• 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:

  • Describe the different purposes of a business plan
  • Describe and develop the components of a brief business plan
  • Describe and develop the components of a full business plan

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.

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.

  • These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
  • Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

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.

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.

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.

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.

  • You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
  • Would you have started the Laughing Man Foundation?
  • What else can Jackman do to aid fair-trade practices for coffee growers?

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.

  • What steps should the new restaurant take to create a new business plan?
  • Should it attempt to serve the same customers? Why or why not?

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

  • 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
  • 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
  • 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
  • 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
  • 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
  • 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
  • 54 Foodstart. http://foodstart.com
  • 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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13 Free Business Plan Powerpoint Templates To Get Now

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13 Free Business Plan Powerpoint Templates To Get Now

Are you looking for business plan PowerPoint templates to grab right away and blow your audience away? In this selection, we’ve gathered 12 modern and completely free business plan PowerPoint templates designed according to the latest trends . The templates include everything you need in order to impress your potential partners with your business planning. They are easily editable, certainly memorable, and completely free to download.

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Iveta Pavlova

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Home Blog Business Guide to Defining, Presenting, and Validating Project Scope

Guide to Defining, Presenting, and Validating Project Scope

Cover for Guide to Defining, Presenting, and Validating Project Scope

Projects that go over budget, take longer than anticipated, or go off the rails with change requests are every project manager’s worst nightmare. That’s why defining, presenting, and validating Project Scope is essential. 

According to PMI’s Pulse of the Profession 2018, some of the leading causes of project failure are; changes in project objectives, inaccurate requirements gathering, inadequate vision or goal for the project, poor communication, and poor change management. Not surprisingly, all these situations are avoidable with a Scope Management Plan. 

Defining scope at the planning stage and validating scope during a project lifecycle are two solutions to the general issue. Still, before starting a project at full speed, you need approval from stakeholders, and that’s where presenting the Project Scope comes in. 

In this guide, we share the essentials of a Project Scope process and give you actionable advice on presenting scope effectively for stakeholder buy-in and approval. Plus, we explain how to turn 200-page documentation of a Scope Analysis into a Project Scope Statement, slide by slide.

Table of Contents

  • Who’s in Charge of the Project Scope and Project Scope Management?

Why is Project Scope Management Important in Project Management?

  • What are the Key Components of the Project Scope?
  • What is a Project Scope Statement?

What is Scope Validation?

  • Managing Scope Changes and Avoid Scope Creep

What is Project Scope? 

Project Scope is an agreed-upon combination of activities and considerations necessary to complete a project. Without a clear scope assessment, a project can take forever to finalize, go over budget, or never finish. Scope, as part of the project management triangle — along with cost and time — is a critical and foundational process for projects of any size. 

The concept of something being in and out of Scope is vital to understanding how scope works. When something is in scope, it’s considered and approved as a project deliverable or our assumptions about resources and budget. Things that are out of scope are exclusions to the deliverables list, requests from stakeholders that don’t fit the project’s objective, and any situation that might arise due to a change in available resources or changes beyond control.

The scope needs buy-in and approval from stakeholders before a project can kick off. For approval, the project manager presents the Project Scope Statement outlining the project objectives and boundaries and a work breakdown structure (WBS) highlighting the critical path to completion. How you present the scope is critical to stakeholder buy-in and approval.

After presenting the scope and upon approval, Scope Management starts. We can define Scope Management as the ongoing monitoring and assessment of the scope as the project progresses. 

Map of a project scope plan process

Who’s in Charge of the Project Scope and Project Scope Management? 

The project manager is in charge of leading the Project Scope Management plan and execution. Project coordinators and schedulers support the Project Manager. During the scope planning stage, stakeholder roles are defined for scope validations and change request management. 

Project Scope Management is an ongoing activity that spans the project lifecycle and should be present at every major stakeholder interaction. Stakeholder involvement in Scope Management and Change Processes leads to more effective projects. Ideally, every involved stakeholder should have some degree of accountability in the Project Scope management.

Of all the things a project manager has on their mind at all times, scope is at the top of the list. Right next to the scope are time and cost. How much is that going to cost? Is it in the budget? Is this requirement in scope? Can it be ready on time? Project Managers regularly ask these questions about a project’s details, and some ask these questions for several projects simultaneously. The constant balance between scope, time, and cost is vital to quality deliverables and meeting project objectives and goals. It’s also essential for the project manager’s productivity and overall efficiency to successfully lead a team to project completion.

Scope’s relationship to Project Management is visualized in the triple constraint graph. This interdependent triangle visualizes how to deliver a quality project that meets stakeholder expectations on time and without critical over-budgeting. If one of the three constraints changes in any way, the other two must be assessed accordingly and need to change as well. There must always be a balance to avoid risks and complications.

Scope in and of itself is a great resource for project management, but it’s not without risks. A hazy and unclear scope will eventually show scope gaps where things aren’t clear on processes or stakeholder roles. An undefined scope can lead to scope creep, where out-of-scope features or requirements are added to the project without documentation and proper assessment. Finally, if not careful, the project can be riddled with gold plating, the practice of adding or adapting features to cover errors or gaps without proper planning and development under the scope umbrella.

