• 11.4 The Business Plan
  • Introduction
  • 1.1 Entrepreneurship Today
  • 1.2 Entrepreneurial Vision and Goals
  • 1.3 The Entrepreneurial Mindset
  • Review Questions
  • Discussion Questions
  • Case Questions
  • Suggested Resources
  • 2.1 Overview of the Entrepreneurial Journey
  • 2.2 The Process of Becoming an Entrepreneur
  • 2.3 Entrepreneurial Pathways
  • 2.4 Frameworks to Inform Your Entrepreneurial Path
  • 3.1 Ethical and Legal Issues in Entrepreneurship
  • 3.2 Corporate Social Responsibility and Social Entrepreneurship
  • 3.3 Developing a Workplace Culture of Ethical Excellence and Accountability
  • 4.1 Tools for Creativity and Innovation
  • 4.2 Creativity, Innovation, and Invention: How They Differ
  • 4.3 Developing Ideas, Innovations, and Inventions
  • 5.1 Entrepreneurial Opportunity
  • 5.2 Researching Potential Business Opportunities
  • 5.3 Competitive Analysis
  • 6.1 Problem Solving to Find Entrepreneurial Solutions
  • 6.2 Creative Problem-Solving Process
  • 6.3 Design Thinking
  • 6.4 Lean Processes
  • 7.1 Clarifying Your Vision, Mission, and Goals
  • 7.2 Sharing Your Entrepreneurial Story
  • 7.3 Developing Pitches for Various Audiences and Goals
  • 7.4 Protecting Your Idea and Polishing the Pitch through Feedback
  • 7.5 Reality Check: Contests and Competitions
  • 8.1 Entrepreneurial Marketing and the Marketing Mix
  • 8.2 Market Research, Market Opportunity Recognition, and Target Market
  • 8.3 Marketing Techniques and Tools for Entrepreneurs
  • 8.4 Entrepreneurial Branding
  • 8.5 Marketing Strategy and the Marketing Plan
  • 8.6 Sales and Customer Service
  • 9.1 Overview of Entrepreneurial Finance and Accounting Strategies
  • 9.2 Special Funding Strategies
  • 9.3 Accounting Basics for Entrepreneurs
  • 9.4 Developing Startup Financial Statements and Projections
  • 10.1 Launching the Imperfect Business: Lean Startup
  • 10.2 Why Early Failure Can Lead to Success Later
  • 10.3 The Challenging Truth about Business Ownership
  • 10.4 Managing, Following, and Adjusting the Initial Plan
  • 10.5 Growth: Signs, Pains, and Cautions
  • 11.1 Avoiding the “Field of Dreams” Approach
  • 11.2 Designing the Business Model
  • 11.3 Conducting a Feasibility Analysis
  • 12.1 Building and Connecting to Networks
  • 12.2 Building the Entrepreneurial Dream Team
  • 12.3 Designing a Startup Operational Plan
  • 13.1 Business Structures: Overview of Legal and Tax Considerations
  • 13.2 Corporations
  • 13.3 Partnerships and Joint Ventures
  • 13.4 Limited Liability Companies
  • 13.5 Sole Proprietorships
  • 13.6 Additional Considerations: Capital Acquisition, Business Domicile, and Technology
  • 13.7 Mitigating and Managing Risks
  • 14.1 Types of Resources
  • 14.2 Using the PEST Framework to Assess Resource Needs
  • 14.3 Managing Resources over the Venture Life Cycle
  • 15.1 Launching Your Venture
  • 15.2 Making Difficult Business Decisions in Response to Challenges
  • 15.3 Seeking Help or Support
  • 15.4 Now What? Serving as a Mentor, Consultant, or Champion
  • 15.5 Reflections: Documenting the Journey
  • A | Suggested Resources

Learning Objectives

By the end of this section, you will be able to:

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Business plan that includes an executive summary, business description, market strategies, marketing plan, competitive analysis, operations and management plan, financial analysis, and design and development plan.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Competitor analysis comparing five different restaurants by price, location, quality, and food type. La Vida Lola sells Latin food of mid to high quality at a variety of locations for between six and 13 dollars. Mix’D Up Burgers sells American food/burgers of low quality at both rotating and Smyrna locations for around ten dollars. Mac the Cheese sells American comfort food of mid quality at rotating locations for between ten and thirteen dollars. The Fry Guy sells American food of high quality in Buckhead for at minimum thirteen dollars. The Blaxican sells soul/Mexican fusion food of high quality in Midtown at high prices.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Cash flow template that tracks income for every day of the week and expenses. Fixed monthly expenses include facility rental, personal loans, insurance, credit cards, Farmer’s Market overheads, planned savings, and other. Variable monthly expenses include food/beverages, utilities (electricity, gas), uniforms, wages, fuel (vehicle), medical expenses, and other. Fixed infrequent expenses included insurance, annual subscriptions, property rates/taxes, union fees, education, and other. Variable infrequent expenses include gifts, holidays, vehicle repairs and registration, durable goods purchase, donations, and other. The difference between total income and total expenses is the income available.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

Photo of Hugh Jackman.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

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Developing a Business Plan

Developing a Business Plan

An important task in starting a new venture is to develop a business plan. As the phrase suggests, a business plan is a "road map" to guide the future of the business or venture. The elements of the business plan will have an impact on daily decisions and provide direction for expansion, diversification, and future evaluation of the business.

This publication will assist in drafting your own business plan. It includes a discussion of the makeup of the plan and the information you need to develop a business plan. Business plans are traditionally developed and written by the owner with input from family members and the members of the business team. Business plans are "living" documents that should be reviewed and updated every year or if an opportunity for change presents itself. Reviews reinforce the thoughts and plans of the owner and the business, and aid in the evaluation process. For an established venture, evaluation determines if the business is in need of change or if it is meeting the expectations of the owners.

Using the Proper Format

The presentation of the plan should be as professional as possible to portray your business in a positive manner. When dealing with a lender or possible investor, the plan will be reviewed for accuracy and suggestions for changes to the plan may be offered. The decision to recommend the loan to the appropriate committee or reject the proposal will be largely based on your business plan. Often loan officers will not know a great deal about the proposed venture, but they will know the correct structure of a business plan. Investors will make their decision based on the plan and the integrity of the owner. For this reason, it is necessary to use a professional format. After loan officers complete their evaluations, the loan committee will further review the business plan and make a decision. The committee members will often spend limited time reviewing the document, focusing on the message of the executive summary and financial statements to make their determination. Because of this, these portions need to be the strongest parts of the plan and based on sound in-depth research and analysis.

Sections of the Business Plan

A business plan should be structured like a book with the title or cover page first, followed by a table of contents. Following these two pages, the main parts of the plan normally appear in this order: executive summary, business mission statement, goals and objectives, background information, organizational matters, marketing plan, and financial plan.

Executive Summary

The executive summary is placed at the front of the business plan, but it should be the last part written. The summary describes the proposed business or changes to the existing business and the sector of which the business is (or will be) a part. Research findings and recommendations should be summarized concisely to provide the reader with the information required to make any decisions. The summary outlines the direction and future plans or goals of the business, as well as the methods that will be used to achieve these goals.

The summary should include adequate background information to support these recommendations. The final financial analysis and the assumptions used are also a part of the executive summary. The analysis should show how proposed changes will ensure the sustainability of the current or proposed business. All challenges facing the existing business or proposed venture should also be discussed in this section. Identifying such challenges shows the reader that you have explored and taken into account all considerations during the research process.

Mission, Goals, and Objectives

This section has three separate portions. It begins with a brief, general description of the existing or planned business. The overview is followed by the mission statement of the business. You should try to limit the mission statement to three sentences if possible and include only the key ideas about why the business exists. An example of a mission statement for a produce farm might be: "The mission of XYZ Produce is to provide fresh, healthy produce to our customers, and to provide a safe, friendly working environment for our employees." If you have more than three sentences, be as concise as possible.

