Business Plan Template

There are several situations when a business plan is needed. New employees, banks, lenders, creditors, and in general, people who hold a certain interests in a company have a look at the business plan before even dealing with the company. On the whole, a business plan plays a highly instrumental role in giving an appropriate insight to the company’s structure and operations. An annual report however, must not be mistaken for a business plan. The annual report principally consists of statutory disclosures of the company, and is concentrated around the performance of the company. A business plan is not necessarily prepared to scope that entire organization. In some cases, it is also prepared to depict the graph of a single product or initiative.

In order to make the business plan more comprehensible, every element has been described in short here.

Executive Summary
The executive summary is an index cum introduction to the entire business plan. The summary must basically contain two different elements―the name of the company/business organization, and its premises and incorporation details. Apart from these, major key players of the business must also be mentioned. Some companies also quickly summarize their operations, objectives, and specialties. An accompanying company motto also adds to the charm. This is basically an index of the document, and enables the reader to skip whatever he already knows.

Business Description
The business description is an in-depth explanation to the company’s operations and different objectives that are to be achieved in the course of the business. If the company is a major market player in some specific product, then the business history and timeline of development is also included. So basically, what is written on this page includes what the company does, in what time it does it, and in what manner it does it.

The third aspect is the market within which the company operates. The company’s major customers, their demands, requirements, and competitors are discussed. Apart from that, the major behavior of the market from the point of view of global supply and annual demand are elaborated upon. Often, the marketing policy that is going to be followed is also mentioned.

Products and Services
The products and services of the company, their quality, and their reputation are to be mentioned. The pricing policy of such products is also to be mentioned. The logic behind such a pricing can also be included in the financial aspects of the plan.

Organization and Management
The next aspect is the management of the company, key people, code of conduct, departments, and wings. This aspect is to be covered very carefully if the plan is being used to brief job applicants.

Business Succession Planning

At some point in your illustrious business career, you will surely feel the need for an able leader who can lead your company forward to growth and glory. It may be because you are seeking a retirement or may be you just want your offspring to shoulder the responsibilities of the family business. The decision to find a deserving successor can also result if the company is performing poorly and its worth is declining in the market. Whatever the case may be, planning to induct a new successor for the firm is a big decision, and should be implemented with care.

Family owned businesses carry with them a legacy of dedication and hard work. Hence, the succession should be carried out carefully so it doesn’t harm the firm in any way. Here are some guidelines to smoothen the process

Be Realistic
While considering the transfer of your business to your close ones, it is important that you decide the ownership transition a few years before officially leaving the office. You can segregate the different branches of your company and distribute the responsibilities to a few in the family. This will give them some practical experience, and prepare them for their responsibilities and designations that they are to hold in the near future. Chalk out a financial planning procedure with the help of your tax consultants and chartered accountants, that will help you during the transition period. Also, ensure that the tax planning is done in accordance with the firm’s goals and objectives in mind.

Carefully Hand Over the Duties
You may want your first son to be the successor of your business empire, or may be you have plans to divide the duties and responsibilities among your various family members. Try to have a free and fair talk with every successor, convey your goals and objectives about the business, and make sure they have the necessary and required skills to manage their responsibilities. Also, it necessary that the members who are chosen to run the enterprise own the larger share of the company in stocks and other financial assets.

Let Go Gradually
This is the most crucial factor that can affect your stock prices. Do not abruptly announce that you are retiring from the business. You hold a sensitive position in the management, and your every move is closely watched by your competitors and other market players. For small businesses, it may be easier to handle succession issues, but if your company is listed on the stock market, then be cautious about how you convey the message to your stakeholders, shareholders, media, and most importantly, to your customers. If your products enjoy a goodwill among the customers, then ensure that the brand image of the company is not affected. Introduce your successor as a confident player, who can handle the business effectively.

Planning for a succession, be it of a family-owned business or of an acquired business, requires planning and patience. Nowadays, many professional lawyers and financial consultants are available to guide you through the entire process, so seek help if necessary.