Triple constraint graph in Project Scope

Defining Project Scope 

After the scope planning stages that define stakeholders, requirements, and a scope management plan, it’s time to get to the nitty gritty and define your project’s Scope. 

Defining project scope requires a scoping session or meeting with stakeholders with high buy-in. Stakeholders with lower involvement don’t need to be part of the scope management process but do need to be informed of it.

To define a project scope, use the key components as a map to guide you. Every step in the scope definition process aims to bring in and construct the critical components as the project scope foundation.

What are the Key Components of the Project Scope? 

The project scope comprises a set of critical, non-negotiable components. These components will help define, manage, and present the project scope to stakeholders and participants. They are also the foundation for scope change management processes, as every component needs to be assessed when a change request comes in during validation.

Key components of Project Scope

1. Identify Project Objectives

Clear objectives are critical at the start of every project. Not only do they direct the workflow during a project, but they also provide measurable input about the project’s success. 

Project objectives are the results a project aims to achieve, while requirements are the concrete executable needs to reach that result. For example, suppose the project objective is to improve the quality of on-the-job training. In that case, the requirements are to build and customize a learning platform, improve the existing courses, and create new learning experiences. 

According to The Project Management Body of Knowledge, Seventh Edition , “requirements are a condition or capability that is required to be present in a product, service, or result to satisfy a business need.” The business need is the project objective.

Organize the scoping session and start by defining the objective. Use the SMART goals technique to pinpoint specific, measurable, achievable, realistic, and time-bound objectives. Don’t continue to the next step in defining Scope until the objectives and how they’re worded are confirmed and approved. 

Avoid vague expressions or unclear terms when writing the objectives and word them as statements. Objective clarity will help decide scope exclusions later. Be detailed with descriptive adjectives about time and capabilities. 

2. Gather Project Requirements

With a clear set of objectives, it’s time to gather your project’s requirements from the stakeholders. 

Requirements are compiled, documented, and managed throughout the project through requirement management upon initiation of the project, through the scope management process, and are a critical metric for scope validation. 

  • Business requirements are what the organization as a whole needs from project completion.
  • Stakeholder requirements are the needs of all involved parties and project participants.
  • Functional requirements are what a deliverable is supposed to do. 
  • Non-functional requirements describe how a deliverable should do what it’s supposed to.
  • Scheduling requirements are all the ones that have to do with project timing and scope boundaries.
  • Quality requirements are the checklists and processes needed for scope validation.

Improper requirements management can take a project off the rails. The list of project requirements directly affects the project deliverables’ positive or negative output. 

According to research presented in Pulse of the Profession , carried out by the Project Management Institute (PMI), “ a lack of clarity makes it nearly impossible to control scope creep. A continuous requirements improvement process helps establish the Scope of work to meet customer expectations. We see from prior research that erroneous requirements are among the top three reasons for project failure.”

Follow these steps to gather project requirements.

  • Assign roles: Identify internal and external stakeholders. Build your stakeholder management process for this project and assign roles to the stakeholders. 
  • Interview stakeholders: Talk to the project stakeholders to find out what they want to achieve from this project and their goals to help take it to the finish line. Manage stakeholder expectations and be clear that not all their requirements will be included in the project.
  • Gather and document: While conversing with stakeholders, document everything and analyze it to deduct the project requirements. Keep all documentation on hand for reference and regular updates. For large-scale documents, stakeholders can use automated document AI software for accuracy and precision.
  • List requirements: Asses all the gathered information and special requirements that align with the project’s objectives. Define the individuals required to work on the project and draft a schedule showing how long the requirements will take to complete.
  • Get approval: To ensure approval, ensure all requirements are necessary, specific, understandable, accurate, feasible, and testable.

To learn all the details about gathering and compiling requirements, read our guide on requirements gathering in the SlideModel blog.

3. Define project deliverables

Deliverables in project scope are all the tangible and intangible outputs that result from project deliveries. A deliverable list includes product and process deliverables for internal and external use. Create concrete lists of deliverables and label them in one of four categories:

  • Internal Process deliverables are outputs like weekly time-tracking reports.
  • External process deliverables include outputs like progress reports to stakeholders at the end of each phase. 
  • Internal product deliverables include outputs like an initial design draft or an article outline. 
  • External product deliverables are an app prototype or final website design.

Project deliverables are outlined in a work breakdown structure and scheduled using a Gantt Chart or another project management tool. To keep the project under control and in Scope, define one deliverable per requirement and arrange it below its relevant phase or control account. Deliverable shipping schedules can be at the end of every phase or through control accounts.

Deliverable shipping is generally timed along with the scope validation process. Creating a deliverables document leads to the validation process plan with a schedule, assigned roles, and a specific definition of what is considered done.

Write a clear and detailed checklist with all the characteristics of a deliverable to be considered as done, validated, and approved. The acceptance criteria must be decided upon together with all stakeholders on board. When these topics aren’t clear, confusion can arise during scope validation, and scope creep sneaks in quickly.

4. Create a work breakdown structure (WBS) 

A work breakdown structure (WBS) is a visual, hierarchical deconstruction of project scope. It describes all the work necessary to finish a project, broken down into more minor, trackable activities. The overall function of a work breakdown structure is to define all the tasks related to completing project deliverables on time and within budget. 