The third (and final) portion sets the business's goals and objectives. There are at least two schools of thought about goals and objectives. One is that the goals are the means of achieving the objectives, and the other is exactly the opposite--that the objectives are the means of achieving the goals. Whichever school you follow, this is a very important part of the business plan. These goals and objectives should show the reader what the business wishes to accomplish and the steps needed to obtain the desired results. Goals or objectives should follow the acronym SMART , which stands for S pecific, M easurable, A ttainable, R easonable, and T imed, to allow for evaluation of the entire process and provide valuable feedback along the way. The business owner should continually evaluate the outcomes of decisions and practices to determine if the goals or objectives are being met and make modifications when needed.

Background Information

Background information should come from the research conducted during the writing process. This portion should include information regarding the history of the industry, the current state of the industry, and information from reputable sources concerning the future of the industry. This portion of the business plan requires the most investment of time by the writer, with information gathered from multiple sources to prevent bias or undue optimism. The writer should take all aspects of the industry (past, present, and future) and business into account. If there are concerns or questions about the viability of the industry or business, these must be addressed. In writing this portion of the plan, information may be obtained from your local public library, periodicals, industry personnel, trusted sources on the Internet, and Penn State Extension. Industry periodicals are another excellent source of up-to-date information. The more varied the sources, the better the evaluation of the industry and the business, and the greater the opportunity to have an accurate plan.

The business owner must first choose an appropriate legal structure for the business. The business structure will have an impact on the future, including potential expansion and exit from the business. If the proper legal structure is not chosen, the business may be negatively impacted down the road. Only after the decision is made about the type of business can the detailed planning begin.

Organizational Matters

This section of the plan describes the current or planned business structure, the management team, and risk management strategies. There are several forms of business structure to choose from, including sole proprietorship, partnership, corporations (subchapter S or subchapter C), cooperative, and limited liability corporation or partnership (LLC or LLP). These business structures are discussed in Starting or Diversifying an Agricultural Business .

The type of business structure is an important decision and often requires the advice of an attorney (and an accountant). The business structure should fit the management skills and style(s) of the owner (or owners) and take into account the risk management needs (both liability and financial) of the business. For example, if there is more than one owner (or multiple investors), a sole proprietorship is not an option because more than one person has invested time and/or money into the business. In this case, a partnership, cooperative, corporation, LLC, or LLP would be the proper choice.

If the business is not a sole proprietorship, the management team should be described in the business plan. The management team should consist of all parties involved in the decisions and activities of the business. The strengths and backgrounds of management team members should be discussed to highlight the positive aspects of the team. Even if the business is a sole proprietorship, usually more than one person (often a spouse, child, relative, or other trusted person) will have input into the decisions and therefore should be included as team member(s).

Regardless of the business structure, all businesses should also have an external management support team. This external management support team should consist of the business's lawyer, accountant, insurance agent or broker, and possibly a mentor. These external members are an integral part of the management team. Many large businesses have these experts on staff. For small businesses, the external management team replaces full-time experts; the business owner(s) should consult with this external team on a regular basis (at least once a year) to determine if the business is complying with all rules and regulations. Listing the management team in the business plan allows the reader to know that the business owner has developed a network of experts to provide advice.

The risk management portion of the business plan provides a description of how the business will handle unexpected or unusual events. For example, if the business engages in agricultural production, will the business purchase crop insurance? Does the business have adequate liability insurance? Is the business diversified to protect against the unexpected, rather than "putting all its eggs in one basket"? If the business has employees, does the business carry adequate workers' compensation insurance? All of these questions should be answered in the risk management portion of the business plan. More information how liability can affect your business and on the use of insurance as a risk management tool can be found in Agricultural Business Insurance and Understanding Agricultural Liability . The business structure will also determine a portion of the risk management strategy since the way that a business is structured carries varying levels of risk to the owner and/or owners. All marketing strategies (or objectives) carry a degree of risk and must be evaluated, and mitigation strategies should be included in this portion of the plan.

Marketing Plan

Every purchase decision that a consumer makes is influenced by the marketing strategy or plan of the company selling the product or service. Products are usually purchased based on consumer preferences, including brand name, price, and perceived quality attributes. Consumer preferences develop (and change) over time, and an effective marketing plan takes these preferences into account. This makes the marketing plan an important part of the overall business plan.

In order to be viable, the marketing plan must coincide with production activities. The marketing plan must address consumer desires and needs. For example, if a perishable or seasonal crop (such as strawberries) will be produced, the marketing plan should not include sales of locally grown berries in January if the business is in the northeastern United States. If the business plans to purchase berries in the off-season from other sources to market, this information needs to be included. In this way, the marketing plan must fit the production capabilities (or the capability to obtain products from other sources).

A complete marketing plan should identify target customers, including where they live, work, and purchase the product or service you are providing. Products may be sold directly to the consumer (retail) or through another business (wholesale). Whichever marketing avenue you choose, if you are starting a new enterprise or expanding on an existing one, you will need to decide if the market can bear more of what you plan to produce. Your industry research will assist in this determination. The plan must also address the challenges of the marketing strategy proposed. This portion of the plan contains a description of the characteristics and advantages of your product or service. Identifying a "niche" market will be of great value to your business.

Other variables to consider are sales location, market location, promotion and advertising, pricing, staffing, and the costs associated with all of these. All of these aspects of the marketing plan will take time to develop and should not be taken lightly. Further discussion on marketing fruits and vegetables can be found in Fruit and Vegetable Marketing for Small-scale and Part-time Growers.

An adequate way of determining the answers to business and marketing issues is to conduct a SWOT analysis. The acronym SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. Strengths represent internal attributes and may include aspects like previous experience in the business. Experience in sales or marketing would be an area of strength for a retail farm market. Weaknesses are also internal and may include aspects such as the time, cost, and effort needed to introduce a new product or service to the marketplace. Opportunities are external aspects that will help your business take off and be sustained. If no one is offering identical products or services in your immediate area, you may have the opportunity to capture the market. Threats are external and may include aspects like other businesses offering the same product in close proximity to your business or government regulations impacting business practices and costs.

Financial Plan

The financial plan and assumptions are crucial to the success of the business and should be included in the business plan. One of the foremost reasons new businesses fail is not having enough startup capital or inadequate planning to cover all expenses and be profitable. The scope of your business will be determined by the financial resources you can acquire. Because of this, you will need to develop a financial plan and create the supporting documents to substantiate it.

The financial plan has its basis in historical data (for an existing business) or from projections (for a proposed business). The first issue to address is recordkeeping. You should indicate who will keep the necessary records and how these records will be used. Internal controls, such as who will sign checks and handle any funds, should also be addressed in this section. A good rule to follow for businesses other than sole proprietorships is having at least two people sign all checks.

The next portion of the financial plan should be assumptions concerning the source of financing. This includes if (and when) the business will need additional capital, how much capital will be needed, and how these funds will be obtained. If startup capital is needed, this information should be included in this portion. Personal contributions should be included along with other funding sources. The amount of money and repayment terms should be listed. One common mistake affecting many new businesses is underfunding at startup. Owners too often do not carefully evaluate all areas of expense and underestimate the amount of capital needed to see a new business through the development stages (including living expenses, if off-farm income is not available).

Typically, a balance sheet, income statement, cash flow statement, and partial budget or enterprise budgets are included in a business plan. More information on agricultural budgets can be found in Budgeting for Agricultural Decision Making . These documents will display the financial information in a form that lending institutions are used to seeing. If these are not prepared by an accountant, having one review them will ensure that the proper format has been used.

Financial projections should be completed for at least two years and, ideally, for five years. In agricultural businesses, five-year projections are sometimes difficult to make because of variability in prices, weather, and other aspects affecting production. One way to illustrate these risks is to develop several scenarios covering a range of production assumptions. This attention to detail will often result in a positive experience with lenders because they realize that the plan covers several possible circumstances and provides insight into how the business plans to manage risk. More information on financing agricultural businesses can be found in the publication Financing Small-scale and Part-time Farms.

Financial Statements

Balance sheet.

A balance sheet is a snapshot of a business's assets and liabilities and its owner's equity at a specific point in time. A balance sheet can be prepared at any time but is usually done at the end of the fiscal year (for many businesses, this is the end of the calendar year). Evaluating the business by using the balance sheet requires several years of balance sheets to tell the true story of the business's progress over time. A balance sheet is typically constructed by listing assets on the left and liabilities and owner's equity on the right. The difference between the assets and liabilities of the business is called the "owner's equity" and provides an estimate of how much of the business is owned outright. Owner's equity provides the "balance" in a balance sheet.

