How to write a business plan
The overwhelming feeling of creating a business plan cripples some of us. Business plans, as viewed by business majors, is the most work-involved, compiled piece of work they will most likely ever have to write. Business plans, though, do not have to be hard to create. They are actually quite easy to put together once you have all of the information you require.?Simply put, business plans are just blueprints of the business or idea. That’s it.
The plan will expose the strengths and the weaknesses of your business. That is a positive, as you, the entrepreneur, can then prepare to combat those weaknesses and take advantage of the strengths. ??
The Pre-Planning Questionnaire ??
The business plan is also quite important when communicating with investors. They will surely want to see one. When preparing to write a business plan, make sure that you have already answered some basic questions, such as:
- Am I ready to operate a business?
- Do I have a product(s) or services to offer?
- Have I researched other types of businesses? (Such as those in broad economic sectors: manufacturing, retail, etc.)
- Have I thought about franchising?
- Have I got a location in mind?
- Have I researched principles of site selection, advantages and disadvantages in the types of sites, principles of lease negotiations, etc.?
- Do I have business consultants?
- What is my financial position, such as credit rating and investment costs?
Do Your Research
When sitting down to write a business plan you should have a host of information and research in front of you. You should also be:
- ready to go into business (or already are)
- have a basic business concept, have product(s)/service(s)
- know/have the location of your business
- you have hired an accountant/attorney
- you know what your financial position is.
If you have done all of the previous steps, then you are ready to move to the next step.
Familiarize Yourself with Business Concepts.
You will be reevaluating these concepts throughout the process:
- business objective(s)
- your mission statement
- the keys to success
- perform an industry analysis
- perform a competitor analysis
- your strategies
- the marketing plan
- management and organization structure of your business operations
- financial pro formas
- the break-even analysis
- computing your financial/investment requirement.
What Concepts/Headings Should I Include?
There is no one-size-fits-all to writing a business plan; however, every business plan should include at least twelve concepts:
- The Executive Summary
Summarizes what is found in your business plan. Simply put, summarize your business. Keep it short and sweet. No need to write 10 pages here.
2. The Company Description
Introduce investors to your company and your business concept. One to two pages is fine. Try to keep it on the shorter side, though. Hit all of the relative points.
3. Industry Analysis
Provide a picture of your industry. What is your company’s position as compared to other companies that sell similar products or services? Research Porter’s Five Forces, if necessary.
4. Your Market and Competition
What are you getting into? What is your market share?
5. Goals and Strategies
Where do you intend to go? How will you get there?
6. Your Products/Services
Describe your product and/or service and how they fit with your goals and strategies.
How are you going to position your business? Forecast your sales, but keep them as accurate as possible. Do not make these numbers up UNDER ANY CIRCUMSTANCES.
Introduce the reader to the members of your team.
How is the business going to be run?
10. Financial Pro Formas
Your operating results, hypothetical earnings of course. Give a picture of potential profits.
11. Financial Requirement
How much financing do you need to complete your plan? Be realistic. Investors do not want you to go to them in a month and say “I underestimated and I need more funds.”
Have you got supporting materials, such as graphs? Hope so. You need to support your numbers somehow. Do not include unnecessary items just to fill in the spot. Use graphs and other exhibits to support your story.
Keep in mind the overall appearance of your business plan. Print your plan on high quality materials and bind them. You should have balanced pages utilizing standard fonts and margins. Separate your sections; include titled headings and a table of contents. As for colors, choose shades of reds or blues; nothing wild. Ever tried to read something that is blinding?
Of course, proofread, proofread, and proofread again. Have mistakes? FIX THEM. If you need further help, try searching for layouts on the internet. There are websites out there that have a step-by-step option to building business plans. There is no shame in asking for a little help either. You might even find an investor that is willing to help you. Once you are finished, move to the next step: Prepare to pitch yourself to potential investors!