Visually, your WBS can be a bulleted list, an organizational chart, a tree diagram , or a Gantt chart. Let’s use a tree chart formation to examine the WBS components and levels in detail. 

  • Work packages: Groups of tasks that one person or team can do to reach a specific milestone in the project lifecycle
  • Milestones: Optional metrics to include in your WBS to measure how tasks and deliverables are shipped. These are evident in Gantt charts, where tasks and work packages can be scheduled collaboratively.

1. Work Breakdown Structure (WBS) PowerPoint Diagram

scope of business plan ppt

Your Work Breakdown Structure (WBS) diagrams can be represented in a tree hierarchy format with ease by implementing this PowerPoint template. Created with PowerPoint shapes, this document is fully editable to represent the cost/effort of each node, completion rate, status, and more.

Use This Template

Break apart the objectives and requirements with the work breakout structure to define all the tasks needed to complete the deliverables. An outline document is enough for small projects as a WBS, but any project with more than one objective and requirement needs more. You’ll need a visual structure that all relevant stakeholders can reference during the project lifecycle. A digital WBS in a Gantt or Pert chart will help visualize clear milestones and interdependencies between tasks inside a work package. 

From your Work Breakdown Structure, build out a task plan. Make a task plan for each project phase and define the order and task dependencies. Organize and prioritize tasks with the help of a project management tool and integrate it into a schedule to visualize time requirements for each task. Show clear interdependencies to help define the project’s critical path — the longest sequence of tasks and activities needed to finish the project.

5. Set project boundaries and exclusions / What’s In and Out of Scope? 

To successfully deliver a project, a scope assessment needs clear boundaries and exclusions highlighting what is in and out of Scope. Boundaries are based on the agreed-upon time, cost, and participants available per project phase and in total. Naming boundaries define the time a participant has to work on the project, the budget limit, and soft and hard deadlines. Exclusions are specific actions or outputs that the project will not work on and are the predefined out-of-scope characteristics.

Exclusions and out-of-scope requirements will always pop up during a project life cycle, and it’s the task of the scope management team to define if they stay out of Scope or if there needs to be a change to the overall Scope to include them. Avoiding scope creep is critical when defining what’s in and out of Scope.

An early definition of what is in and out of Scope helps control and manage scope creep before it starts. Along with a rigorous validation and shipping schedule, keeping a clear view of what’s in Scope or not not only helps a project move along more smoothly, it also takes it to completion in the allotted time.

Considering the project objectives, requirements, and deliverables, write a preliminary exclusions list to define the boundaries of where the line between in and out of Scope resides. Select and define which requirements discarded during the scoping session won’t be in this project scope. Do the same with the deliverables that didn’t make it to the deliverables list and add them to the list of out-of-scope deliverables. 

Furthermore, consider the overall budget and time constraints to add clear boundaries to the project scope. Some projects need clearly defined physical and legal boundaries as well. Include this list in the project scope document when dealing with change requests and unvalidated deliverables.

6. Set up validation and scope change management processes

Before wrapping up the project scope statement, you must formulate processes to validate deliverables and manage scope changes. Having processes before you need them saves time down the line. The first process is for scope validation, and the second is for managing scope change.

For both processes, assign roles to stakeholders, participants, or project management assistants who will be in charge of conducting validation and control quality sessions and the ones in charge of receiving and managing change requests. 

Define what constitutes the requirements for a deliverable to be verified before it can be validated, and set up a timeline that potentially matches the project phases. These are some of the tools and techniques you can use for scope validation processes:

  • Activities to check the quality and functionality of the deliverables.
  • Testing, inspection, demonstration, review, or audit, depending on the nature and complexity of the deliverables.
  • Approval checklist

Presenting Project Scope 

After defining the Scope for your project, you must share it with stakeholders to get buy-in and approval, especially from the ones that call the shots about money and time.

To present the project scope, take the — probably quite lengthy — project scope statement and turn it into a 30-minute presentation. Summarize the long text by pinpointing key details that stakeholders need to know and lay them out on presentation slides . 

At the end of this guide, you’ll find a case study where we share how to present the project scope using a real-life example. 

What is a Project Scope Statement? 

A project scope statement is a document that shares the outcome of a scoping session and becomes the foundation of a scope management process. Throughout the pages of a project scope statement, you share all developed key components and other elements supporting your project scope assessment.

When do you present a project scope statement? Before starting any project. You need it to get stakeholder buy-in, support, time, and resources to reach the project objectives. To present a project scope statement, you need a project scope presentation . 

Validating Project Scope 

To know if deliverables are shipping as they should, you must conduct scope validation sessions that assess, verify, and approve the work as it’s being done. Validation isn’t a final step after project completion but rather an ongoing, repeatable process to follow and document.

Scope validation is the process in which deliverables are approved or declined by the customer or the stakeholder. Internal deliverables are validated by team members and managers in charge of approving or denying completion of the deliverable. The client or final user validates external deliverables. 

When should you conduct validation sessions? At regular intervals during the project lifecycle. To keep processes aligned, schedule them according to the project phases. Follow the same process every time, record change requests or unapproved deliverables on time, and put them in the cycles or sprints as time and budget allow.