Assets are anything owned by or owed to the business. These include cash (and checking account balances), accounts receivable (money owed to the business), inventory (any crops or supplies that the business has stored on farm), land, equipment, and buildings. This may also include machinery, breeding stock, small fruit bushes or canes, and fruit trees. Sometimes assets are listed as current (those easily converted to cash) and fixed (those that are required for the business to continue). Assets are basically anything of value to the business.

Balance sheets may use a market basis or a cost basis to calculate the value of assets. A market-basis balance sheet better reflects the current economic conditions because it relies on current or market value for the assets rather than what those assets originally cost. Market values are more difficult to obtain because of the difficulty in finding accurate current prices of assets and often results in the inflation of the value of assets. Cost-basis balance sheets are more conservative because the values are often from prior years. For example, a cost-basis balance sheet would use the original purchase price of land rather than what selling that land would bring today. Because purchase records are easily obtained, constructing a cost-basis balance sheet is easier. Depreciable assets, such as buildings, tractors, and equipment, are listed on the cost-basis balance sheet at purchase price less accumulated depreciation. Most accountants use the cost-basis balance sheet method. Whether you choose to use market basis or cost basis, it is critical that you remain consistent over the years to allow for accurate comparison.

Liabilities are what the business owes on the date the balance sheet is prepared. Liabilities include both current liabilities (accounts payable, any account the business has with a supplier, short-term notes, operating loans, and the current portion of long-term debt, which are payable within the current year) and non-current liabilities (mortgages and loans with a term that extends over one year).

Owner's equity is what remains after all liabilities have been subtracted from all assets. It represents money that the owner has invested in the business, profits that are retained in the business, and changes caused by fluctuating market values (on a market-basis balance sheet). Owner's equity will be affected whenever changes in capital contributed to the business or there are retained earnings; so, if your practice is to use all earnings as your "paycheck" rather than reinvesting them in the business, your owner's equity will be impacted. On the balance sheet, owner's equity plus liabilities equals assets. Or, stated another way, all of the assets less the amount owed (liabilities) equals the owner's equity (sometimes referred to as "net worth").

Income Statement

The income statement is a summary of the income (revenue) and expenses for a given accounting cycle. If the balance sheet is a "snapshot" of the financial health of the business, the income statement is a "motion picture" of the financial health of the business over a specific time period. An income statement is constructed by listing the income (or revenue) at the top of the page and the expenses (and the resulting profit or loss) at the bottom of the page.

Revenue is any income realized by the sale of crops or livestock, government payments, and any other income the business may have (including such items as fuel tax refunds, patronage dividends, and custom work). Other items affecting revenues are changes in inventory and accounts receivable between the start of the time period and the end, even if these changes are negative. Expenses include any expense the business has incurred from the production of the products sold. Examples of expenses include feed, fertilizer, pesticides, fuel, labor, maintenance and repairs, insurance, taxes, and any changes in accounts payable. Depreciation, which is calculated wear and tear on assets (excluding land), is included as an expense for accounting purposes. Interest is considered an expense, but any principal payments related to loans are not an expense.

As the income statement is created, the desired outcome is to have more income than expenses, so the income statement shows a profit. If not, the final number is shown in parentheses (signifying a negative number). Another name for this financial record is a "profit and loss statement." Income statements are one way to clearly show how the farm is making progress from one year to the next and may provide a much more optimistic view of sustainability than can be seen by looking at a single year's balance sheet.

Cash Flow Statement

A cash flow statement is the predicted flow of cash into and out of a business over a year. Cash flow statements are prepared by showing the total amounts predicted for each item of income or expense. This total is then broken down by month to show when surpluses and shortfalls in cash will occur. In this way, the cash flow statement can be used to predict when additional cash is needed and when the business will have a surplus to pay back any debt. This monthly prediction allows the owner(s) to better evaluate the cash needs of the business, taking out applicable loans and repaying outstanding debts. The cash flow statement often uses the same categories as the income statement plus additional categories to cover debt payments and borrowing.

After these financial statements are completed, the business plan writer will have an accurate picture of how the business has performed and can project how the business will perform in the coming year(s). With such information, the owner--and any readers of the business plan--will be able to evaluate the viability of the business and have an accurate understanding of actions and activities that will contribute to its sustainability. This understanding will enable the owner(s) to make better informed decisions regarding loans or investments in the business.

Putting It All Together

After the mission, background information, organization, and marketing and financial plans are complete, an executive summary can then be prepared. Armed with the research results and information from the other sections, the business will come alive through this section. The next step is to share this plan with others whose opinions you respect. Have them ask you the hard questions, making you defend an opinion you have expressed or challenging you to describe what you plan to do in more detail. Often people are hesitant to share what they have written with their families or friends because they fear the plan will not be taken seriously. However, it is much better to receive constructive criticism from family and friends (and gain the opportunity to strengthen your plan) than it is to take it immediately to the lender, only to have any problems pointed out and receive a rejection.

Once all parts of the business plan have been written, you will have a document that will enable you to analyze your business and determine which, if any, changes need to be made. Changes on paper take time and effort but are not as expensive as changing a business practice only to find that the chosen method is not viable. For a proposed venture, if the written plan points to the business not being viable, large sums of money have not been invested and possibly lost. In short, challenges are better faced on paper than with investment capital.

Remember, a business plan is a "road map" that will guide the future of the business. The best business plan is a document in continual change, reacting to the influence of the outside world on the business. Having the basis of a writ¬ten plan will give you confidence to consider changes in the business to remain competitive. Once the plan is in place, the business will have a better chance of future success.

For More Information


Abrams, R. The Successful Business Plan: Secrets and Strategies (Successful Business Plan Secrets and Strategies) . Palo Alto, Calif.: Planning Shop, 2014.

Becker, J. C., L. F. Kime, J. K. Harper, and R. Pifer. Understanding Agricultural Liability . University Park: Penn State Extension, 2011.

Dethomas, A., and L. and S. Derammelaere. Writing a Convincing Business Plan (Barron's Business Library) . Hauppauge, N.Y.: Barron's Educational Series. 2008.

Dunn, J., J. K. Harper, and L. F. Kime. Fruit and Vegetable Marketing for Small-scale and Part-time Growers. University Park: Penn State Extension, 2009.

Harper, J. K., S. Cornelisse, L. F. Kime, and J. Hyde. Budgeting for Agricultural Decision Making . University Park: Penn State Extension, 2013.

Kime, L. F., J. A. Adamik, E. E. Gantz, and J. K. Harper. Agricultural Business Insurance. University Park: Penn State Extension, 2004.

Kime, L. F., S. Roth, and J. K. Harper. Starting or Diversifying an Agricultural Business. University Park: Penn State Extension, 2004.

Lesonsky, R. Start Your Own Business: The Only Start-Up Book You'll Ever Need. 5th ed . Irvine, Calif.: Entrepreneur Media Inc., 2010.

Peterson, S. D., P. E. Jaret, and B. Findlay. Business Plan Kit for Dummies. For Dummies: Book and CD-ROM edition . Indianapolis, Ind.: Wiley Publishing, 2013.

Shelton, H. The Secrets to Writing a Successful Business Plan: A Pro Shares a Step-by-Step Guide to Creating a Plan That Gets Results. Rockville, Md.: Summit Valley Press, 2014.

Stokes, J. S., G. D. Hanson, J. K. Harper, and L. F. Kime. Financing Small-scale and Part-time Farms . University Park: Penn State Extension, 2005.


Prepared by Lynn F. Kime, senior extension associate; Winifred W. McGee, extension educator; Steven M. Bogash, former extension educator; and Jayson K. Harper, professor of agricultural economics.

Additional financial support for this publication was provided by the Risk Management Agency of the United States Department of Agriculture and the Pennsylvania Department of Agriculture.

This publication was developed by the Small-scale and Part-time Farming Project at Penn State with support from the U.S. Department of Agriculture-Extension Service.

