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How to Build Your Best Business Plan: A Step-by-Step Guide

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Every publishing company can benefit by carefully preparing a business plan. If you haven’t done one, the time to do it is now. There are two main purposes for writing that plan.



  • Your business plan will serve as your guide during the lifetime of your publishing company.


      It’s the blueprint of your business. The plan will provide you with tools for analyzing your operation and implementing changes that will increase your sales and, ultimately, your profitability.


  • A business plan is a requirement if you’re going to be seeking financing


    . It will give potential lenders or investors detailed information on all aspects of your publishing company’s past and current operations. It also provides projections into the future.


If you do business internationally, a business plan provides one more benefit–a standard means of evaluating the business potential of your publications in a foreign marketplace.


[subhead] The Business Plan Outline

Business plans focus on three different areas–the organization, marketing, and financial matters. What follows is a suggested outline of the material you should include in your plan. The final business plan may vary according to your specific needs and/or the individual requirements of a lender or investor.

I. Cover Sheet: This serves as the title page and presents:

    • The name, mailing address, e-mail address, and phone number of your company
    • The names, titles, addresses, and phone numbers of the owners/corporate officers
    • The month and year your plan was prepared
    • The name of the person who prepared it
    • The copy number of the plan (e.g., 1 of 3). This can help you keep track of which copy of the business plan is at which lender, for instance, so it can be returned later.

II. Executive Summary(or Statement of Purpose)

This is the thesis statement, and it presents the objectives of the business plan. Use thekey-word approach (who, what, where, when, why, how, how much) to summarize the following:

    • Your company (who, what, where, when)
    • Your management (who and what their strengths are)
    • Your objectives (what and why you will be successful)
    • Your need, if any, for financing (why, how much, andhow you intend to repay the loan or benefit the investor)



the Executive Summary (a.k.a., Statement of Purpose) is the second item in the business plan, you should defer writing it until your whole plan is complete. The reason? Leave it for last because the summary must reflect your plan’s specific contents.III. Table of Contents

The contents list provides quick access to major topics covered in your plan.

IV. Part I: The Organizational Plan


This section should include a “Summary Description of the Business” statement followed by information on the “administrative” end of your company.

A. Summary Description of the Business

In a paragraph or two, give a broad overview of the nature of your publishing company, telling when and why it was formed. Then complete the summary by briefly addressing:

    • Mission (Project short- and long-term goals.)
    • Publishing model (Describe your company’s model and explain why it’s unique to your industry.)
    • Strategy (Give an overview of the strategy, focusing on short- and long-term objectives.)
    • Strategic relationships(Tell about any existing strategic relationships.)
    • Risks (Describe those that your company will face–both externally and internally.)

B. Products or Services

    • If you are the manufacturer and/or the wholesale distributor of your publications, describe your products and present information on printers and outside services.
    • If you are also the retailer and/or an e-tailer of your publications, describe the products you sell and discuss handling of inventory and fulfillment.
    • If you provide a service, describe it and tell why the service is integral to your publications and products.

C. Intellectual Property

  • Address copyrights, trademarks, and/or patents, explaining who owns the rights. (Backup for this section–in the form of registrations, photographs, diagrams, and the like–will appear in “Supporting Documents”; see below.)

D. Location

  • Describe your projected or current location. (If the location is important in connection with marketing, you should also describe it in Part II, “The Marketing Plan,” outlined below.)
  • Project costs associated with the location.
    • Refer to relevant legal agreements, utilities forecasts, etc., in “Supporting Documents.”

E. Legal Structure

  • Describe your company’s legal structure and explain why it is advantageous for the firm.
    • List the owners and/or corporate officers and describe their strengths. Include resumes.

F. Management

  • List the people who are (or will be) running the business.
  • Describe their responsibilities and abilities.
  • Project their salaries.
  • Refer to their resumes in “Supporting Documents.”

Note: If you are focusing on “total quality management” (TQM), you may wish tocombine Sections F & G and address it at this point!G. Personnel

    • Note how many employees you have (or will have) and in what positions.
    • Describe their qualifications.
    • Note how many hours they will work and at what wages.
    • Project needs for adding employees.

H. Accounting & Legal

    • Tell what accounting system you have (or will set up) for daily and royalty accounting, what tax accountant you will you use, and who will perform periodic financial statement analyses.
    • Say who you have retained (or will retain) as a business/publishing attorney.


