Finding the Right Plan for You

Business plans tend to have a lot of elements in common, like cash flow projections and marketing plans. And many of them share certain objectives as well, such as raising money or persuading a partner to join the firm. But business plans are not all the same any more than all businesses are.

Depending on your business and what you intend to use your plan for, you may need a very different type of business plan from another entrepreneur. Plans differ widely in their length, their appearance, the detail of their contents, and the varying emphases they place on different aspects of the business.

The reason that plan selection is so important is that it has a powerful effect on the overall impact of your plan. You want your plan to present you and your business in the best, most accurate light. That's true no matter what you intend to use your plan for, whether it's destined for presentation at a venture capital conference, or will never leave your own office or be seen outside internal strategy sessions.

When you select clothing for an important occasion, odds are you try to pick items that will play up your best features. Think about your plan the same way. You want to reveal any positives that your business may have and make sure they receive due consideration.

Types of Plans
Business plans can be divided roughly into four separate types. There are very short plans, or miniplans. There are working plans, presentation plans and even electronic plans. They require very different amounts of labor and not always with proportionately different results. That is to say, a more elaborate plan is not guaranteed to be superior to an abbreviated one, depending on what you want to use it for.

• The Miniplan. A miniplan may consist of one to 10 pages and should include at least cursory attention to such key matters as business concept, financing needs, marketing plan and financial statements, especially cash flow, income projection and balance sheet. It's a great way to quickly test a business concept or measure the interest of a potential partner or minor investor. It can also serve as a valuable prelude to a full-length plan later on.

Be careful about misusing a miniplan. It's not intended to substitute for a full-length plan. If you send a miniplan to an investor who's looking for a comprehensive one, you're only going to look foolish.

• The Working Plan. A working plan is a tool to be used to operate your business. It has to be long on detail but may be short on presentation. As with a miniplan, you can probably afford a somewhat higher degree of candor and informality when preparing a working plan.

A plan intended strictly for internal use may also omit some elements that would be important in one aimed at someone outside the firm. You probably don't need to include an appendix with resumes of key executives, for example. Nor would a working plan especially benefit from, say, product photos.

Fit and finish are liable to be quite different in a working plan. It's not essential that a working plan be printed on high-quality paper and enclosed in a fancy binder. An old three-ring binder with "Plan" scrawled across it with a felt-tip marker will serve quite well.

Internal consistency of facts and figures is just as crucial with a working plan as with one aimed at outsiders. You don't have to be as careful, however, about such things as typos in the text, perfectly conforming to business style, being consistent with date formats and so on. This document is like an old pair of khakis you wear into the office on Saturdays or that one ancient delivery truck that never seems to break down. It's there to be used, not admired.

• The Presentation Plan. If you take a working plan, with its low stress on cosmetics and impression, and twist the knob to boost the amount of attention paid to its looks, you'll wind up with a presentation plan. This plan is suitable for showing to bankers, investors and others outside the company.

Almost all the information in a presentation plan is going to be the same as your working plan, although it may be styled somewhat differently. For instance, you should use standard business vocabulary, omitting the informal jargon, slang and shorthand that's so useful in the workplace and is appropriate in a working plan. Remember, these readers won't be familiar with your operation. Unlike the working plan, this plan isn't being used as a reminder but as an introduction.

You'll also have to include some added elements. Among investors' requirements for due diligence is information on all competitive threats and risks. Even if you consider some of only peripheral significance, you need to address these concerns by providing the information.

The big difference between the presentation and working plans is in the details of appearance and polish. A working plan may be run off on the office printer and stapled together at one corner. A presentation plan should be printed by a high-quality printer, probably using color. It must be bound expertly into a booklet that is durable and easy to read. It should include graphics such as charts, graphs, tables and illustrations.

It's essential that a presentation plan be accurate and internally consistent. A mistake here could be construed as a misrepresentation by an unsympathetic outsider. At best, it will make you look less than careful. If the plan's summary describes a need for $40,000 in financing, but the cash flow projection shows $50,000 in financing coming in during the first year, you might think, "Oops! Forgot to update that summary to show the new numbers." The investor you're asking to pony up the cash, however, is unlikely to be so charitable.

• The Electronic Plan. The majority of business plans are composed on a computer of some kind, then printed out and presented in hard copy. But more and more business information that once was transferred between parties only on paper is now sent electronically. So you may find it appropriate to have an electronic version of your plan available. An electronic plan can be handy for presentations to a group using a computer-driven overhead projector, for example, or for satisfying the demands of a discriminating investor who wants to be able to delve deeply into the underpinnings of complex spreadsheets.

Source: The Small Business Encyclopedia, Business Plans Made Easy, Start Your Own Business and Entrepreneur magazine.

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Who Needs a Business Plan?

About the only person who doesn't need a business plan is one who's not going into business. You don't need a plan to start a hobby or to moonlight from your regular job. But anybody beginning or extending a venture that will consume significant resources of money, energy or time, and that is expected to return a profit, should take the time to draft some kind of plan.