To validate deliverables, the people in charge of approving or not approving need to see all the relevant documentation about the project plan and the Scope. They must know the project objectives and have on hand the list of requirements plus the checklist that determines when a deliverable is done according to its characteristics. Likewise, they also must know boundaries and exclusions. 

Managing Scope Changes and Avoid Scope Creep  

As a project manager, you know that the only constant is change. No matter how tight your action plans and project scope assessments are, change requests always come in, and you must be prepared. The best way to be effective and cold-headed when facing change is to have a change management process .

Managing scope changes helps keep a strategic alignment, avoid cost overruns, and ensure timely project delivery. Not managing scope changes effectively leads to scope creep, the dreaded project management failure. It’s essential to have executive support in managing Scope and adapting to shifting business priorities. That’s why defining a scope management process that stakeholders agree on early in the project lifecycle is critical.

What is Scope Creep? 

Scope creep is the result of unsteady scope boundaries in a project lifecycle. It manifests as client requirements coming in late in the project, stakeholders pushing back deadlines, change requests not following an identified process, and stakeholder confusion about scope boundaries. 

Ultimately, scope creep hounds on employee morale and changes without foundation or proper planning make people stressed and uneasy. The risk of scope creep is always imminent unless you have processes to assess and manage out-of-scope requirements.

Project Change Request sample

A social media platform for small businesses wants to build a filterable analytics dashboard for its users with a set of basic metrics they analyze for their social behavior. The product team executed their requirements gathering process and built their requirements document. Later, all requirements were prioritized, and the Scope was defined following the process described earlier in this article.

After putting together a lengthy project scope document, the team must present the project scope using a pitch deck in order to get sponsorship, get approval, and kick off the project. 

Let’s look at how the project team prepared their presentation.

NB: The slides used in this case study were designed using our Free Scope Presentation Template .

Executive Summary

The executive summary is the first slide introducing stakeholders to the project scope presentation. The objective of an executive summary is to:

  • State the purpose of the presentation
  • Highlight the key discussion points and most notable facts 
  • Relay any significant results, conclusions, or recommendations

project scope template case study executive summary slide

Following the summary you can present the agenda.

For our example project, we will follow a templated list of items to discuss a pattern of the industry.

  • Project Objective 
  • Requirements Groups

Deliverables

  • Scope Statement
  • Scope validation 
  • Scope change processes

scope management case study agenda slide

To master your executive summary slide, read our complete guide on creating and presenting effective executive summaries .

Project Objective

This section sets the stage for the project scope, so it needs to be as clear as possible.

Use critical thinking techniques to clearly word, explain, and share the project’s goal and objectives. Frame the objective so stakeholders will see the value in the project and accept the Scope as you’ve assessed it.

Going back to our example project, the product team crafted the following paragraph to describe The project objective:

“Provide the users of our social media network access to summarized information of their social media activity (based on predefined KPIs) so they can measure and compare the performance of their content over a set of dimensions.”

This slide doesn’t need more information than the objective itself. Use contrasting colors like white text on a dark background or vice versa. Center-align the text on the slide, giving it a sense of importance. The overall project scope answers this objective, and it’s the North for all activities related to project scope management. 

project scope example case study objective slide

Requirements

After the requirements gathering and assessment process, the example project has over 50 requirements. In a scope presentation, reviewing each requirement and its details is unreasonable. Still, to transmit what is expected from the project and what will be the scope, the product team presents the groups of requirements using the project process grouping standard (Use Cases, User stories, Functional Requirements Documents, etc.) 

  • Number of Interactions
  • Last 7 days.
  • Last 30 days
  • Last Quarter
  • Hour of the Day
  • Type of Interaction
  • Type of Content
  • Requirement 4: Users will be presented with the option to download the report in Excel.
  • 2 Numerical Indicators
  • 2 Bar charts with date evolution over the X axis.
  • Filters will be at the top bar of the screen with drop-down lists for filter selection.
  • Requirement 6 : Applications will be built in HTML-CSS, Using React.
  • Requirement 7 :Data will be extracted from the current Activity DB
  • Requirement 8 :Data will be pre-processed for performance.

The list of high-level requirements can be displayed in several slides, specifically for the example the presenter decided to break down each requirement group.

Scope presentation template requirements list case study

As described earlier in the article, Deliverables are the inputs and outputs for requirements. The requirement is part of a deliverable. In the project scope presentation, external and high-level internal deliverables are the most important deliverables to share. 

Use a slide with a table layout to highlight deliverables per phase or control account. Incorporate labels, colors, or font differences to define which deliverables are internal/external process deliverables or internal/external process deliverables. Share any assigned stakeholder roles and points of contact between teams.

Architecture Deliverables

  • Database design Diagram
  • Architecture Diagram
  • Integration Design Diagram
  • Dashboard Mockups

Back End Deliverables

  • Database Schema Implementation
  • Batch Process To Load Database
  • Service for Dimensions Population
  • Reach Service
  • Interactions Service
  • Service to Export Information In Excel

Front End Deliverables

  • Filtering Component
  • KPI’s Numeric Component
  • Overtime Charts
  • Dashboard Screen

project scope management deliverables presentation slide

Work Breakdown Structure

Your complete work breakdown structure likely won’t fit on a presentation slide. Minimize it to include high-level topics and keep the full details in the project scope statement. Incorporate color coding to separate the WBS levels visually. Add labels for the stakeholders in charge of work packages and place notes for validation sessions at phases or milestones. 