I. Insurance

  • Note the kinds of insurance you do or will carry (property and liability, life and health).
  • Tell what the costs are and who you do or will use as a carrier.

J. Security

    • Address security in terms of inventory control and theft of information–online and off.
    • Project related costs.

V. Part II: The Marketing Plan


The Marketing Plan section of a business plan defines all of the components of marketing strategy, addressing the details of market analysis, sales, advertising, and public relations campaigns. It should integrate traditional (offline) programs with new media (online) strategies. 

A. Overview and Goals of Your Marketing Strategy

In this section, set and explain the goals of your marketing strategy and what they will mean to your company. Examples are creating a strong brand, building a solid customer base, and increasing the sales of your publications and services. Whatever you do in your marketing should support your goals.

B. Market Analysis

This should cover:

    • Target Market(s), which you should identify with demographics, psychographics, and niche market specifics
    • Competition, which you should describe in terms of major competitors, assessing their strengths and weaknesses
    • Market Trends, including both trends in publishing and buyer/reader trends
    • Market Research, including information on methods of research, database analysis, and a summary of results

C. Marketing Strategy

The elements to include here are:

    • A general description (Note budget percentage allocations online and offline with expected Return on Investment–ROIs.)
    • Method of sales and distribution (bookstores, specialty stores, catalogs, direct mail, Web site, any others)
    • Packaging (covers, binding, quality considerations, and other aspects)
    • Pricing (price strategy and competitive position)
    • Branding (author, genre, etc.)
    • Database marketing (personalization)
    • Sales strategies (direct sales, direct mail, e-mail, affiliate, reciprocal, and viral marketing)
    • Sales incentives/promotions (samples, coupons, online promotions, add-ons, rebates, etc.)
    • Advertising strategies (traditional, Web/new media, long-term sponsorships)
    • Public relations (online presence, events, press releases, interviews, book signings, etc.)
    • Networking (memberships and leadership positions)

D. Customer Service

  • Describe your customer service activities.


  • Explain the expected outcomes of achieving excellence.


E. Implementation of Marketing Strategy

  • Describe in-house responsibilities.


  • Note out-sourced functions (advertising, public relations, marketing firms, ad networks, etc.)


F. Assessment of Marketing Effectiveness

New companies cannot include this section, however existing companies should provide it after making periodic evaluations.

VI. Part III: Financial Documents

This section of the business plan is the quantitative interpretation of everything you stated in the organizational and marketing sections. Do not do this part of your plan until you have finished those two sections.

Financial documents are the records used to show past, current, and projected finances. The following are the major financial documents you will want to include in your Business Plan. It’s easiest to do them in the order presented because they build on each other, with later documents utilizing information from previous ones.


A. Summary of Financial Needs

(needed only if you are seeking financing)

This section should outline why you are applying for financing and how much capital you require.


B. Loan Fund Dispersal Statement

(needed only if you are seeking financing)

If you are seeking financing, this statement should tell how you intend to disperse the loan funds. You’ll want to back up that explanation with supporting data. For example, if you’re using the funds for working capital–such as for printing and marketing, tell how much will be required for each and back up the expenditures with printer quotes and advertising rate sheets.

C. Pro Forma Cash Flow Statement (Budget)

This document projects what your Business Plan means in terms of dollars. It shows cash inflow and outflow over a period of time and is used for internal planning. It’s of prime interest to traditional lenders in terms of how you intend to repay your loan plus interest.

Cash flow statements show how muchand when cash must flow in and out of your company.

D. Three-Year Income Projection

Use the revenue and expense totals from the Pro Forma Cash Flow Statement for the first year’s figures and project for the next two years according to expected economic and industry trends to create this Pro Forma Income Statement (a.k.a. Profit and Loss Statement or P&L).

E. Projected Balance Sheet

Project your company’s assets, liabilities, and net worth at the end of its next fiscal year.

F. Break-Even Analysis

The break-even point is the point at which your publishing company’s expenses exactly match the sales volume. It can be expressed either as total revenue exactly offset by total expenses or as total units of production, the cost of which exactly equals the income derived from their sales. This analysis can be done either mathematically or graphically. Draw the revenue and expense figures from the three-year income projection.