Lynn Kime

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Prepare a business plan for growth

Planning is key to any business throughout its existence. Every successful business regularly reviews its business plan to ensure it continues to meet its needs. It's sensible to review current performance on a regular basis and identify the most likely strategies for growth.

Once you've reviewed your progress and identified the key growth areas that you want to target, it's time to revisit your business plan and make it a road map to the next stages for your business.

This guide will show how you can turn your business plan from a static document into a dynamic template that will help your business both survive and thrive.

The importance of ongoing business planning

What your business plan should include, drawing up a more sophisticated business plan, plan and allocate resources effectively, use targets to implement your business plan, when and how to review your business plan.

Most potential investors will want to see a business plan before they consider funding your business. Although many businesses are tempted to use their business plans solely for this purpose, a good plan should set the course of a business over its lifespan.

A business plan plays a key role in allocating resources throughout a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan reveals how you would use the bank loan or investment you are asking for.

Ongoing business planning means that you can monitor whether you are achieving your business objectives . A business plan can be used as a tool to identify where you are now and in which direction you wish your business to grow. A business plan will also ensure that you meet certain key targets and manage business priorities.

You can maximise your chances of success by adopting a continuous and regular business planning cycle that keeps the plan up-to-date. This should include regular business planning meetings which involve key people from the business.

To find out more, see our guides on how to review your business performance and how to assess your options for growth .

If you regularly assess your performance against the plans and targets you have set, you are more likely to meet your objectives. It can also signpost where and why you're going astray. Many businesses choose to assess progress every three or six months.

The assessment will also help you in discussions with banks, investors and even potential buyers of your business. Regular review is a good vehicle for showing direction and commitment to employees, customers and suppliers.

Defining your business' purpose in your business plan keeps you focused, inspires your employees and attracts customers.

Your business plan should include a summary of what your business does, how it has developed and where you want it to go. In particular, it should cover your strategy for improving your existing sales and processes to achieve the growth you desire.

You also need to make it clear what timeframe the business plan covers - this will typically be for the next 12 to 24 months.

The plan needs to include:

If you intend to present your business plan to an external audience such as investors or banks, you will also need to include:

If your business has grown to encompass a series of departments or divisions, each with its own targets and objectives, you may need to draw up a more sophisticated business plan.

The individual business plans of the departments and separate business units will need to be integrated into a single strategy document for the entire organisation.

This can be a complex exercise but it's vital if each business unit is to tread a consistent path and not conflict with the overall strategy.

This is not just an issue for large enterprises - many small firms consist of separate business units pursuing different strategies.

To draw up a business plan that marries all the separate units of an organisation requires a degree of co-ordination. It may seem obvious, but make sure all departments are using the same planning template.

Objectives for individual departments

It's important for each department to feel that they are a stakeholder in the plan. Typically, each department head will draft the unit's business plan and then agree on its final form in conjunction with other departments.

Each unit's budgets and priorities must be set so that they fit in with those of the entire organisation. Generally, individual unit plans are required to be more specific and precisely defined than the overall business plan. It's important that the objectives set for business units are realistic and deliverable. However complex it turns out to be, the individual business unit plan needs to be easily understood by the people whose job it is to make it work. They also need to be clear on how their plan fits in with that of the wider organisation.

The business plan plays a key role in allocating resources throughout a business so that the objectives set in the plan can be met.

Once you've reviewed your progress to date and identified your strategy for growth, your existing business plan may look dated and may no longer reflect your business' position and future direction.

When you are reviewing your business plan to cover the next stages, it's important to be clear on how you will allocate your resources to make your strategy work.

For example, if a particular business unit or department has been given a target, the business plan should allocate sufficient resources to achieve it. These resources may already be available within the business or may be generated by future activity.

In practice this could mean recruiting more office staff, spending more on marketing or buying more supplies or equipment. You may want to provide funds through current cash flow, generating more profit or seeking external funding. In general, it is always better to fund future growth through revenue generation.

However, you should do some precise budgeting to decide on the right level of resourcing for a particular unit or department. It's important that resources are prioritised, so that areas of a business which are key to delivering the overall aims and objectives are adequately funded. If funding isn't available this may involve making cutbacks in other areas.

A successful business plan should incorporate a set of targets and objectives.

While the overall plan may set strategic goals, these are unlikely to be achieved unless you use SMART objectives or targets, i.e. S pecific, M easurable, A chievable, R ealistic and T imely.

Targets help everyone within a business understand what they need to achieve and when they need to achieve it.

You can monitor the performance of employees, teams or a new product or service by using appropriate performance indicators . These can be:

Targets make it clearer for individual employees to see where they fit within an organisation and what they need to do to help the business meet its objectives. Setting clear objectives and targets and closely monitoring their delivery can make the development of your business more effective. Targets and objectives should also form a key part of employee appraisals, as a means of objectively addressing individuals' progress.

Once you've drawn up your new business plan and put it into practice, it needs to be continually monitored to make sure the objectives are being achieved. This review process should follow an assessment of your progress to date and an analysis of the most promising ways to develop your business. To find out more about these stages see our guides on how to review your business performance and how to assess your options for growth .

This process is called the business plan cycle . In some businesses, the cycle may be a continuous process with the plan being regularly updated and monitored. For most businesses, an annual plan - broken down into four quarterly operating plans - is sufficient. However, if a business is heavily sales driven, it can make more sense to have a monthly operating plan, supplemented where necessary with weekly targets and reviews.

It's important to keep in mind that major events in your business' target marketplace (e.g. competitor consolidation, acquisition of a major customer) or in the broader environment (e.g. new legislation) should trigger a review of your strategic objectives.

Regardless of whether or not there are fixed time intervals in your business plan, it must be part of a rolling process, with regular assessment of performance against the plan and agreement of a revised forecast if necessary.

Original document, Prepare a business plan for growth , © Crown copyright 2009 Source: Business Link UK (now GOV.UK/Business ) Adapted for Québec by Info entrepreneurs

Our information is provided free of charge and is intended to be helpful to a large range of UK-based (gov.uk/business) and Québec-based (infoentrepreneurs.org) businesses. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date.

Need help? Our qualified agents can help you. Contact us!

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Time for Completion The Contractor shall deliver the material and/or services called for in the specifications/proposal and within the delivery time specified and in accordance with the terms of the contract. Work shall be completed within 30 days from the Notice to Proceed issued by the City of Sparks Purchasing Division. The Contractor shall not alter or vary any terms or conditions contained or incorporated herein, including but not limited to, the quantity, price, delivery date or date designated as After Receipt of Order (ARO) or date for commencement or completion of services as mutually agreed upon, unless such alteration or variation is consented to in writing by a duly authorized representative of the City. The City reserves the right to cancel resultant Contract upon ten days written notice in the event the type and quality of the product or work performance is unsatisfactory or in default, subject to Contractor’s right to cure as outlined in termination clause. This is a non-exclusive Contract and the City reserves the right to acquire the material and/or services at its discretion, from other sources during the term of this Contract.

Project Timeline The Project Timeline establishes a start and end date for each Phase of the Project. Developed during the Initiate & Plan Stage and revised as mutually agreed to, if needed, the timeline accounts for resource availability, business goals, size and complexity of the Project, and task duration requirements.

Construction Progress Schedule A schedule indicating proposed activity sequences and durations, milestone dates for receipt and approval of pertinent information, preparation, submittal, and processing of Shop Drawings and Samples, delivery of materials or equipment requiring long-lead time procurement, and proposed date(s) of Material Completion and Occupancy and Final Completion. The schedule will be developed to represent the sixteen or seventeen CSI Specification Divisions. It shall have a minimum number of activities as required to adequately represent to Owner the complete scope of work and define the Project’s critical path and associated activities. If the Project is to be phased, then each individual Phase should be identified from start through completion of the overall Project and should be individually scheduled and described, including any Owner’s occupancy requirements and showing portions of the Project having occupancy priority. The format of the schedule will have dependencies indicated on a monthly grid identifying milestone dates such as construction start, phase construction, structural top out, dry-in, rough-in completion, metal stud and drywall completion, equipment installation, systems operational, Material Completion and Occupancy Date, final inspection dates, Punchlist, and Final Completion date.