Restaurant Business Plan

Coming from a family that owns a restaurant business, from small individual eateries, to big resorts ideal for family holidays, I have always been interested in this field and everything to do with it. This could be either because I love food, or because while growing up, I have helped out in this business. Whatever it maybe, it gave me the idea to help out my family with a business plan.

Elements of a Restaurant Business Plan

A typical restaurant will have these elements:
Description – In the description you will talk about what kind of restaurant it is going to be, whether it is a small-time one or a medium one. It also talks about what kind of food will be served and the location. Besides this, this section should also include:

Mission statement
Development status
Future plans

Industry Analysis – here you will talk about the restaurant industry. We all know that this industry is a growing one and at the same time, one that is highly competitive. This is because more and more people are relying on restaurants to provide them with their daily food, because of lack of time and hectic schedule. You can also talk about:

How the industry is in this day and age, its revenue on an average, and other statistics.
Future trends and opportunities for growth

Products and Service – this is where you discuss what sort of service and products are going to be a part of your business. Are you going to be a self-service restaurant, a fast food joint, a fine dining restaurant, or a family style casual restaurant? Will you be dealing with take-out and home delivery too? These things are important. Other than these, details include:

Production of food
Future growth

Target Market – here you mention what kind of clientele you are looking to target, this will be your target market. Are you catering to families, teenagers, people on the move, or social butterflies? This will depend on your type of restaurant and cuisine. Here you have to be completely sure of the demographics you will be catering to. In this section, you also have to talk about:

The location and customers therein
The kind of customers you hope to attract
Future market trends

Competition – like they say, “keep your friends close and your enemies closer”, we are not talking about enemies here, but competition. Healthy competition is good for every business; it keeps the venture fresh and on its toes. Just like any other business, you should always know about the competition. This section should also include:

Profile of competitors
Strategy to deal with competition

Marketing and Sales Strategy – Each and every business should have a strategy regarding marketing and sales efforts. This is important more so for a restaurant business, because you need to know how to attract clientele and how to publicize the new venture. In this section, you should give a detailed report on:

Penetration in the market
Strategy used for marketing
Future plans and strategies relating to marketing

Operations – this is where you will discuss the actual operations of the business. What should be included is:

Office space and facilities
Operating hours and days
Employee induction, training, and scope of duties
Production of food
Catering and delivery details

Management – this is where you will be talking about the kind of management, the management style, and should also include:

Principals and core employees
Incentives, compensations, and salaries
Board of directors
Future management
Management structure and style
Ownership and share holding

Future Development – here you talk about how you expect the restaurant to grow and develop, it could be in a five-year plan or however else it suits you. Key points should be:

Long-term goals
Strategies for growth and development
Evaluation of any and all risks

Drafting this plan isn’t going to be easy. It is a detailed job, requiring extensive study. Make sure you go through your plan at least 10 times before you actually start working on it. Best of Luck!

Planning for Starting a Home Based Business

A home based business needs to have a proper plan in place for it to be successful. Working from home is a wonderful option for those of us who cannot, for whatever reason, go to an office for work. Several employment options exist for such entrepreneurs. However, to take advantage of the offers, you need to be well planned and organized.

Step One

First things first, you need to know in which area you want to provide work. For that you need to examine your skill sets and qualifications. That should give you a fair idea of which service you are able to provide.

Step Two

Even at home, you should have a dedicated work area where you can work peacefully. Finding such an area is the key, especially if you are staying at home because of kids or some other responsibilities. You need to find a time and place, where you would not be disturbed or distracted. You can then fix the number of hours, that you can devote to your work based on these factors. Your earnings would therefore depend on the number of hours you can spend working, and how fast you can do your work within these restraints.

Step Three

The next thing you need to have is a business plan. An ideal plan will outline the above mentioned factors in clear cut terms. An analysis of cost and market factors, will determine your cost per hour. You can thus calculate your projected income based on the number of hours you work.

Step Four

Once you have a plan in place, you need to apply for the necessary licenses and registrations. Check with your local government for the required formalities. It pays to have the paperwork in order, so as to avoid legal complications at a later date.

