By Leon Jenkins, The Business Coach
1. An abbreviated business plan is quicker to put together than a comprehensive business plan.
2. An abbreviated business plan gives you a basic roadmap for your business which is better than no guidance at all.
3. An abbreviated business plan can serve as a base for a long-form business plan that you’ll write later — similar to using an outline to write up a report.
4. An abbreviated business plan is easy to update.
How to Format an Abbreviated Business Plan
1. Executive Summary
In a short paragraph or two, summarize the key aspects of your business. Your summary needs to be written in easy to understand wording and include:
A. What is your business?
B. What is your product or service?
C. Who will be part of the management team that sees to the success of your business?
D. Why do your believe you are equipped to champion your business success; what are your skillsets?
E. Where will the business operate from?
F. What do you believe it will take to get started?
G. Why do you believe your business will make you money or give you income beyond just operating the business?
2. Product or service
A. In greater detail, what you will sell or provide for the customer?
B. Explain your pricing structure … How are your prices determined?
C. Possibly include or be able to show your product …. or be able to demonstrate or provide verification that you can successfully provide the service.
3. Competition & Marketing
A. Identify your competition. How do they operate? Where are they located, etc.? How do their prices compare to yours? B. Briefly present your Marketing Strategy; how are you going to get customers or advertise to achieve your targeted market share?
4. Cash flow & Financial
A. Describe your business’ monthly income and expenses (month by month) for the first six months of operation.
1) Income: what items were sold and how many or, for services rendered, what will be done and how much.
2) Expenses: be as detailed as possible instead of just summarizing a total. (lease/rent, telecom, advertising, salaries, supplies, etc.)
B. Give an example of how you will be recording or documenting your business transactions. Clearly identify your record keeping method (possibly including examples of invoices, receipts, ledgers, spread sheets, computer program printouts, etc.)
C. Identify those contracted to assist you in keeping records, doing taxes, etc.
5. Detail what is required to get the business going, to include the following:
A. Item or services that must be purchased by name and description; brand, model, color, SKU number, etc.
B. Where the item or service can be obtained.
C. Why the item or service is required.
D. What the exact cost of the item or service is.
E. Who will pay for the item or service that is needed.
6. Conclusion: Write your concluding statement.
A. Identify how you are going to know whether or not the business is succeeding.
B. Address how you will know whether or not you need to discontinue the business.
C. Cover start-up capital available as highlighted on your financial statements.
7. Additional documentation:
A. If the business is a partnership or shared venture, be sure to attach copies of the partnership agreements.
B. Consider including copies of Management Team biographies.
Once you have completed your abbreviated business plan, make sure that it covers all the following areas as a minimum.
- The markets that you serve.
- The ultimate market opportunity currently available to you.
- Your most direct competitors.
- The experience and expertise you and your management team bring to the table.
- Any business success you have experienced to date.
- Your pro forma statements for the next 3-5 years. (The details included about your pro forma statements in your abbreviated plan is at your discretion, but showing revenue, profit & loss (P&L), and balance sheet data is a good idea.)