If your publishing company is new and has not yet begun operations, end the financial section here and add a Personal Financial History (see “Owners’ Financial Statements” below).

If yours is an established publishing company, include the following actual performance statements:


G. Profit & Loss Statement (Income Statement)

This moving picture, which shows your business financial activity monthly and annually over a period of time, is an excellent tool for assessing your business. Transfer your revenue and expense totals for a fiscal period to this statement.

H. Balance Sheet

Displaying the condition of the publishing company as of a fixed date, the balance sheet will show you whether your financial position is strong or weak. It’s usually done at the close of an accounting period and covers assets, liabilities, and net worth.

I. Financial Statement Analysis

In this section, you’ll use your income statements and balance sheets to develop a study of relationships and comparisons of: (1) Items in a single year’s financial statement, (2) Financial statements for a period of time, and/or (3) Your statements with those of other businesses. Measures are expressed as ratios or percentages that can be used to compare your business with industry standards.

If you’re seeking a lender or investor, ratio analysis as compared to industry standards will be especially critical.

Documents in this section often include:

    • Liquidity Analysis (net working capital, current ratio, quick ratio)
    • Profitability Analysis (gross profit margin, operating profit margin, net profit margin)
    • Debt Ratios (debt to assets, debt to equity)
    • Measures of Investment (return on investment)
    • Vertical financial statement analysis (relationships of components in a single financial statement)
    • Horizontal financial statement analysis (percentage analysis of the increases and decreases in the items on two or more compared Profit and Loss Statements or balance sheets; the P&Ls or balance sheets might cover different time periods for instance.)

J. Business Financial History

This is a summary of financial information about your publishing company from its start to the present. Frequently, the Business Financial History is the same document as the Loan Application. If you have completed the rest of the financial section, you should have all the information you need to transfer to this document.

VII. Part IV: Supporting Documents

This section of your plan will contain all of the records that back up the three main parts of your business plan. The most common supporting documents are:

A. Personal Resumes

Include resumes for owners and management. A resume should be a one-page document that covers work history, educational background, and professional affiliations and honors, with a focus on special skills relating to the subject’s position in the company.

B. Owners’ Financial Statements

This statement of personal assets and liabilities will be part of the financial section if you are new publisher.

C. Credit Reports

Provide business and personal credit references from printers, venders, credit bureaus, and banks.

D. Copies of Leases, Mortgages, Purchase Agreements, Etc.

Include all agreements currently in force between your publishing company and a leasing agency, mortgage company, or other agency.

E. Letters of Reference

These letters should recommend you as a reputable and reliable businessperson worthy of being considered a good risk. Supply both business and personal references.

F. Contracts

Include all publishing and other business contracts, both completed and currently in force.

G. Other Legal Documents

This section should present all legal papers pertaining to your company’s legal structure, proprietary rights, insurance, etc. Two examples are limited partnership agreements and shipping contracts.

H. Miscellaneous Documents

All other documents that have been referred to, but not included in the main body of the plan, should appear here. Examples include location plans, demographics, competition analysis, advertising rate sheets, and cost analysis.


[subhead] Putting Your Plan Together

Your business plan should look professional. It should be no more than 30 to 40 pages in length, excluding supporting documents.

If you’re seeking a lender or investor, include only the supporting documents that will be of immediate interest to them. Keep the others with your own copy, where they will be available on short notice. Have your plan neatly bound at your local print shop or in blue, black, or brown covers purchased at a stationery store. Make copies for each lender or investor you wish to approach. Do not give out too many copies at once, and keep track of each copy. If you are turned down for financing, be sure to retrieve your business plan.


Keep Your Business Plan Up-to-Date!!!

Your plan will be beneficial only if you update it frequently to reflect what’s happening within your publishing company. Compare projections against what actually happened. Use the results to analyze the effectiveness of your operation. Then implement changes that will give you a competitive edge leading to greater profitability.


Linda Pinson is the owner of Out of Your Mind… and Into the Marketplace™–the publisher of educational “how-to” books and software for new and established businesses. She is also the author of eight books, including “Anatomy of a Business Plan,” as well as the developer of “Automate Your Business Plan” 10.0 for Windows 95, 98, NT, 2000, ME, and XP. Her books and software are used as course materials in a wide variety of educational institutions as well as for training and development within corporations. For more information, visit www.business-plan.com.


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