A business plan is a complete documentation that sets out the strategy for achieving the goals of a new business. This document highlights the plan made by the management regarding day-to-day operations, work blueprint, and long-term milestones. A business plan presentation is done for financial backers and sometimes for higher-level management.
For this guide, we’ve compiled everything you need to know about a business plan and how an effective business plan presentation is made.
What is the purpose of a business plan?
A business plan is used both internally and externally.
Internally, the business plan is the blueprint of strategic and operational work. Operation managers in particular utilize this document to organize, plan and assess the state of a business. Externally, the business plan is the indicator of viability of the business thesis and execution plan.
Regardless of how great a business idea might be, there is simply no business that works without a hitch right from the start. There are always layers and layers of financial, managerial, technological, and operational hurdles to overcome. All of these potential challenges are researched and tackled in a business plan.
We have surmised the most significant purposes of a business plan below.
1. To secure investment for the business
Businesses come in all shapes and sizes. But all of them need capital to function. The business plan acts as a hypothesis of a business venture, detailing what market it will target, how it will generate revenue and sustain growth. Along with the industry and market analysis, the financial section of a business plan covers projections, break-even point and profit margins. The business plan lets the investors or lenders evaluate the likelihood of success of the business.
2. To set objectives & milestones
An objective keeps a business grounded in reality. It’s easy to see favorable circumstances for business owners even when there are none. By setting short-term objectives and long-term milestones, meaningful achievements can be made in the business. For example, a digital marketing business can set a short-term goal of finishing 50 projects in a year and aim to reach a milestone of 500 clients in 5 years. This helps calibrate the state of a business.
3. To identify potential weaknesses and shortcomings
A business plan includes all the weaknesses that a business can have, any shortcomings that could show up. By identifying possible weaknesses, management can prepare risk mitigation strategies and soften the impact of any blow to the business.
4. To assist with critical decision making
Operating and managing a business is an endless cycle of crisis management and tough decision-making. A business plan contains potential risks, marketing strategies, financial details, and industry analysis. All these sections are crucial in helping to make informed choices.
5. To aid and assist management
How do you design the operational process of a business? How do you manage finance? How do you recruit new employees? All these questions concern the management of a business and all the answers fall under the constraints set out in the business plan. Even after its initial use, the business plan continues to be used by Operation managers to regulate daily work.
Business plan presentation template
Typically, there are three broad categories to consider before making a business plan. These categories vary on size, function, and depth of content of the business.
- Summary Business Plan – This type of business plan is brief and simple. It should be no more than 10-15 pages. In those pages, the plan should be able to summarize the various details of the business without being bogged down in too many details. This type of business plan is best used for early ventures.
- Full Business Plan – A full business plan is prepared when new ventures are looking to find funding for their operation. This kind of plan is usually 25-35 pages long and is much more descriptive than a summary business plan. The document outlines the ‘blueprint’ for the day-to-day operations of the business.
- Operational Business Plan – It is meant to be used exclusively by operation managers for internal purposes. It is the most detailed business plan among all three categories and can be anywhere between 40-100 pages in length.
The ideal template
Regardless of the size of your business plan, there are certain topics that cannot be missed in the research and presentation of a business plan. We’ve broken down these topics and their significance below.
Section 1: Introduction and Analysis
1.1 Executive Summary
The executive summary introduces the business plan. It is a summarization of everything the document contains. The potential for long-term growth and profitability is discussed here in brief. A reader should be able to figure out all the topics covered in the business plan by reading this section.
1.2 Industry Analysis
Now we get into the details! An industry analysis portrays the current state of the existing businesses in the industry, the potential for growth, trends of the industry, and how other firms are structured. This section should also perform research on the participants of the industry. Industry participants are the parties that are involved in the production or purchase of services. For example, in the Tourism industry participants can be travel agencies, hotels, and restaurants, tourists, airlines, etc.
Key factors that affect the success of a business are also discussed here. Such factors can be public perception, government policies, etc.
1.3 Company Description
A company description is a detailed documentation of the history, services offered, and state of the company. Besides these points, this topic also discusses the current state and vision for the future of the company. If the company has been around for a while, it can also discuss milestones that have already been achieved. Furthermore, the company description also states the legal status of the business and its ownership.
There are two key questions to answer in the segment. The mission of the company and its vision.
Mission (present) – “HOW you will get to where you want to be”.
Vision (future) – “WHERE you want to be.”
Section 2: Market, Marketing & Production Analysis
2.1 Market Analysis
This topic of research is focused exclusively on researching the market. A market is composed of consumers and competition. Naturally, market analysis is done to determine the behavior of consumers and the existing competition.
Predictions of the market can be done in 2 significant ways:
- A top-down forecast attempts to calculate the share of the market that a company can expect to capture in the existing conditions.
- A bottom-up forecast estimates the future performance of a company’s units (e.g. products sold, no of customers).
