Business Plan KNEC Notes


There are many reasons why companies prepare Business Plans.  One of the most common reasons is where the promoters of the company are intending to raise finance and a detailed Business Plan is required for  presentation to potential investors.


The Business Plan must be well constructed and provide sufficient detail to enable a potential investor to decide in principle, whether the company is a candidate for investment.


The Business Plan should include the following:


  • Executive Summary

Potential investors often make an initial judgement based on the content of the Executive Summary and their decision to read the detailed content of the Business Plan will depend on its content.


While the Executive Summary is shown at the front it should not be completed until the Business Plan has been written.  It will highlight all milestones in the company’s development over the next five years.  At minimum, it should summarise the following:

  • Purpose of the Plan
  • Product or Service and its advantages
  • Market Opportunity
  • Management Team
  • Track record, if any
  • Financial Projections – sales, net profit before tax, investment etc. Funding Requirements


  • Company Description

            Promoters and Shareholders   Promoters

Management structure and areas of responsibility

Shareholders names, % shareholding, cash invested to date


Financial, legal and other advisors with contact details

         Products and Services

Explain the product/service Background to development

Benefits and features

Unique selling point

Advantages to customers

Disadvantages or weak points Future developments

         Long Term Aim of Business


Specific objectives to be achieved over next five years (sales, exports, employment, product development etc.)

         SWOT Analysis

Analyse the strengths and weaknesses of the business and product/service, the opportunities that exist in the marketplace and the threats to the viability of the project.

  • Market Analysis

This covers market research and competitor analysis and demonstrates that the research undertaken justifies the projections made in the plan and indicates a viable market exists for the product/service.

         Target Market

Analyse the market:

Size of each segment

Is the segment growing or declining?

Characteristics of potential customers in each segment

         Total Market Valuation

Show the total potential value of the market for the product/service, in all targeted markets (domestic and international).

          Target Company Revenue

The basis for the sales figures in the financial projections and must be based on realistic assumptions.  Include average deal size, length of sales cycle, recurring revenues.

 Market Trends  Recent changes

Future predictions

Drivers – demographic changes, economic and legislative factors

Implications for company product/service

Plans to meet future demands and changes in the market

          Profile of Competitors

What are the competing products/services

Profile of key players (size, turnover, profitability etc.) and their market share

Advantages and disadvantages of competitors’ offerings

          Competitive Advantage

Why potential customers will choose company’s product

Unique features


New technologies or systems

Better value (efficiency, ROI, cost/benefit)

Greater compatibility with existing systems Include any independent validation          Benefits to Clients

What does product/service provide to potential customers?

Increase sales

Increase efficiencies

Save money              Save time

Maximise resources        Reduce errors

Reduce downtime

Improve customer service, increase loyalty

  • Marketing/Sales Strategy

Strategies for reaching target market, generating interest in the product/service and actually achieving sales.

         Marketing Strategy

Which segments of the market will be targeted first and why

How will product/service be differentiated

What potential customers have already been targeted

Is test site in operation and what is feedback

What contacts can be used to generate market awareness and sales

Who will do the marketing – staff, agency, representatives


          Sales Strategy

How will product/service be sold     Directly




Sales Representatives


State the advantages of the methods chosen


How will price charged be set?  Consider

Competitors’ prices

Level of competition in market

Perception of quality-price relationship by customers

Production costs and overheads

          Marketing and Communications Strategy

How will product/service be promoted in the marketplace?

Advertising – where, when, how and whom

Public Relations

Direct Marketing

Website and internet marketing Exhibitions and conferences

Word of mouth

  • Research and Development

Intended future development of product/service.  Detail plans for new products/services.  List all technical partners and indicate nature of involvement.

State any protection available for product/service – patented, copyright or trademark registration and brand image to be built up as protection against competition.

  • Staffing and Operations

Outline intended structure of the company – management, number of employees and physical operations.

Management (including Board) Organisation Chart

Areas of responsibility of each manager


What employees will be hired over the next three years, skills and in which areas?


Planned employee and management development.  Should tie-in with future product/market developments.

Operations Premises


Production facilities Infrastructure

Communications facilities


  • Financial Projections

         Key Assumptions

Income sources

Number of employees projected for each year and their salaries

Projected investment in equipment and materials

Projected R & D costs              Depreciation policy

Expected rent and rates charges

Creditor and Debtor days expected              Expense calculations

         Profit & Loss Accounts

Projected for first three years of operations

          Balance Sheets

Projected for first three years of operations

          Cash flow

Monthly cash flow predicted for the first two years of operations

  • Sales Pipeline

Analyse pipeline business – customer, size of deal, date expected, probability of achieving sale etc.

  • Funding Requirements

Total funding requirements and how these are to be provided.  Also state approximate breakdown of how funds are to be spent.



Promoters’ funds

Bank lending

Grants or loans from agencies

Investment already received

Investment sought


            Spending              Equipment

R & D



  • Appendices

Provide detailed data on which the main text of the plan is based and extra information of interest to the readers.  Details will vary from business to business but may include:

Promoters’ CVs

Detailed financial assumptions    Most recent company audited accounts

Share capital table and investment history

Term sheet from potential investors

Detailed market research findings

Promotional literature

Product or service information

Details of company website

Testimonials or letters of intent from customers

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