Different types of business plans

The structure, content and depth of a business plans depends on many factors, such as:

• The main objective of the business plan;
• The stage of the business (start-up or existing company or spin-off);
• Type of business/industry;
• Financing situation;
• Size of the company, etc.

 
The brief discussion below gives some examples of relevant factors.
 
Type of business/industry:
If you are in trade, your business plan will not be dealing with issues such as manufacturing process or investments in machinery. You will put more emphasis on obtaining funds to finance the building up of your procurement and sales network and pre-financing the goods you will be trading with. The mix of products and services to be offered can also affect the content of a plan. Issues relating to inventory, storage and so forth become less significant as the product/service mix moves towards a pure service business. In any case, your business plan should cover standard issues such as development of human resources and marketing.


Sole ownership:
 If you are a sole proprietor of a small business, perhaps you will be drafting the entire business plan yourself. For a small business, the size, complexity and effort spent in producing the business plan have to be kept within limits. In such a case the business plan has to put emphasis on your own person. Personal financial information may be required in order to support your statement that you will be allocating a certain part of your own funds as an investment in the business. You should also provide specific details regarding any personal non-financial assets that you plan to use in your business.


Transnational corporation:
The corporate business plan of a transnational corporation with an annual sales volume of several billion Naira does not put emphasis on the same issues as an average medium-size company with an annual turnover of a few million dollars. Issues covered in the business plans of transnational corporations are:
 

• Global image promotion strategies;
• Expansion through acquisition of other companies/mergers, etc.;
• Analysis of global macroeconomic developments and international politics that are likely to influence the business;
• Prediction of long-term trends and developments in demographic, social and consumer behaviour;
• Long-term product development (5 to10 years or beyond);
• Government relations and lobbying policies.

Issues of less significance for corporate business plans are perhaps the following:

• Production techniques (such corporations have many different types of products);
• Sales tactics (these could vary in different continents/countries);
• Staff policy (with perhaps the exception of top management in the different countries, etc.).
   

Divisional business plan:
The plan of a business division (unit) of a large corporation does not differ much from the business plan of an independent company. However, in addition to the standard issues covered in the business plan (production, sales, resources, etc.), it has to cover all issues of interfaces and synergies with the other units of the corporation.


Start-up business:
If you are just starting, you face a special challenge because you do not have an established track record. Instead, you must concentrate heavily on your ability to sell yourself and the partners that you may have as potentially successful businesspersons. It does not matter whether you are using your business plan in an effort to obtain financing or to convince prospective employees to come to work for you. You need to convince whoever reads your plan that your business idea is going to be a success. In essence, your ability to sell yourself is a substitute for the historical information that does not exist. Therefore, your plan should include personal information about all persons involved in the start-up venture (previous occupation, experience, business achievements, etc.), instead of the historical information that an ongoing business would be able to provide.
 
 
As is the case of an established business, you also need to provide projected profit and loss statements and a cash flow plan. These documents quantify the results you expect to achieve through your operations. Be sure to include any start-up costs that will be incurred prior to the opening of your business. While your business will probably involve certain expenses that are unique to your industry, do not forget some of the more common start-up expenses such as:

• Professional fees (legal or accounting);
• Regulatory charges (licensing, company registration costs, etc.);
• Deposits for rented space;
• Market study.

Credit: Utibe Etim