Step Five

The next step is, obviously, getting the work. If your work is internet based, then you need to look for websites where you can get such work. There are several wonderful websites where you can get such work on the Internet. However, if your work is not Internet based, then you need to generate work from other sources. Place an Ad in the local newspapers. Throw a launch party for all your friends and family, and put the word out there.

Going Further

Let the work come to you. Once you get the work, do it well, so that your clients remember you. Don’t forget to discuss payment terms before the work is done, so that there are no misunderstandings later. Word of mouth publicity only works, if you work well and deliver on time. As for publicizing your work via other media: you need to keep on doing it all the time, so as to generate constant work.

The Complete Business Innovation

Good ideas may surface from the farthest reaches of the organization. Thus, the challenge for top executives is to stimulate experiments across the entire organization, select the most promising of the lot, and disseminate them quickly and appropriately throughout the business.

We are living in a time when information and technology has given rise to abundance, so the competition in supply market is growing at a steady pace. Good ideas, in times like these, need to be nurtured and applied as efficiently and effectively as possible, in order to reap economic benefits.

Early research on innovation tended to address the organization’s ability to respond and adapt to external and/or internal changes (Burns and Stalker) (Hull and Hage). Subsequent work on innovation stressed more on proactive innovation and distinguished between the types of innovation. There are three types of innovation (process, product/service, and strategy), each of which can vary from incremental to radical and from sustaining to discontinuous.

Emphasis was on the organization’s ability to promote both process and product innovation, regardless of an immediate need for change (Kanter).

Innovation vs. Invention
Joseph Schumpeter defines innovation as the combination and creative application of existing and new knowledge of elements to improve existing and/or develop new products and services, production processes, organization-methods, and commercialization, in order to create or preserve added value.

The Oxford English Dictionary defines innovation as ‘making changes to something established’. Invention is the act of ‘coming upon or finding discovery’. It is important that we do not mix innovation with invention.

Business Innovation
Innovation is generated at individual, organizational, and environmental levels. Let’s look at various types of innovation.

1. Innovate Market or Innovation from Market (Consumer)
2. Innovate Industry or Innovation from Industry (Competitor)
3. Innovate Product or Innovation from Product / Process (Operations)
4. Innovate Team/Organization or Innovation from Team/Organization (Management)

Innovation from Market
“A business has only two basic functions marketing and innovation”, says Peter Drucker. However, Robert Tucker suggests five necessary steps to make a business innovative.

1. Innovation must be approached as a discipline, practiced and taught to employees.
2. It must be cross-functional, and not just left to the R&D department.
3. It must be proactive, and not just responsive to what competitors are doing.
4. It must involve everyone in the organization and everyone’s performance evaluation should include it.
5. It must be customer-centered.

First, second, and forth steps belong to innovation from organization. Third and fifth belong to innovation from market. Market surveys and research enable an organization to be innovative.

Innovation from Organization
Jim Biolos in Harvard Management Update offers the following six steps that need to be followed while making a team innovative:

1. Make sure that the members of the group are communicating with one another in a free-flowing or maybe even a freewheeling way.
2. Make sure that all the team members have equal and enough responsibility.
3. Show confidence in the team.
4. Provide the appropriate resources to the team, and make sure the members know that those resources are available.
5. Make sure that each team member has a challenging role in the work.
6. Monitor the pressure.

Team’s Success
A team usually consists of up to ten people, who devote about one-quarter of their time to the project for three to four months. Participating in a team is considered a plum assignment, because it provides exposure to top executives.

Employees of China’s multinational electronics company Haier, for example, discovered by visiting rural customers, that they frequently used their washing machines not only to wash clothes, but also to clean vegetables. Taking this new information and the potential market into consideration, Haier made a few modifications to its machine, and was able to make it versatile enough to wash both clothes and vegetables. This helped Haier become the market leader in rural areas of its home country.

Innovation from Management
“Managers don’t simply copy something they see elsewhere. They take pieces of practice or technology that they find and recombine them in novel ways to solve customer problems”, says Philippe Pommez, Natura’s R&D Director, “The hard part is not finding the new technology; it is knowing what you are looking for. This is where our conceptualization of new products and new lines that serve local needs becomes indispensable.”

