Posts Tagged ‘internal business plan’
Choosing the Right Business Plan for Your Company
Tuesday, January 29th, 2008
Whether your business is a start-up or a quickly-expanding enterprise, creating a business plan is a great way to see exactly where your business is, where you’d like it to go or how you can get it off the ground. Whether the purpose is to obtain funding, organize growth patterns or to test the feasibility of a venture, a business plan is the best way to put your ideas down on paper with the factual numbers to back them up. However, there is no one-size-fits-all business plan. Different purposes require different information and formats - and therefore a different type of business plan.
While there are many different types of business plans, there are two main categories:
* External business plans are shown to banks, venture capitalists, potential merger companies, etc. in order to seek loans, investments, a merger or an acquisition.
* Internal business plans are for the use of planning or expanding the company and are typically shown to business owners and managers. Because internal plans are shown only to company insiders, there’s no need for a detailed company description or background financial information.
The Most Common Types of Business Plans
Start-up Plan (External) - This is the most basic of business plans because it is merely providing an outline of the new business. It should begin with an executive summary and include a detailed description of the business idea, competition, owner(s)’ business experience and background, market, marketing strategy, etc. The financial section should cover projected sales and expenses as well as a profit and loss statement, balance sheet, monthly projections for the first year and a cash flow statement.
Investment Plan (External) - The purpose of this plan is to obtain an investment or loan from a bank, venture capitalist or private investor. This plan differs from a start-up plan because it is used when the company is already operational. Instead of forecasts and predictions (as seen with a start-up plan) an investment plan relies heavily on actual financial and sales information, such as an income statement, balance sheet, profit and loss statement, cash flow statement, etc.
Growth / Expansion Business Plan (External or Internal) - Depending on the purpose this plan is used for, this can either be for internal or external use. Both, however, should include a comprehensive strategy detailing the expansion along with a monthly forecast of sales and expenses.
Strategic Business Plan (Internal) - This plan is more of an outline that focuses on the company’s long-term goals and the steps necessary to achieve them.
Marketing Plan (Internal) - Requiring extensive research on target markets, market trends, and competition, a marketing plan is essential for growing companies in need of a marketing outline and budget. It should include a detailed analysis of the company’s targeted consumers as well as complementary marketing, advertising and PR strategies. This type of plan may or may not include results from focus groups and consumer surveys. Read more on developing a marketing plan .
Annual Plan (Internal) - Usually created in a company’s financial third quarter, it outlines the financial growth and sales goals that a company hopes to achieve over the next year. This type of plan tends to have specific deadline dates, tasks and responsibilities.
Once you realize that a business plan can be tailored to your business’ needs and not the other way around, creating one is a lot less intimidating. Business plans can be an invaluable tool, both for company insiders and outsider investors. While they may take some time to create, the information they present is well worth the effort.
Tags: advice, business plan, Carrie Hinkel, external business plan, internal business plan, planning, Starting a Business, startups, strategy, tips
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