Naturally, neither of these forecasts is 100% accurate. However, they establish a minimum threshold of expectation.
2.2 Economics of the business
Once the market analysis is tackled, two things can be determined.
- Revenue drivers & profit margins (usually for 2-3 years in the future).
- Contribution margin per product/ service (Determined by deducting variable costs from revenue).
2.3 Marketing Plan
Business plans should naturally discuss the marketing plan. A marketing plan is the set of strategies that are applied when promoting a product or service. The plan should include budgeting, the platform for marketing, and strategies adopted by existing businesses. After gathering all this information, a suitable marketing plan can be adopted for the business.
A balanced marketing plan will help a business expand much more quickly, this is vital for newer businesses as many fledgling businesses struggle to find new consumers in the early years.
2.4 Design and Development Plan
At its very core, every business exists to provide a particular service or product to the consumer. The design and development plan is a description of the product’s design and its development cycle. The planning is done taking in context the cost of production, required manpower, and other resources. This analysis is used to create a development budget for the company.
Section 3: Operations, Management & Scheduling
3.1 Operations Plan
This particular topic is far more detailed than any preceding it. It outlines how the employees of a business work in a day-to-day manner. Businesses can have multiple departments working on different things. The operations plan should detail all duties and responsibilities. The plan helps provide structure, create a workflow and set authority in the business.
It contributes to streamlining the business from day one. This analysis is mostly used by the Operations Manager.
3.2 Management Team
The top-level management of the business should be decided right at the inception. This eases the investor’s confidence. Having a fixed management system means there are no conflicts in the future. This also helps the business hierarchy. These top-level managers are responsible for setting the business strategy.
It’s also quite common for investors to skip most of the business plan and focus on the management. This is done to assess the individuals who are starting the venture.
3.3 Overall Schedule & Milestones
An overall schedule is the time duration that the management has estimated will be required to attain specific goals. Milestones help gauge whether the business is on the right track. It is critical that milestones are reached for the success of the business.
Section 4: Finance
4.1 Financial Projections
There are two questions that a financial projection seeks to answer:
- Is the company in good financial shape?
- Are the assets and cash being utilized to maximum efficiency?
The answer to these questions determines whether the business is suitable for investment. To supplement these questions, the projections of profits, stability of market and liquidity of business is also considered.
Calculating various indicators of the financial state
There are several indicators to gauge the financial state of a business. Following are six essential ratios we suggest to include in the business plan:
- Average total assets = Beginning total + Ending total / 2
- Average shareholder’s equity = Beginning equity + Ending equity / 2
- Return of Assets (ROA) = Net income / Average total assets
- Return of Equity(ROE) = Net income / Average shareholder’s equity
- If ROA > Interest Rate, this indicates positive financial leverage. Use of debt is encouraged.
- If ROA < Interest Rate, this indicates negative financial leverage. In this case, it is more convenient to use equity.
Business plan Powerpoint presentation: Dos and Don’ts
Here’s what to keep in mind when making a Powerpoint presentation for a business plan:
- Include charts, statistics, and graphs to provide insights visually. Use these sparingly so that your audience does not lose interest.
- Highlight the most essential points of analysis. This catches the eye of your audience.
- Use large font sizes for readability. Presentations should be clear to read and follow for everyone
- Use simple colors and fonts consistently for clarity.
- Do not overwhelm your audience with too much information at once. Powerpoints should only highlight the most important points.
- Do not rely on Powerpoint alone. It’s best to have a thorough business plan in document format as well.
We strongly recommend that business plans be made in document format for digital sharing and distribution. Powerpoints should only be used as the general overview of the business plan.
We believe this guide and its sections of research form a comprehensive business plan. A competent business plan accurately depicts the present and the future of a business. It indicates the strength of management, the challenges that the business might face, and the likelihood of the business succeeding. Simply put, your business needs a business plan.
If you’re still learning the ropes of business, contracts will ease your pain quite a bit! We have a collection of free contract templates that might be of use to your business! For more on business documentation, check out our blog!
Business Plan FAQs
Does a business plan presentation remain the same for different audiences?
Yes, the general template of a business plan remains the same. However, the style of presentation may differ.
How to start a business plan presentation?
Always start a presentation with the company name and logo. This is followed by the executive summary.
What financials should a business plan presentation include?
Business plans should include profit projections, liquidity of business, assets, and equity.
What is a business continuity plan?
It’s a document that strategizes how a business will continue operation in case of unplanned disruption.
How long does it take to write a business plan?
Business plans can take a few weeks or even months to write, depending on the type of business plan. Often, you might have to do several types of research over a long period of time.
How to do market research for a business plan?
This research is done by analyzing existing businesses in the market, their share of the consumers, the demand of consumers, and their potential for growth.
What do investors look for in a business plan?
Investors generally look for strong management with experience and a proven track record in a business plan.
Why have a business plan?
Business plans help you strategize, organize day-to-day operations and reassure investors regarding goals and milestones attained by the company.