All business plans have a series of common elements such as market analysis, marketing plan or financial forecasts, which are mandatory regardless of the type of business or the reason why the plan is created. Similarly, most business plans have some common objectives, whether it’s attracting capital or finding a business partner. However, independent from the common aspects, each business plan is different just like any business is different.
Based on the type of business and the manner in which you intend to use your business plan, you will need one that is different from that of another fellow entrepreneur. Plus, you will write your business plan differently if you intend to present it to a potential investor than you would if you create it for internal use, i.e. to help you and your management team. Based on the final objectives, the business plans will vary in structure, length, presentation, level of content detail and on what elements it should be focused.
Selecting a certain type of business plan is extremely important because it will have a direct effect on the general impact your business plan will eventually register. Regardless of the final goal of the business plan, you want it to present your business idea in a favorable light and in a relevant and realistic manner.
Types of business plans
Generally, business plans divide into three main categories: mini plans, operational plans and presentation plans. Below, you have a detailed description for each type of business plan:
The mini plan. A business mini plan has a maximum of 8-10 pages and should contain the key-aspects of a business: business concept, necessary funding and sources, marketing plan and financial forecasts. This type of plan is the best way to test a business idea, to verify the interest levels of a potential partner or a potential investor. Simultaneously, it can represent a useful tool through which you can get an idea on what exactly the detailed business plan should focus on. It the mini plan generates interest, then you can decide to write a more detailed business plan. A mini plan cannot replace a detailed business plan so before you decide to send it to be analyzed by a potential partner or investor make sure that the person isn’t expecting a complex business plan or clarify from the get-go what documents the person is going to receive. If you need help in writing your mini business plan, use our Mini Business Plan Template.
The working (operational) plan. This type of plan is generally used for business management purposes. It contains many operational details, is written in a semi-formal language and is used continuously to review business operations and progress. To get a glimpse over the detailed content of a business plan, you should probably read the articles The Elements of a Business Plan and How to Write a Successful Business Plan.
A business plan created for internal use cannot contain several elements that are relevant only if it is presented to an outside person, such as the management team’s CV, product or business equipment images, etc.
Also, the presentation of an operational business plan is not all that relevant: you don’t need to print it on quality paper or present it in an elegant file. You can just staple the pages and write on it, because it is the content that is relevant and not the packaging.
An operational business a plan is all about the content and the total emphasis on details because its goal is to be constantly used as a roadmap of the business.
The presentation plan. If a working plan is all about details, the presentations plan is all about…presentation. The emphasis should be on marketability of the business idea, because the goal of the business plan is to convince bankers, venture capitalists and other stakeholders that your business idea is profitable and is worth investing in.
Because this type of business plan is suitable to be presented to people outside of your company, you need to pay extra attention to the aspects related to formatting and appearance: the language should be business-related, avoiding informal speech, using jargon or abbreviations. You must also note that the people you will present the business plan to are not familiar with your business. Thus, you shouldn’t leave aspects subject to interpretations, but rather explain and detail as clearly as possible so that the potential investors or business partners can have a general view of your business idea.
Moreover, this type of business plan must include a series of omitted elements in the case of the operational plan such as: the management team’s CVs, pictures of the products or equipments of your company, market research data, and any other materials that can offer relevant information for the people reading your business plan. Furthermore, potential investors want to see that you have a good understanding of the market you operate in and you are familiar with your competitors.
Therefore, you need to offer relevant information pertaining to potential threats risks your company may face. Even though you may think that some aspects are insignificant, it is better to include them in your business plan so that you are able to demonstrate you have a complete overview of the market.
The most important difference between an operational plan and a presentation plan consists in the detail level of information and the manner in which the business plan is presented. In the case of the latter, you should print it on quality paper, use several colors and offering it in a nicely designed way to help your readers go through it easier. In addition, it must contain graphics, pictures, tables, etc.
Before presenting your business plan to potential investors or business partners, you must check and recheck it to make sure no errors or discrepancies have made their way into the text. Usually, most mistakes occur when modifications are done to a section of the document or in an annex. For example, if you’ve decided to change the numbers to present a more optimistic cash-flow, maybe, you forgot to change the numbers in the first sections of your plan. One moment of distraction can be perceived by a potential investor as sloppiness. This, in turn, can dramatically decrease your chances of success.
For more information about Business Plans we welcome you to check out the our dedicated section.