Timeline By October 1, 2019, each Party shall bind itself to the Trust Fund Agreement(s). The Trust Agreement will include: • How trustees are appointed and removed • Terms of a trustee’s appointment • Quorum requirements • Meeting requirements • Powers/ability to call a special meeting of the board • Votes and quorum requirements • Liability provisions • Specific provisions outlining the necessary authority for the trustees to manage and administer the State Worker Training Fund and Program • Investment provisions • Investment standards • Enforcement mechanisms for the Contribution Agreement • Specific provisions outlining terms for amendments, mergers, termination of the trust • Establishing benchmarks and metrics. The Trust will produce an annual progress report beginning June 2021 that includes an operating plan for the upcoming year and a report back on the operating benchmarks and metrics for approval by the State’s CCO and the Unions’ Executive Director. By December 1, 2019 the Parties will use best efforts within the legal framework of the Trust Board to adopt a detailed plan for Training Fund operation, including establishing specific training objectives, performance benchmarks, expected outcomes, and hire a Director. By February 1, 2020 the trust will set up a minimum of one (1) pilot and a goal of two (2) based on budget and plan.

Schedule and Completion The Pre-commencement Phase Services to be performed under this Contract shall commence upon the Effective Date of the Contract and be completed within 60 days thereafter. Activities on the Site shall commence on the date specified in the Proceed Order and shall be materially complete in accordance with established Milestones, and not later than the Material Completion and Occupancy Date.

Schedule for Completing Agreement Closeout Activities Provide All Draft and Final Written Products on a CD-ROM or USB memory stick, organized by the tasks in the Agreement. Products: • Final Meeting Agreement Summary (if applicable) • Schedule for Completing Agreement Closeout Activities • All Draft and Final Written Products

Project Completion The Project and the Work are complete.

INSTRUCTIONS FOR COMPLETING FORM A AND B Form A and Form B should be completed for Contracts for consulting services in accordance with Section XI.18.C of the Office of the State Comptroller’s Guide to Financial Operations (xxxx://xxx.xxx.xxxxx.xx.xx/agencies/guide/MyWebHelp/), “Consultant Disclosure Legislation,” and the following:

Project Schedule Construction must begin within 30 days of the date set forth in Appendix A, Page 2, for the start of construction, or this Agreement may become null and void, at the sole discretion of the Director. However, the Recipient may apply to the Director in writing for an extension of the date to initiate construction. The Recipient shall specify the reasons for the delay in the start of construction and provide the Director with a new start of construction date. The Director will review such requests for extensions and may extend the start date, providing that the Project can be completed within a reasonable time frame.

PROGRESS AND COMPLETION 8.2.1 All time limits stated in the Contract Documents are material terms and time is the essence of the Contract. A failure by Contractor to do what is required by the time specified in the Contract Documents is a breach of the contract.


When Should Entrepreneurs Write Their Business Plans?

business plan includes the estimated completion date of ventures

Don’t write a plan before you understand your customer.

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to research. But while this might tempt some entrepreneurs to make writing a plan their very first task, a subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to our research, described in an earlier piece for Harvard Business Review . But while this might tempt some entrepreneurs to make writing a plan their very first task, our subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

A startup business plan seems a good idea at the very start because it answers basic questions like “Where are we now?”, “Where do we want to get to?”, and “How are we going to get there?”. By detailing out how to orchestrate complex interdependencies such as customers, competitors, operations, logistics, marketing, and sales, writing a plan first appears to schedule out actions and strengthen the link between actions and performance for the new venture. And, as we mentioned, planning does have value. In our previous work, we looked at more than 1,000 start-ups, separated them into planners and non-planners, and found that entrepreneurs who plan are more likely to create a viable new venture.

But the real key to succeeding in business is being flexible and responsive to opportunities. Entrepreneurs often have to pivot their business once it becomes clear that their original customer is not the right customer, or when it turns out that their product or service fits better in an alternate market. Because of these realities, business plans written at the start end up nothing more than a fable. And writing a plan takes time – time that could be spent evaluating opportunities. Another danger lurks. A plan might just lock the entrepreneur into a false sense of security that prevents them from seeing the actual opportunity — rather than an imagined one.

To provide startups with concrete and practical help, we went back to the Panel Study of Entrepreneurial Dynamics II ’s data on 1,000 would-be U.S. entrepreneurs. Using these representative data, we then charted the entrepreneurs’ attempt to create a viable new venture over a six-year period (2005-2011). In tracking these entrepreneurs over time, we were careful in our analysis to control for an entrepreneur’s background and for startup conditions like a founder’s education and previous experience, which we knew from our earlier research affect the chances of success.

To control for these influences, we used a well-known statistical technique to separate out the would-be entrepreneurs into two groups: planners and non-planners. This allowed us to create “statistical twins” – pairs of startups similar along a number of dimensions, except that one is a planner and the other is not. As a result, we were able to robustly identify what impact business plan timing has on achieving venture viability.

We found that on average, the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business. Writing a plan in this timeframe increased the probability of venture viability success by 8%. But writing one earlier or later proved to have no distinguishable impact on future success.

Next, we examined how long founders should devote to writing a plan. We found that the optimal time to spend on the plan was three months. This increased the chances of creating a viable venture by 12%. Spending any longer than this was futile, mostly because the information used to inform the plan loses its currency. Spending just a month or two on the plan was just as bad. If the choice was between quickly writing a plan or not writing a plan, the entrepreneur was better off not writing a plan at all.

Further Reading

business plan includes the estimated completion date of ventures

A Short Guide to Strategy for Entrepreneurs

We found that when the plan is sequenced really does matter. Writing a plan alongside early activities like defining the market or collecting information on competitors added nothing to the chances of creating a viable new venture. Equally pointless was writing a plan when the entrepreneur had already hired workers or gotten external funding. In fact, if a plan is written while doing these activities, entrepreneurs have less chance of reaching venture viability than those that did not write a plan.

We found that the sweet spot for writing a plan was around the time when the entrepreneur was actually talking to customers, getting their product ready for market, and thinking through their promotional and marketing activities. Committing a plan to paper alongside these activities increases a start-up’s chance of venture viability by 27%.

But this should detract from the vital importance of spending time writing a good plan. For a plan to be effective, it needs to detail out what the opportunity is, who the customers are, why competitors should be fearful, and how the company operates and makes money.

What is novel about our research, though, is we show that timing really does matter. Our advice to entrepreneurs is not to write a plan too early, don’t spend too long on it, and make sure it is done alongside other activities that actually propel the venture forward.

Good advice not only for entrepreneurs, but also for managers in larger growing organizations who need to plan in contexts – like start-ups – where information is missing or the environment is highly uncertain.

business plan includes the estimated completion date of ventures

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Even the most meticulously planned projects experience unforeseen changes, and when this happens, we need to quantify the effect these changes have. Luckily, there are formulas that eliminate the guesswork.

One of these formulas solves for Estimate at Completion — an important metric for monitoring a project budget. Keep reading to learn why to always calculate Estimate at Completion and exactly what this formula can do.

What is Estimate at Completion (EAC)?

Estimate at completion is a part of the earned value management (EVM) system. This term refers to the practice of estimating a project budget during the project’s life. In other words, how much will the project cost at the time of completion? Your EAC can then be compared to the originally projected budget.

ProjectManager's dashboard with closeup of cost metric

Unlike other methods of cost estimation, an estimate at completion calculation includes unexpected costs and recognizes that initial budget projections are likely not perfect. For this reason, it is often referred to as a “project forecasting tool”.

To fully understand the role EAC plays in the earned value management system, we have to look at other parts of this system and how EAC is unique.

Estimate at Completion Formula

The formula for finding ETC is:

ETC = Estimate at Completion (EAC) – Actual Costs (AC)

Estimate at Completion v. Estimate to Complete

These two terms are often mixed up, because they both refer to estimates on some aspect of a project budget. Because they are so easily confused, it’s key to know the difference and when to calculate for which.

Estimate at completion (EAC) predicts total costs, while estimate to complete (ETC) predicts the money a project still needs. ETC is the forecast of all additional money required to complete a project. It does not account for money already spent.

