sources. Because of its general nature, the information cannot be considered exhaustive and must not be used in lieu of legal or professional advice. The information is updated regularly, however, certain details may not reflect recent changes.