For the example under discussion, the project team broke down the work by high-level work area, as they will use a Cascade Model Process.

  • Analyse Activity Schema
  • Define the Calculation of KPI
  • Understand the Scope of the Calculation
  • Understand Contexts of Use
  • Discuss Users Scenarios
  • Analyse devices
  • UX Analysis
  • ETL from Transactional DB
  • 3 Layers Design
  • Service Components
  • Integration
  • Usability and Navigation Definitions
  • Design Layout
  • Design Visuals
  • Design Mockups
  • Database Implementation
  • Data Access Implementation
  • Services Implementation
  • Implement Mockups
  • Implement Navigation
  • Implement Filtering
  • Implement Query Calls
  • Test Back End
  • Test Front End
  • Test Integration
  • ETL Initial Data
  • Deploy ETL Processes
  • Deploy Web Package

As you can see in the example bellow, the presenter decided to showcase the WBS in different slides, going layer after layer in the explanation, instead of creating a cluttered diagram in one slide.

Example of WBS slide for a Project Scope template - work breakdown structure case study

Scope Statement – Boundaries and Exclusions 

In our specific example, the scope Statement lists the requirements that will be considered In-Scope and those that will be left aside for future iterations.

In-Scope: Requirements 1, 2, 3, 5, 6, 7

Out-Scope: Requirements 4, 8

project scope statement presentation slide

Validation Process

Once the project team defines the scope, it needs to be validated by specific stakeholders. Generally, even this scope presentation is part of the validation process.

The stages of validation of the current Scope are:

  • Focus Group
  • Prototyping
  • Plan Activities
  • Create Estimations
  • Simulate Resource allocation
  • Present Scope to PMO

Scope Change Plan and Management Process

The final slides on the Project Scope Presentation share the planned processes for Scope Change. In this specific example, the Project Team decided to follow this process:

scope change process powerpoint diagram

Project Scope holds a high bar for ensuring project success in project management. Attaining complete stakeholder approval of a Scope Management document is essential for every step after project initiation. 

In this guide, we reviewed all the basics of Project Scope and actionable guidance on presenting a Scope Management slide deck to get approval from stakeholders. All the slides you need for a Scope Presentation are available as PowerPoint templates inside the SlideModel template library.

scope of business plan ppt

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Scope and value of Business plan

Scope of business plan.

The setting of objectives is a decision-making process that reflects the aims of the entire organization. Generally, it begins at the top with a clear statement of the organization’s purpose. If well communicated and clearly defined down through the hierarchy, this statement becomes the basis for short-range objectives in the annual budget.

Management articulates the overall goals to and throughout the organization in order to coordinate all business activities efficiently and effectively. It does this by:

  • Formulating and distributing a clear, concise statement of the central purpose of the business
  • Leading in the formulating of long-range organizational goals
  • Coordinating the activities of each department and division in developing derivative objectives
  • Ensuring that each subdivision participates in the budget process
  • Directing the establishment of short-term objectives through constructing the annual budget
  • Evaluating actual results on the basis of the plans

The organization must know why it exists and how its current business can be profitable in the future. Successful businesses define themselves according to customer needs and satisfaction with products and services.

Management identifies the customers, their buying preferences, product sophistication, geographical locations, and market level. Analyzing this data in relation to the expected business environment, management determines the future market potential, the economic variables affecting this market, potential changes in buying habits, and unmet needs existing now and those to groom in the future.

In order to synchronize interdepartmental planning with overall plans, management reviews each department’s objectives to ensure that they are subordinate to the objectives of the next higher level.

Management quantifies objectives by establishing goals that are: specific and concrete, measurable, time-specific, realistic and attainable, open to modification, and flexible in their adaptation.

Because goals are objective-oriented, management generally lists them together. For example:

  • Profit objectives state performance in terms of profits, earnings, return on investments, etc. A goal might call for an annual increase in profits of 15 percent for each of the next five years.
  • Human resources. This broad topic includes training, deployment, benefits, work issues, and qualifications. In an architectural consulting firm, management might have a goal of in-house CAD training for a specified number of hours in order to reach a certain level of competence.
  • Customer service. Management can look at improvements in customer service by stating the number of hours or the percentage of complaints it seeks to reduce. The cost or cost savings are stated in dollar terms. If the business sells service contracts for its products, sales goals can be calculated in percentage and dollar increases by type and level of contract.
  • Social responsibility. Management may desire to increase volunteerism or contributions to community efforts. It would calculate the number of hours or dollars within a given time frame.

Evaluating proposed plans

Management undertakes a complete review and evaluation of the proposed strategies to determine their feasibility and desirability. Some evaluations call for the application of good judgment—the use of common sense. Others use sophisticated and complex mathematical models.