• Startups. The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many, many great companies had their starts on paper, in the form of a plan that was used to convince investors to put up the capital necessary to get them under way.

  Most books on business planning seem to be aimed at these startup business owners. There's one good reason for that: As the least experienced of the potential plan writers, they're probably most appreciative of the guidance. However, it's a mistake to think that only cash-starved startups need business plans. Business owners find plans useful at all stages of their companies' existence, whether they're seeking financing or trying to figure out how to invest a surplus.

• Established firms seeking help. Not all business plans are written by starry-eyed entrepreneurs. Many are written by and for companies that are long past the startup stage. WalkerGroup/Designs, for instance, was already well-established as a designer of stores for major retailers when founder Ken Walker got the idea of trademarking and licensing to apparel makers and others the symbols 01-01-00 as a sort of numeric shorthand for the approaching millennium. Before beginning the arduous and costly task of trademarking it worldwide, Walker used a business plan complete with sales forecasts to convince big retailers it would be a good idea to promise to carry the 01-01-00 goods. It helped make the new venture a winner long before the big day arrived. "As a result of the retail support up front," Walker says, "we had over 45 licensees running the gamut of product lines almost from the beginning."

These middle-stage enterprises may draft plans to help them find funding for growth just as the startups do, although the amounts they seek may be larger and the investors more willing. They may feel the need for a written plan to help manage an already rapidly growing business. Or a plan may be seen as a valuable tool to be used to convey the mission and prospects of the business to customers, suppliers or others.

Plan an Updating Checklist
Here are seven reasons to think about updating your business plan. If even just one applies to you, it's time for an update.

1. A new financial period is about to begin. You may update your plan annually, quarterly or even monthly if your industry is a fast-changing one.
2. You need financing, or additional financing. Lenders and other financiers need an updated plan to help them make financing decisions.
3. There's been a significant market change. Shifting client tastes, consolidation trends among customers and altered regulatory climates can trigger a need for plan updates.
4. Your firm develops or is about to develop a new product, technology, service or skill. If your business has changed a lot since you wrote your plan the first time around, it's time for an update.
5. You have had a change in management. New managers should get fresh information about your business and your goals.
6. Your company has crossed a threshold, such as moving out of your home office, crossing the $1 million sales mark or employing your 100th employee.
7. Your old plan doesn't seem to reflect reality any more. Maybe you did a poor job last time; maybe things have just changed faster than you expected. But if your plan seems irrelevant, redo it.

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An Introduction to Business Plans

Why is a business plan so vital to the health of your business? Read the first section of our tutorial on How to Build a Business Plan to find out.

A business plan is a written description of your business's future. That's all there is to it--a document that desribes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan.

Business plans can help perform a number of tasks for those who write and read them. They're used by investment-seeking entrepreneurs to convey their vision to potential investors. They may also be used by firms that are trying to attract key employees, prospect for new business, deal with suppliers or simply to understand how to manage their companies better.

So what's included in a business plan, and how do you put one together? Simply stated, a business plan conveys your business goals, the strategies you'll use to meet them, potential problems that may confront your business and ways to solve them, the organizational structure of your business (including titles and responsibilities), and finally, the amount of capital required to finance your venture and keep it going until it breaks even.

Sound impressive? It can be, if put together properly. A good business plan follows generally accepted guidelines for both form and content. There are three primary parts to a business plan:

• The first is the business concept, where you discuss the industry, your business structure, your particular product or service, and how you plan to make your business a success.
• The second is the marketplace section, in which you describe and analyze potential customers: who and where they are, what makes them buy and so on. Here, you also describe the competition and how you'll position yourself to beat it.
• Finally, the financial section contains your income and cash flow statement, balance sheet and other financial ratios, such as break-even analyses. This part may require help from your accountant and a good spreadsheet software program.

Breaking these three major sections down even further, a business plan consists of seven key components:

1. Executive summary
2. Business description
3. Market strategies
4. Competitive analysis
5. Design and development plan
6. Operations and management plan
7. Financial factors

In addition to these sections, a business plan should also have a cover, title page and table of contents.

How Long Should Your Business Plan Be?
Depending on what you're using it for, a useful business plan can be any length, from a scrawl on the back of an envelope to, in the case of an especially detailed plan describing a complex enterprise, more than 100 pages. A typical business plan runs 15 to 20 pages, but there's room for wide variation from that norm.

Much will depend on the nature of your business. If you have a simple concept, you may be able to express it in very few words. On the other hand, if you're proposing a new kind of business or even a new industry, it may require quite a bit of explanation to get the message across.

The purpose of your plan also determines its length. If you want to use your plan to seek millions of dollars in seed capital to start a risky venture, you may have to do a lot of explaining and convincing. If you're just going to use your plan for internal purposes to manage an ongoing business, a much more abbreviated version should be fine.