Estimate at Completion v. To Complete Performance Index (TCPI)

The term “to complete performance index” (TCPI) refers to how cost-efficient the rest of a project must be in order to complete the final deliverable. This is a subset of a cost performance index (CPI). A CPI shows how efficiency costs and resources are being used in the present.

When we solve for CPI, the answer will be less, greater or equal to one, depending on how costs compare to the amount of work completed.

If, for instance, CPI is less than one, changes need to be made in order to be more cost-efficient. When this is the case, you will solve for TCPI to find a numerical value representing how much this adjustment needs to be.

That formula looks like this:

TCPI = (Budget at Completion (BAC) – Earned Value (EV)) / (BAC – Actual Cost (AC))

Why is EAC important?

Even the most well-planned budgets aren’t always 100% accurate. Projects are prone to changes and unexpected circumstances, including increased or decreased expenses and costs.

Calculating EAC gives project managers the opportunity to track exactly how much a change will impact the total budget — in a dollar amount. Knowing this exact dollar amount makes for better, more informed decision-making.

When to Consider EAC

Estimate at completion is a means of estimating how much a project will cost at the end of the line. But, in order to accurately calculate for EAC, you need to know the cost performance index (CPI). As such, EAC can only be calculated when a project is running.

The CPI is calculated at regular intervals during a project, as this number shows spending effectiveness. This makes it a good habit to calculate for EAC anytime the CPI changes.

How to Calculate Estimate at Completion

We’re happy to report that the most commonly used estimate at completion formula is fairly simple! In order to calculate the estimate at completion (EAC), you must know the budget at completion (BAC) and the cost performance index (CPI). With this information, the calculation is as simple as dividing the two.

Below is what that formula looks like:

Estimate at Completion = Budget at Completion / Cost Performance Index

This formula is used when a project has deviated from a budget in some way, but is otherwise still on track. For instance, there might be a daylong delay in production or an unexpected expense.

Additional Estimate at Completion Formulas

Estimates at completion can also be calculated in three other ways, and each of the variations is best for a certain situation.

This formula should be used when the difference between the estimated budget and actual costs will be different in the future than it is in the present:

Estimate at Completion = Actual Cost + (Budget at Completion – Earned Value)

This formula is the best choice when production has been steady and things are running smoothly. Using this formula helps confirm that a project is on track to stay within budget:

When it’s necessary to take project schedule and cost performance into account (how efficiently time and money are being used) to revise a budget, use this formula to find estimates at completion. As you can see, you first need to calculate the Schedule Performance Index and Cost Performance Index.

Estimate at Completion = Actual Cost + (Budget at Completion – Earned Value) / Schedule Performance Index + Cost Performance Index

Parts of the Estimate at Completion Formula

The estimate at completion formula consists of the budget at completion, cost performance index and sometimes schedule performance index. Each of these is another key part of the Earned Value Management system. But what exactly do these terms mean and how do you find them?

Estimate at Completion Example

For this example, we’ll use the first Estimate to Complete formula variation. As a reminder, here’s what that equation looks like:


In this scenario, the Budget at Completion (BAC) is $50,000 and the current Cost Performance Index (CPI) is equal to 0.8. Therefore, we must divide $50,000 by 0.8.

EAC = $50,000 / 0.8

EAC = $62,500

This result indicates that at the current moment, the project is estimated to cost $62,500, which is $12,500 over the initial budget.

How ProjectManager Helps with Cost Estimating and Variance

When you’ve successfully calculated the Estimate at Completion, it’s time to put the results to use.

In order to make the best estimates, you need to have the most current information. The ProjectManager dashboard updates in real-time, so there’s no chance of using old data to make important decisions for the future.

ProjectManager’s dashboard view, which shows six key metrics on a project

Use a wide range of filters to customize the dashboard view to your liking and hone in on the critical details. See costs, tasks, time spent and overall project health, all from one hub.

Let your dashboard do the calculations for you and easily compare things like planned v. actual costs, planned completion v. actual completion and more. That means there’s no need to get out the calculator or rely on third-party applications to see things like your EAC.

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When creating an estimate at completion for your project, you need the best tools to calculate cost estimations and variance. ProjectManager is a cloud-based project management software with dashboards and resource management features that give you control over your project costs. Try ProjectManager today for free!

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What Is a Feasibility Study?

Understanding a feasibility study, how to conduct a feasibility study.

The Bottom Line

Business Essentials

Feasibility Study

Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed.

business plan includes the estimated completion date of ventures

Investopedia / Lara Antal

A feasibility study is a detailed analysis that considers all of the critical aspects of a proposed project in order to determine the likelihood of it succeeding.

Success in business may be defined primarily by return on investment , meaning that the project will generate enough profit to justify the investment. However, many other important factors may be identified on the plus or minus side, such as community reaction and environmental impact.

Although feasibility studies can help project managers determine the risk and return of pursuing a plan of action, several steps should be considered before moving forward.

Key Takeaways

A feasibility study is an assessment of the practicality of a proposed plan or project. A feasibility study analyzes the viability of a project to determine whether the project or venture is likely to succeed. The study is also designed to identify potential issues and problems that could arise while pursuing the project.

As part of the feasibility study, project managers must determine whether they have enough of the right people, financial resources, and technology. The study must also determine the return on investment, whether this is measured as a financial gain or a benefit to society, as in the case of a nonprofit project.

The feasibility study might include a cash flow analysis, measuring the level of cash generated from revenue versus the project's operating costs . A risk assessment must also be completed to determine whether the return is enough to offset the risk of undergoing the venture.

When doing a feasibility study, it’s always good to have a contingency plan that is ready to test as a viable alternative if the first plan fails.

Benefits of a Feasibility Study

There are several benefits to feasibility studies, including helping project managers discern the pros and cons of undertaking a project before investing a significant amount of time and capital into it.

Feasibility studies can also provide a company's management team with crucial information that could prevent them from entering into a risky business venture.

Such studies help companies determine how they will grow. They will know more about how they will operate, what the potential obstacles are, who the competition is, and what the market is.

Feasibility studies also help convince investors and bankers that investing in a particular project or business is a wise choice.

The exact format of a feasibility study will depend on the type of organization that requires it. However, the same factors will be involved even if their weighting varies.

Preliminary Analysis

Although each project can have unique goals and needs, there are some best practices for conducting any feasibility study:

Suggested Components

Once the initial due diligence has been completed, the real work begins. Components that are typically found in a feasibility study include the following:

Examples of a Feasibility Study

Below are two examples of a feasibility study. The first involves expansion plans for a university. The second is a real-world example conducted by the Washington State Department of Transportation with private contributions from Microsoft Inc.

A University Science Building

Officials at a university were concerned that the science building—built in the 1970s—was outdated. Considering the technological and scientific advances of the last 20 years, they wanted to explore the cost and benefits of upgrading and expanding the building. A feasibility study was conducted.

In the preliminary analysis, school officials explored several options, weighing the benefits and costs of expanding and updating the science building. Some school officials had concerns about the project, including the cost and possible community opposition. The new science building would be much larger, and the community board had earlier rejected similar proposals. The feasibility study would need to address these concerns and any potential legal or zoning issues.

The feasibility study also explored the technological needs of the new science facility, the benefits to the students, and the long-term viability of the college. A modernized science facility would expand the school's scientific research capabilities, improve its curriculum, and attract new students.

Financial projections showed the cost and scope of the project and how the school planned to raise the needed funds, which included issuing a bond to investors and tapping into the school's endowment . The projections also showed how the expanded facility would allow more students to be enrolled in the science programs, increasing revenue from tuition and fees.

The feasibility study demonstrated that the project was viable, paving the way to enacting the modernization and expansion plans of the science building.

Without conducting a feasibility study, the school administrators would never have known whether its expansion plans were viable.

A High-Speed Rail Project

The Washington State Department of Transportation decided to conduct a feasibility study on a proposal to construct a high-speed rail that would connect Vancouver, British Colombia, Seattle, Washington, and Portland, Oregon. The goal was to create an environmentally responsible transportation system to enhance the competitiveness and future prosperity of the Pacific Northwest.

The preliminary analysis outlined a governance framework for future decision-making. The study involved researching the most effective governance framework by interviewing experts and stakeholders, reviewing governance structures, and learning from existing high-speed rail projects in North America. As a result, governing and coordinating entities were developed to oversee and follow the project if it was approved by the state legislature.