Prior to directing the development of a profit budget for the upcoming annual period, management resolves issues related to the internal workings of the organization from a behavioral point of view. For example:

  • Ensuring managerial sophistication in the application of the plans
  • Developing a realistic profit plan, and assigning adequate responsibility and control
  • Establishing appropriate standards and objectives
  • Communicating the attitudes, policies, and guidelines to operational and administrative personnel
  • Attaining managerial flexibility in the execution of the plans
  • Evaluating and updating the system to harmonize with the changing operational and business environments

Stating actions and resources required

With the objectives and forecasts in place, management decides what actions and resources are necessary in order to bring the forecast in line with the objectives. The basic steps management plans to take in order to reach an objective are its strategies.

Strategies exist at different levels in an organization and are classified according to the level at which they allocate resources. The overall strategy, often referred to as the grand strategy, outlines how to pursue objectives in light of the expected business environment and the business’s own capabilities. From the overall strategy, managers develop a number of more specific strategies.

  • Corporate strategies address what business(es) an organization will conduct and how it will allocate its aggregate resources, such as finances, personnel, and capital assets. These are long-term in nature.
  • Growth strategies describe how management plans to expand sales, product line, employees, capacity, and so forth. Especially necessary for dynamic markets where product life cycles are short, growth strategies can be (a) in the expansion of the current business line, (b) in vertical integration of suppliers and end-users, and (c) in diversifying into a different line of business.
  • Stability strategies reflect a management satisfied with the present course of action and determined to maintain the status quo. Successful in environments changing very slowly, this strategy does not preclude working toward operational efficiencies and productivity increases.
  • Defensive strategies, or retrenchment, are necessary to reduce overall exposure and activity. Defensive strategies are used: to reverse negative trends in profitability by decreasing costs and turning around the business operations; to divest part or all of a business to raise cash; and to liquidate an entire company for an acceptable profit.
  • Business strategies focus on sales and production schemes designed to enhance competition and increase profits.
  • Functional strategies deal with finance, marketing, personnel, organization, etc. These are expressed in the annual budget and address day-to-day operations.

Value of Business plan

A business plan is critical to the success of any business. And, if the plan is frequently reviewed and updated, it becomes increasingly valuable over time. It provides valuable historical information to help a business owner make decisions on the future direction of the company. Effective business planning will enable the owner to both maximize profits and maximize the value of the company.  If the exit strategy of the owner is to sell the business, effective business planning during the life of the business will contribute to successfully selling the business at the best possible price.

What Information is Included in a Business Plan?

The information included in a business plan is also of great interest to a prospective buyer who is evaluating the business as a possible acquisition. Some of the major business areas that should be included in a business plan that would also be of interest to a buyer include the following:

–        Mission Statement and Company Philosophy

–        Company History

–        Short term and long term revenue and profit goals

–        Organizational structure

  • Current Organization
  • Organizational growth plan
  • Employee development

–         Marketing

  • Target market
  • Major accounts and/or markets
  • Sales and marketing strategies
  • Competition

–        Operations

  • Current processes
  • Planned and proposed changes to operations

–         Product and\or service lines

–        Documented history of key successes and failures during the life of the business

Complete and accurate books and records are essential for the successful sale of any business. Typically, a buyer’s first exposure to the confidential details of a business comes in the form of a comprehensive document covering the financial and operational aspects of the business. Presenting buyers with the details contained in a good business plan will make a great first impression and can shorten the time it takes to close the sale. Providing buyers with extensive details upfront can shorten the buyer’s evaluation and due diligence process.

The growth potential of a business is usually a huge factor in a buyer’s decision to acquire that business. Potential can be difficult to prove, but a well-documented business plan can give a buyer a comfortable level of understanding about the potential opportunities and challenges for the business in the future.

A business owner’s claims about potential are sometimes discounted by buyers, unless those claims are supported by the type of in-depth historical and current data that is included in a good business plan. A business plan not only helps to prove potential; it also provides the buyer with several ideas on a possible road map on how to achieve that potential.

The first time business owner will sometimes experience anxiety over their ability to successfully manage a business, even though they may be highly qualified. A business plan should help to relieve that anxiety.  The plan not only provides valuable information on how to manage a business, but also enables the buyer to benefit from the years of experience of the previous owner. The new owner can see a history of both successes and failures in the business, and they will benefit from the lessons learned by the previous owner.

Operations and Management

The operations and management component of your plan is designed to describe how the business functions on a continuing basis. The operations plan highlights the logistics of the organization, such as the responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Financial Components of Your Business Plan

After defining the product, market and operations, the next area to turn your attention to are the three financial statements that form the backbone of your business plan: the income statement, cash flow statement, and balance sheet .

The income statement is a simple and straightforward report on the business’ cash-generating ability. It is a scorecard on the financial performance of your business that reflects when sales are made and when expenses are incurred. It draws information from the various financial models developed earlier such as revenue, expenses, capital (in the form of depreciation), and cost of goods. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result, which is either a profit or loss. In addition to the income statements, include a note analyzing the results. The analysis should be very short, emphasizing the key points of the income statement. Your CPA can help you craft this.

The cash flow statement is one of the most critical information tools for your business, since it shows how much cash you’ll need to meet obligations, when you’ll require it and where it will come from. The result is the profit or loss at the end of each month and year. The cash flow statement carries both profits and losses over to the next month to also show the cumulative amount. Running a loss on your cash flow statement is a major red flag that indicates not having enough cash to meet expenses-something that demands immediate attention and action.