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Maruti Kizashi launched at Rs 16.5 - 17.5 lakhs

The top most car manufacturer in India Maruti Suzuki launched its Kizashi luxury sedan priced for Rs17.5lakhs. The engine is set to have the power of 2.4 lit, with the specifications of 178PS, @6500rpm, and 230Nm torque @4000rpm and is derived from the Japanese apex facility. The MD and CEO of Maruti Suzuki India said that the launch of this car is a major step forward by offering the global standards to the top-end customers in India. There will be two versions of Kizashi sedan at Rs16.5 lakh (manual transmission) and Rs17.5 lakh for automatic transmission.

The company’s Managing Executive Officer explained that this Maruti Kizashi is the latest offering from Maruti in the upper segment, to be claimed as A4 with A5 features. Incidentally this sedan is positioned as the sports luxury car with classy engine to yield the utmost power range. The additional features of Maruti Suzuki Kizashi, are electronic stability programme, ABS, cruise control, EBD and 10-way seat adjustment. The manual version of the car has the acceleration of 0-100km /h within 7.8 seconds and the CVT version has the acceleration with the time of 8.8 seconds. The corresponding speed is 215km/h for the manual version while it is 205 km/hr for CVT version. The car is set capable of running 12.53km per lit for the CVT and 12.45 km/lit for manual version.

He further said Maruti has designed this car for the exclusive customers of Kizashi with altogether different modes of sales and service. The bookings are on already for which the delivery will be made in March , it is learnt. Maruti is deriving this car as a CBU and will counter the likes of Honda Accord, VW Jetta and Skoda Laura. With the new aim of launching a new car for every year, this year there will be new Swift and SX4 diesel, he said. He cleared that the company will retain the strategy adopted in 2008 when the excise duty was revised by the government. He convinced that the long wait for the deliveries of some model has become inevitable inspite of efforts taken.


The company has increased the production of Swift to 12000 per month from the earlier 5000 units. So is the case of Dzire whose number has been increased to 8000 from 2000 units a month and that of Eeco from 2000 to 7000 units a month. He was happy that the customers have that much of patience to get the vehicles which they love. Maruti is setting up a new facility this year to increase the production he added.

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Mercedes Benz Maybach In India

German car manufacturer Mercedes-Benz is contemplating on relaunch of its Maybach for the Indian market. The move comes in the wake of rising demand for the super rich cars in the market. Mercedes Benz Maybach is capable of running at 275km/hr speed and Mercedes may fix the price of this car as Rs51 million in India. The company’s Chief Executive said the Indian luxury car has such a dearth for supercars as the cost may be on par private jets.

The analysis of the last year’s economy by Forbes revealed that there have been 17 new billionaires in the Indian population adding to the already existing to make it 69. As a partner of Daimler AG, Mercedes has sold 200 Maybach in the world market under two models – Maybach 57 S and 62. In the Chinese car market Mercedes has been selling 20 units of this Maybach but as of now there is no fixed target for India.

The executive said since its launch in 2004 Maybach has been moving at its own speed and for the Indian car market it is too early. But the company intends for a second push, he added. In the event of the launch of this Mercedes Benz Maybach in India, Mercedes would face VWAG’s Bentley and BMW’s Rolls Royce in this sector. This strategy is to migrate to newer markets as the developed markets have come to soft pedaling.

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10 new models from Mahindra this year

Looking to build on the sales momentum achieved so far this fiscal, Mahindra & Mahindra (M&M) today said it plans to launch 8-10 new products, including a premium sports utility vehicle, across various segments by March 2012.

"From this year to the end of March 2012, there will be a slew of products launched across passenger and commercial vehicles segments," Mahindra & Mahindra (M&M) President (Auto and Farm Sectors) Pawan Goenka told reporters here.

Already the company has started with the launch of pick-up vehicle 'Genio' last month. There will be about 8-10 substantial new products, including variants and refreshes, launched during the period, he added.

The highlight will be a premium sports utility vehicle (SUV), which will be positioned above its existing 'Scorpio'.

"With the new SUV, we will be moving up the chain. This will be a completely new vehicle on a brand new platform and will be launched by the third quarter of this calendar year," Goenka said.

The company has invested about Rs 600 crore on developing the vehicle platform, he added.

Goenka said there would be new products and variants from the 'Maxximo' and 'Ingenio' platforms besides new trucks and tippers from M&M's joint venture with Navistar.

In the April-January period this fiscal, M&M has posted 26.22 per cent increase in domestic sales at 2,90,566 units as against 2,30,189 units in the same period last fiscal.

When asked about sales prospects for the new fiscal, Goenka said overall the industry growth that has been achieved in this fiscal so far is unlikely to be sustained.

"The auto industry has been seeing around 30 per cent sales growth. We expect it to be around 15-18 per cent next fiscal," said Goenka, who is also the president of Society of Indian Automobile Manufacturers.

He, however, said if interest rates and commodity prices changed adversely, then growth could be impacted.

For the farm equipment segment, he said tractor sales have seen a growth of 20 per cent so far this fiscal and is likely to come down to 10-12 per cent in the next fiscal.

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