What Are the Key Assumptions of a Business Plan?

by Robert Rimm - Updated September 26, 2017

All of the constituents of a business plan, from banks and vendors to stockholders, have the right to expect accurate information across all relevant business categories. These include a business's strategy and objectives -- and the approach to achieving them -- demonstration of effective control over all organizational aspects and key financial projections. The plan is meant to attract investors and joint-venture partners, as well as to provide a framework for all major business decisions.

Accurate Business Description

Plans typically begin with an executive summary, which highlights all key matters that point to a venture's potential success. This section must be convincing for readers to continue with the rest of the document. The business description that follows provides an opportunity to delve into considerable detail regarding the organization's history, structure, employees, current and potential products, competitive landscape, opportunities, strengths, mission statement and future goals.

Management Qualifications

All parties to a business plan have the right to expect a detailed look at current management and their associated qualifications. This includes résumé details showing all relevant skills and experience, together with each management member's responsibilities. Additional information typically includes salaries, ownership details, organizational charts, staffing plans and particulars about the board of directors.

Video of the Day

Brought to you by Techwalla
Brought to you by Techwalla

Current Operations and Marketing Plans

Businesses that are already established are expected to provide key details on current operations, trends and growth plans. For those organizations that are either new or expanding into different markets, they are called to provide information on competitors, market size, expected growth rates, sales projections and timelines, target markets and geographies, regulatory requirements and well-developed marketing plans. Test marketing also represents an essential component that provides an educated and well-planned approach to reaching the public.

Financial Data and Projections

Financial projections remain subject to the vagaries of the overall economy and competitive situation, and they typically come with a disclaimer to that effect. Well-prepared plans will include revenue, income and cash-flow projections, equipment costs, break-even requirements, previous financial statements, available collateral, accounts payable and receivable, and the personal financial statements of company owners with a significant stake.

About the Author

Robert Rimm graduated from the University of Pennsylvania and founded 88keys.com to provide education, writing and communications services for clients within the nonprofit, arts and education communities in the United States, Europe and Russia. His key interests include art and culture, social entrepreneurship, education, the environment and human rights. He is fluent in French and Russian, and is a widely published author.

Cite this Article A tool to create a citation to reference this article Cite this Article