The cash flow statement should be prepared on a monthly basis during the first year, on a quarterly basis for the second year, and annually for the third year. The following 17 items are listed in the order they need to appear on your cash flow statement. As with the income statement, you’ll need to analyze the cash flow statement in a short summary in the business plan. Once again, the analysis doesn’t have to be long and should cover highlights only. Ask your CPA for help.

The last financial statement you’ll need is a balance sheet. Unlike the previous financial statements, the balance sheet is generated annually for the business plan and is, more or less, a summary of all the preceding financial information broken down into three areas: assets, liabilities and equity.

Balance sheets are used to calculate the net worth of a business or individual by measuring assets against liabilities. If your business plan is for an existing business, the balance sheet from your last reporting period should be included. If the business plan is for a new business, try to project what your assets and liabilities will be over the course of the business plan to determine what equity you may accumulate in the business. To obtain financing for a new business, you’ll need to include a personal financial statement or balance sheet.

In the business plan, you’ll need to create an analysis for the balance sheet just as you need to do for the income and cash flow statements. The analysis of the balance sheet should be kept short and cover key points.

Supporting Documents

In this section, include any other documents that are of interest to your reader, such as your resume; contracts with suppliers, customers, or clients, letters of reference, letters of intent, copy of your lease and any other legal documents, tax returns for the previous three years, and anything else relevant to your business plan.

Some people think you don’t need a business plan unless you’re trying to borrow money. Of course, it’s true that you do need a good plan if you intend to approach a lender–whether a banker, a venture capitalist or any number of other sources–for startup capital. But a business plan is more than a pitch for financing; it’s a guide to help you define and meet your business goals.

Just as you wouldn’t start off on a cross-country drive without a road map, you should not embark on your new business without a business plan to guide you. A business plan won’t automatically make you a success, but it will help you avoid some common causes of business failure, such as under-capitalization or lack of an adequate market.

As you research and prepare your business plan, you’ll find weak spots in your business idea that you’ll be able to repair. You’ll also discover areas with potential you may not have thought about before–and ways to profit from them. Only by putting together a business plan can you decide whether your great idea is really worth your time and investment.

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Strategic Development for Enhanced Elevation in TN

Strategic Development for Enhanced Elevation in TN

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How Fast Should Your Company Really Grow?

  • Gary P. Pisano

scope of business plan ppt

Growth—in revenues and profits—is the yardstick by which the competitive fitness and health of organizations is measured. Consistent profitable growth is thus a near universal goal for leaders—and an elusive one.

To achieve that goal, companies need a growth strategy that encompasses three related sets of decisions: how fast to grow, where to seek new sources of demand, and how to develop the financial, human, and organizational capabilities needed to grow. This article offers a framework for examining the critical interdependencies of those decisions in the context of a company’s overall business strategy, its capabilities and culture, and external market dynamics.

Why leaders should take a strategic perspective

Idea in Brief

The problem.

Sustained profitable growth is a nearly universal corporate goal, but it is an elusive one. Empirical research suggests that when inflation is taken into account, most companies barely grow at all.

While external factors play a role, most companies’ growth problems are self-inflicted: Too many firms approach growth in a highly reactive, opportunistic manner.

The Solution

To grow profitably over the long term, companies need a strategy that addresses three key decisions: how fast to grow (rate of growth); where to seek new sources of demand (direction of growth); and how to amass the resources needed to grow (method of growth).

Perhaps no issue attracts more senior leadership attention than growth does. And for good reason. Growth—in revenues and profits—is the yardstick by which we tend to measure the competitive fitness and health of companies and determine the quality and compensation of its management. Analysts, investors, and boards pepper CEOs about growth prospects to get insight into stock prices. Employees are attracted to faster-growing companies because they offer better opportunities for advancement, higher pay, and greater job security. Suppliers prefer faster-growing customers because working with them improves their own growth prospects. Given the choice, most companies and their stakeholders would choose faster growth over slower growth.

Five elements can move you beyond episodic success.

  • Gary P. Pisano is the Harry E. Figgie Jr. Professor of Business Administration at Harvard Business School and the author of Creative Construction: The DNA of Sustained Innovation (PublicAffairs, 2019).

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Ten of Australia’s top companies lack clear plans to stop using or supporting fossil fuels, report says

UTS researchers say firms including Coles, Woolworths, Telstra, Rio Tinto and Qantas have no ‘comprehensive, independently verified and fully costed plan’ to reduce emissions

  • Follow our Australia news live blog for latest updates
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Ten of Australia’s best-known corporations – including Coles, Telstra, Woolworths and Qantas – have no clear plans to stop using or supporting fossil fuels despite having targets to reach net zero greenhouse gas emissions, according to a report.

The companies were also failing to report clearly the impact of their businesses on the climate warming caused directly or indirectly from land clearing.

The report, from the University of Technology Sydney’s Institute for Sustainable Futures, examined in detail the climate plans and disclosures of Coles, Woolworths, Telstra , Rio Tinto, Qantas, BlueScope Steel, Origin, AGL, Cleanaway and South 32. The companies were selected as major emitters in their respective industries.