A strategic engagement plan involved an equitable approach with the public, elected officials, federal agencies, business leaders, advocacy groups, and indigenous communities. The engagement plan was designed to be flexible, considering the size and scope of the project and how many cities and towns would be involved. A team of the executive committee members was formed and met to discuss strategies, lessons learned from previous projects and met with experts to create an outreach framework.

The financial component of the feasibility study outlined the strategy for securing the project's funding, which explored obtaining funds from federal, state, and private investments. The project's cost was estimated to be between $24 billion to $42 billion. The revenue generated from the high-speed rail system was estimated to be between $160 million and $250 million.

The report bifurcated the money sources between funding and financing. Funding referred to grants, appropriations from the local or state government, and revenue. Financing referred to bonds issued by the government, loans from financial institutions, and equity investments, which are essentially loans against future revenue that needs to be paid back with interest.

The sources for the capital needed were to vary as the project moved forward. In the early stages, most of the funding would come from the government, and as the project developed, funding would come from private contributions and financing measures. Private contributors included Microsoft Inc., which donated more than $570,000 to the project.

The benefits outlined in the feasibility report show that the region would experience enhanced interconnectivity, allowing for better management of the population and increasing regional economic growth by $355 billion. The new transportation system would provide people with access to better jobs and more affordable housing. The high-speed rail system would also relieve congested areas from automobile traffic.

The timeline for the study began in 2016 when an agreement was reached with British Columbia to work together on a new technology corridor that included high-speed rail transportation. The feasibility report was submitted to the Washington State land Legislature in December 2020.

What Is the Main Objective of a Feasibility Study?

A feasibility study is designed to help decision-makers determine whether or not a proposed project or investment is likely to be successful. It identifies both the known costs and the expected benefits.

In business, "successful" means that the financial return exceeds the cost. In a nonprofit, success may be measured in other ways. A project's benefit to the community it serves may be worth the cost.

What Are the Steps in a Feasibility Study?

A feasibility study starts with a preliminary analysis. Stakeholders are interviewed, market research is conducted, and a business plan is prepared. All of this information is analyzed to make an initial "go" or "no-go" decision.

If it's a go, the real study can begin. This includes listing the technological considerations, studying the marketplace, describing the marketing strategy, and outlining the necessary human capital, project schedule, and financing requirements.

Who Conducts a Feasibility Study?

A feasibility study may be conducted by a team of the organization's senior managers. If they lack the expertise or time to do the work internally it may be outsourced to a consultant.

What Are the 4 Types of Feasibility?

The study considers the feasibility of four aspects of a project:

Technical: A list of the hardware and software needed, and the skilled labor required to make them work.

Financial: An estimate of the cost of the overall project and its expected return.

Market: An analysis of the market for the product or service, the industry, competition, consumer demand, sales forecasts, and growth projections

Organizational: An outline of the business structure and the management team that will be needed.

Feasibility studies help project managers determine the viability of a project or business venture by identifying the factors that can lead to its success. The study also shows the potential return on investment and any risks to the success of the venture.

A feasibility study contains a detailed analysis of what's needed to complete the proposed project. The report may include a description of the new product or venture, a market analysis, the technology and labor needed, as well as the sources of financing and capital. The report will also include financial projections, the likelihood of success, and ultimately, a go-or-no-go decision.

Washington State Department of Transportation. " Ultra-High-Speed Ground Transportation Study ."

GeekWire. " Microsoft donates $223K to finish Seattle-Vancouver high-speed rail feasibility study by 2020 ."

StartRunGrow. " Who Conducts Feasibility? "


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Project Completion Date: When It Matters And Why

business plan includes the estimated completion date of ventures

727 articles

Substantial Completion Mechanics Lien Bond Claims

business plan includes the estimated completion date of ventures

We can separate lien and bond claim deadlines into two categories: “driven by completion date” or “driven by individual furnishing.” Or put in another way, substantial completion vs. date of last furnishing.

Driven by completion date

Mechanics lien or bond claim deadlines “driven by completion” establish a time frame for filing a claim that is based on when the entire construction project has reached substantial completion or actual completion. This scenario is quite rare on private projects with only 5 or 6 states calculating its deadlines in this way. Most famously, California’s lien deadlines start counting from the project’s completion .

The “driven by completion” type deadlines are far more common on government projects, but it is still a minority rule across the country. Nevertheless, if your deadline is driven by completion pursuant to the state’s requirements, knowing the entire project’s substantial completion or final completion date is very important.

Driven by individual furnishing

Mechanics lien or bond claim deadlines “driven by individual furnishing” establishes a time frame for filing a claim that is based on when the claimant individually last furnished to the project or reached contract completion. This scenario is far more common, as in most states the start date for the deadline clock is the last date of furnishing labor or materials to the project. This can be particularly challenging for general contractors to calculate.

When a deadline is driven by individual furnishing, the entire project’s substantial or final completion date is irrelevant to your deadlines. It’s based solely on the last date the claimant was onsite providing labor, materials, or services to the improvement.

Enter your job's zip code

Lien Deadline Calculaor Date

Give your best answers! You can always update later

If you don't know these dates, give your best estimate. Since these dates determine your notice and lien deadlines, it's important to be as accurate as possible.

Did you send a {document type} to the {contractor role} and general contractor by {deadline date} ?

In Texas, subcontractors and suppliers are required to send a notice for each month that work is performed and unpaid. Based on your project type and role, your job has the following notice requirements. Did you fulfill this notice requirement?

For subcontractors on residential proejcts, notice is required to be sent to the owner and prime contractor by the 15th day of the 2nd month following each month that work was performed and unpaid.

For subcontractors on non-residential projects, notice is required to be sent by the 15th day of the 3rd month following each month work was performed and unpaid.

For sub-subcontractors, notice is required to be sent on both the 15th day of the 2nd month, and the 15th day of the 3rd month following each month in which work was performed and unpaid.

For suppliers on residential projects, notice is required to be sent to the owner and prime contractor by the 15th day of the 2nd month following each month that work was performed and unpaid.

For suppliers on non-residential projects, notice is required to be sent both the 15th day of the 2nd month, and the 15th day of the 3rd month following each month in which work was performed and unpaid. (The 2nd month notice has to be sent only to the prime contractor.)

Lien Deadline Calculaor

Your company is a {contractor role} hired by the {hiring role} on a {project type} project at {project address}

You did not send a {document type} before {deadline date} . Need to send a preliminary notice by {deadline date} .

How do you know the project completion date?

You need only care about a project’s completion date when furnishing to a project with a lien or bond claim deadline “driven by completion.” Unfortunately, when such is the case, you’ll likely be without much information or many options.

The general contractors and project management teams will know when the project is completed because they’ll be there. This is not the case with subcontractors and material suppliers. These parties come in and provide a specific furnishing to the project, and then leave. In the case of material suppliers, they may even be thousands of miles away and shipping to the job site.

Notice of Completion filing

Each state’s laws are different with respect to how “completion” is determined , but almost every state lacks any useful mechanism for advertising the completion date to the public or project participants. Some states “require” a “ Notice of Completion ” be filed in public records, but this is pretty useless to project participants because: (i) It’s very frequently not filed; and (ii) It’s not really that “public” as you’ll need to send a courier to the county to check and see if it’s been filed over and over again.

Requesting the completion date

There are a very tiny number of states that at least allow you to request project information and to be notified about the completion date.  Louisiana , for example, has a “ Notice to Owner of Obligations ” document that creates a duty for the owner to notify you of the project’s completion date. California allows you to file your preliminary notice with the recorder to create a duty on the recorder to notify you of any completion filing. But – surprise, surprise – it’s very inconsistently adhered to and there are little to no consequences if the obligated party fails to perform.

The heading to this section asks a common question: How do you know or obtain a project’s completion date? The answer is simply that you don’t.

Sure, you can go to the county recorder’s office and search to see if a notice has been filed. In reality, however, your workload of projects and the speed of business makes this a non-starter.

What is “completion” anyways?