Managers of companies situated in developing countries, sometimes despair of closing the gap with larger and better-funded multinationals. Clearly, there is hope for companies anywhere in the world to win through innovation and creativity.

Innovation from Industry
There are three important fundamentals of innovation and entrepreneurship.

First, an Industrialist searches for innovative opportunities and develops an innovative idea into a practical business or a service. Second is the industrial strategy that brings innovation successfully to the market. Third is free enterprise itself, and it focuses on the organization that is the carrier of innovation.

Innovation in Products
Switching to a new market with the same product can be considered innovative to some extent.

However, innovation in products is always the basic goal of any team, within an organization. Views of the customers through research and surveys are carry forwarded to the R&D team for further product innovation. Ultimately, it depends on how good you are at learning from the market, industry, and your team. Johnson & Johnson, the American multinational corporation, is a great example of constant and successful innovation in its products.

Attributes of a Family Business

Distinguishing Features

A cohesive force usually exists behind the management of these organizations, providing a strong sense of mission and a shared vision ideally cemented by loyalty and commitment.
The benefit of low capital costs allows them to adopt long-term business strategies or to exploit market niches, which are not sufficiently profitable for larger businesses.
They own long-term perspectives, saving and reinvesting capital, and viewing the business as a legacy of heirs. Hence, pressure for short-term profit is reduced.
Their attitude is inward looking. Decisions are based on emotions rather than commercial grounds.

Family System vs. Business System

Inward looking vs. Outward looking
Emotion based vs. Task based
Unconditional acceptance vs. Unemotional
Sharing vs. Reward performance
Lifetime membership vs. Perform or Leave
Averse to change vs. Embrace change
To nurture vs. To generate profits

Birth and Initial Expansion

Worldwide statistics show that the mortality rate among small and middle-size businesses is about 15 % at the end of the first year of existence, and 23 % after the second.

A newly created company demands a great deal of effort, time, energy, and devotion, just like a newborn baby. New companies have a propensity to have high operational costs and low profits, while the turnover is rather modest and still unpredictable.

The growth of the company depends on its promoter’s attitude. As the driving force of the company, he or she takes all the decisions and assumes all the economic responsibilities. As the company grows, more employees are hired in its dynamic team. Values like trustworthiness and loyalty are imparted as their belongingness with the company grows.

Growth and Complexity: Development Through Generations

A crucial period for a family business is during its expansion. There will come a stage when the family or existing management does not have either the skills or sufficient time to manage the business effectively. At a crucial time like this, external management should be introduced. In this stage, the promoter must delegate tasks, allow others to take over vital functions in the company, and hand over the power of decision-making on to others.

The typical stage of development for a family business, as it passes on from generation to generation, is when the founder passes the business on to his or her heirs. The founder must be prepared to gradually let go of his direct influence, in exchange for indirect influence through his leadership.

Maturity and Sibling Rivalry

As the business ‘matures’ and the promoter grows older, the next generation has to take over some of the responsibilities. During this shift, it is very vital that there is no conflict between siblings, as to who is awarded with what position in the business. However, primogeniture, the phenomenon of favoring the first born is often evident in big business families.

Conflict may arise from a parent’s wish to treat children equally. The founder has to then consider a fair distribution of property and the delegation of the management among all the heir’s, in such a way that the continuation of the company is not endangered.

The basic rule that should be followed is: what is good for the company is good for the family.

Principles of Managing a Family Business

Family business does not necessarily mean unprofessional business.
Accept emotions and personal relationships as unavoidable elements in the rational world of your company.
Accept the synchronicity of the family and business life cycle.
Keep family and business separate, whilst knowing that they are both sides of one coin.
Accept help in order to avoid blindness for family and business affairs.
Respect the loyalty of ‘non-family family’.
Give the company a chance.
Succession is a coin with two faces: hereditary succession and management succession.
Succession preferably implies a (mental) de-familiarization.
What is good for the company is good for the family.