Commissioned by a new Australia-based advocacy group, Climate Integrity , the report said none of the 10 Australian companies had a “comprehensive, independently verified and fully costed plan for reducing their emissions” that was in line with a scientifically credible pathway to decarbonise quickly enough to keep global heating to 1.5C.

Researchers assessed companies against guidelines laid out in late 2022 by a UN expert group after broad concerns that corporate climate pledges were often vague, inconsistent, incomplete, over-reliant on offsets and in some cases amounted to greenwashing.

The level of alignment of the Australian companies with the UN group’s recommendations was “disappointingly low”, the report said.

Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup

Fewer than half the companies were on track to meet their own targets, the report claimed, and none had targets or plans to stop using fossil fuels.

“The lack of scientific alignment with the need to rapidly phase out fossil fuels is particularly concerning,” the report said. “Without commitments to phase out fossil fuels, it is difficult to see how net zero pledges can be fulfilled.”

The report found companies had aligned themselves with a “plethora of frameworks, assessments, standards and disclosure requirements” that were mostly voluntary.

It said none of the companies disclosed enough information for researchers to understand if or how companies were accounting for the impact of land clearing in their climate targets.

Claire Snyder, the director at Climate Integrity, said there was little consistency in the achievements and failings across the company plans. “That demonstrates there’s no clear standard or shared understanding among companies of what [a credible net zero plan] should look like,” she said.

Snyder said Climate Integrity would push for policy change in Australia that would give the public confidence that claims made by companies were credible and give industry a clearer set of expectations.

The Albanese government is expected to introduce legislation later this year to mandate what information companies should disclose in their financial reports relating to the risks from climate change.

Alison Atherton, one of the report’s authors at UTS, said the research showed a “high degree of variability in the information being provided publicly by companies”.

“Decision makers, researchers, consumers and investors need to be able to have confidence in these plans,” she said.

Only three companies – Woolworths, Coles and Telstra – had targets verified by the international Science Based Targets initiative .

Woolworths Group said it was making “good progress on reducing our reliance on fossil fuels, with our operations switching to 100 per cent renewable electricity within the next two years, and our fleet of 1,200 home delivery trucks set to become electric by 2030”.

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Coles said it was committed to cutting emissions and being more efficient with resources “in areas over which we have control and influence”.

About 90% of the company’s emissions were generated in its supply chain, the company said, and it was working with 75% of suppliers to help them set emissions reduction targets by 2027.

“We are on track to achieve our Scope 1 and 2 emissions target to reduce greenhouse gas emissions by more than 75% by June 2030. This includes our 100% renewable electricity goal by June 2025.”

The waste management company Cleanaway said it stood proudly by its emissions reduction targets for CO2 and methane – the latter of which accounts for three-quarters of the company’s footprint due to releases from landfills. Capturing methane and lowering emissions in its heavy vehicle fleet, including using alternative fuels and trialling hydrogen and electric trucks, was a focus.

Telstra’s head of environment, Tom Penny, said the company’s target to cut direct and indirect emissions by 50% by 2030 “includes efforts to reduce our dependence on fossil fuels”.

“Telstra takes its role in helping to tackle climate change seriously,” he said, adding the company had a commitment to invest in enough renewable energy generation to match its own electricity consumption by 2025.

AGL, Australia’s biggest greenhouse gas emitter , said its climate transition action plan outlined its pathway to becoming a net zero company by 2050, including its direct and indirect emissions.

It was “targeting the closure of our last thermal power station, Loy Yang A, by the end of FY35, at which point we will be net zero for operated Scope 1 and 2 emissions”.

AGL said it expected to spend $8bn to $10bn developing “12 GW of new renewables and firming capacity by the end of 2035” and would “build out the new renewables and firming that will be needed to help Australia meet its climate targets”.

The gas and electricity company Origin said gas would play an “important role in the energy mix for some time, to support variable renewable energy output” and for “customers who cannot easily electrify and for which there is no viable alternative to gas available today”.

It welcomed scrutiny of its “appropriately ambitious” climate plans and expected to meet its 2030 targets largely through direct actions “with limited use of offsets only for residual emissions that are hard to abate”.

Qantas said aviation was a “hard-to-abate sector” and “high integrity offsets were key to us meeting emission reduction targets until sustainable aviation fuel and low and zero-emissions technologies are more readily available”.

The company’s interim target to use 10% sustainable aviation fuel by 2030 would be mostly met with a deal with Airbus and Boeing to secure up to 500m litres.

The Perth-based mining company South 32 said as well as having a target to reach net zero emissions across all areas of the business by 2050, the company had a medium-term target to halve its operational emissions from 2021 levels by 2035.

The mining and metals company said its climate change action plan, first released in 2022, would be reviewed every three years. Having targets aligned with the global Paris agreement was “a critical step as we continue to assess options to align our business to prosper in a low-carbon world”.

The company did not have interim targets related to emissions from the use of its products, but was working with suppliers and customers to reduce those emissions.

Bluescope Steel said it was not in a position to respond and Rio Tinto declined to comment.

  • Greenhouse gas emissions
  • Climate crisis
  • Fossil fuels
  • Australian politics

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