Another wrinkle to this question is the completion concept itself and specifically what qualifies a project as “complete.” This question grows more complicated because state laws distinguish between “substantial completion” and “final completion,” and your mechanics lien or bond claim deadlines may be driven by one or the other.

If you’re in the construction business you know that “completion” of work is an elusive concept. The industry has dissected the word “completion” and created substantial completion, final completion, completion subject to punch list items, completion that marks the start of a warranty period , and on and on.

The short answer to “what is completion anyway” throws you back into this torpedo of definitions. Each state and circumstance is different as to which “completion” actually matters when trying to calculate a mechanics lien or bond claim deadline, and it is sometimes made more complicated by allowing general contractors or project managers to file a “notice of completion” and set their own (sometimes incorrect) milestone date.

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What to do to protect lien and bond claim rights in the face of this project completion date nightmare?

Bottom line: Do not wait for, track, or be too terribly concerned about when the project is completed. It’s only going to give you headaches and throw your right to file a lien into a murky legal gray area. You want to stay in control of your lien rights , and therefore, do exactly that.

1. Know the nature of your work and where it falls on the project schedule

Do you normally leave a job towards the beginning or end of a project? Where does your project activity fall on the critical path schedule? If you’re in the business of doing site foundation work there will likely be a pretty healthy amount of time between when you stop work and the completion of the entire project. If you’re a finish contractor, however, the end of the project will be pretty soon after your furnishing. Understand this about your work and use that to frame your approach to the deadline.

2. Calculate your “completely safe lien period” and track it

When a state has a “driven by completion” deadline, the Levelset platform  calculates the deadline by counting the appropriate number of days from the completion date or your last furnishing date, whichever is later . Therefore, when you don’t know the completion date and only know your last furnishing date, the system will calculate your deadline based on the last furnishing date only. This creates a ‘ safe lien period .’

You’ll probably have more time to file your lien because the project likely continued after your work, but taking the lien period and driving it by your last furnishing gives you a deadline that will be pretty safe to follow. If you file within that period, you’ll almost always be on time.

3. Use common sense to decide when to file your claim

You’ll probably have some extra time after your “safe period” expires, but then again, if your safe period expires why is the debt still unpaid? The safe period is likely to be long enough to throw your account into default. It’s okay to tread water for a little while waiting for payment, but the longer you go without filing your lien claim, the closer the true lien period’s end will be.

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Public Works project, State of Ca., my Counsel can confirm we have the Bonding Company served timely in a case where the GC simply did not pay. This GC represented he had not been paid, the work and he had not been accepted, when in truth, he had...

We filed a bond lien on a new school build and had set forth the expectations that if we had to file a lien, we would charge an additional fee of $1,500.00 and a monthly interest rate of 1.5%. Do we sign and return the final lien waiver...

I know i Should have obtained it in advance but am first-timer. I have license # and Insurance Certificate for Contractor in breach for non-performance? Thank you

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Business Plan Length: How Long Should a Business Plan Be?

Business Plan Length

How many pages should a business plan be?

Having written thousands of business plans over the past 20+ years, the answer is simple.

A good business plan length is whatever is required to excite the potential investors or lenders, prove that management truly understands the market, and detail the execution strategy.

From surveys of investor needs, Growthink business plan consultants have found that 15 to 25 pages of text is the ideal length in which to accomplish this. Any more and the time-constrained investor will be forced to skim certain sections of the plan, even if they are generally interested, which could lead them to miss essential information. Any less and the investor will think that the business has not been fully thought through, or will simply not have enough information to make an investment decision. Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the plan is not meant to tell the whole story . Rather, the company must be “boiled down” into its critical and most-compelling elements. If the investor is interested, there will be plenty of additional time to tell the whole story.

Download our Ultimate Business Plan Template here

These essential components, taken from our business plan template , are as follows:

Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company’s value proposition within fewer pages.

While a business plan writer should make the body of document between 15 and 25 pages, the Appendix can be used for supplemental information, thus potentially making your full plan longer.

The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.

If the Appendix is long, if you a printing it out, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick plan, which will make them queasy before even opening it up.

To summarize, the goal of your plan is to create interest – not to have an investor write you a check.

In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity.

The shorter length does not mean that your plan should take less time to prepare. Rather, the entire process will take more time. As Mark Twain once said, “If I had more time, I would write a shorter story.”

So, in answering how long should a business plan be, you can keep it short, yet quite compelling and comprehensive. While condensing your plan to a concise, strong document is challenging and time consuming, fortunately the rewards are significant.

How to Finish Your Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!


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    How much money will it take to start your small business? Calculate the startup costs for your small business so you can request funding, attract investors, and estimate when you'll turn a profit. Calculate your startup costs

  7. How To Write the Conclusion of a Business Plan (With Tips)

    1. Decide where you want it to be. Determine whether you want your business plan conclusion to be at the end of the executive summary or the end of the entire document. If you are creating a business plan to get investors or raise money, consider putting the conclusion at the end of the executive summary. The executive summary introduces the ...

  8. Ch. 7 Flashcards

    Arrange the contents that should be included in the introductory page of a business plan for a new venture starting from the information that should appear at the beginning to the information that should appear at the end. The name of the entrepreneur (s), telephone number, fax number, e-mail address, and Web site address if available

  9. Milestones for Successful Venture Planning

    Milestone 1: Completion of Concept and Product Testing This stage has a very low cost relative to future steps and precedes complete product development; indeed, it often comes before any product...

  10. The Business Planning Process: 6 Steps To Creating a New Plan

    The business planning process includes diagnosing the company's internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

  11. PDF The Elements of a Business Plan: First Steps for New Entrepreneurs

    Content: Outlines the basics of a business plan Outcome: Readers will understand the purpose of and elements required to write a business plan for a new venture By organizing your thoughts on a possible business venture into a business plan, you begin the process of creating a successful enterprise. This publication addresses common

  12. Prepare a business plan for growth

    This includes planning the timing of your departure and the circumstances, e.g. family succession, sale of the business, floating your business or closing it down. If you intend to present your business plan to an external audience such as investors or banks, you will also need to include: your aims and objectives for each area of the business

  13. What Should You Include in a Business Plan?

    Include the following to have a comprehensive company description: Your company's legal structure (corporation, dual proprietorship) A short history of your company. A short overview of your company's business operations. The demands your company meets for customers. A list of your company's products, services, current customers and suppliers.

  14. 7 Types of Business Plans

    A feasibility plan is written when a company is seeking a new business venture such as producing a new product in an existing market or selling current products to a new market. This plan type details what market will want to buy the product or service and if that new venture will result in a profit worthwhile to the company.

  15. "How to Develop and Use a Business Plan"

    Extend your plan through at least the first year. Three Year Plan: Again, provide the detail listed above in the startup plan. Project how your business will compete in years three to five. Much of this work has been done in the financial forecast, but you will want to support it with a clear explanation.


    estimated timeframe for completion of the proposed joint venture. The Proposed Joint Venture is expected to be completed by third quarter of year 2022. Upon completion of the Proposed Joint Venture, t...

  17. When Should Entrepreneurs Write Their Business Plans?

    We found that on average, the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business. Writing a plan in this timeframe ...

  18. Calculating Estimate at Completion (EAC)

    In order to calculate the estimate at completion (EAC), you must know the budget at completion (BAC) and the cost performance index (CPI). With this information, the calculation is as simple as dividing the two. Estimate at Completion = Budget at Completion / Cost Performance Index.

  19. Feasibility Study

    Feasibility Study: A feasibility study is an analysis of how successfully a project can be completed, accounting for factors that affect it such as economic, technological, legal and scheduling ...

  20. Project Completion Date: When It Matters And Why

    When the project completion date matters for your mechanics lien or bond claim rights. In every state and circumstance, a party who furnishes labor or material to a construction project has a right to make a lien or bond claim if unpaid for the work performed. However, this right is subject to time limitations, and the ultimate filing deadline ...

  21. Business Plan Length: How Long Should a Business Plan Be?

    A good business plan length is whatever is required to excite the potential investors or lenders, prove that management truly understands the market, and detail the execution strategy. From surveys of investor needs, Growthink business plan consultants have found that 15 to 25 pages of text is the ideal length in which to accomplish this.