Do you want your business to be successful? Of course. Every business looking to succeed would be wise to take a little time to create a business plan. This important document will help you through any stage of your business, from startup to expansion to financing a new product or idea. Writing a business plan can help your business increase its chances of success, which is especially helpful during these tough financial times.
Writing a business plan will be a lot of work. However, you will find that the process is not that difficult once you get started. One of the hardest parts of writing a business plan is getting started. Of course, having some tips and guidelines to follow can be especially helpful. Here are some ideas to help you write your business plan.
What do I need to include?
Your business plan should show that you know what you are doing and understand your business. Generally, this knowledge and information is divided into separate sections. This helps you keep your business plan organized and easy to write. Let’s look at each of the nine sections in a little more depth.
Executive Summary
Since your executive summary guides your business plan, it is important that you carefully construct this first section. In fact, the executive summary is so important that it is placed directly after the cover page, even before the table of contents. Many find that writing this key section works best when completed last. The executive summary serves as a synopsis of all sections of the business plan. If you wait until the end, you’ll be better able to write a cohesive and comprehensive executive summary.
Within the executive summary, you will include your company’s mission statement. This mission statement should not be long, probably about four sentences, but it should be carefully worded. Many say that the mission statement is the most important part of the overall business plan.
Since your mission statement is only a few pages long, your executive summary will allow you to further expand on the key points mentioned in the mission statement. Consider including your business history, biographies of key players, an overview of the business, including locations, employees, and available products and services. You can also discuss future goals and plans. Use this section to really engage your readers.
Many find that a bulleted format is ideal for this section. This section should be easy to read and scan so potential investors can easily get an overview of your business. The biggest mistake many make is including too much information. Make sure your information only covers one or two pages.
Market analysis
In the second section of your business plan, you will cover the analysis of your specific market. During this section, you will demonstrate your business’ ability to succeed. Success depends on accurate and complete market analysis. This section will show that you have done your research. Use this section to sell your business to potential investors. Show them how your business can be successful.
Thoroughly cover the market for your business. Talk about your industry and use specific details to support your statements. Details like industry size, growth rate, and customer pool will help you showcase your business. Include as many details as possible. Do not fill this section with generalized information. Make sure it is industry and business specific.
In this section you should also include the results of any market research your company has conducted. Also briefly discuss your competitors and their strengths and weaknesses. You may want to cover how your services will attract customers more than your competitors.
Detailed description of the company
After showing how your business can be successful in your specific market, it’s time to paint a complete picture of your business. Cover your business in detail, including information about the type of business, the target market and how you can meet their needs, and the distinguishing factors that make your business unique.
Remember that each section of your business plan will overlap. This means that you can cover the information more than once as you move from one section to another. This is good. Your business plan can be considered as a whole or it can be viewed as individual sections. This means that each section should include all the key information. Don’t leave out important information just because you think it’s been covered in other sections.
Structure/Management of the Organization
This section will detail specific information about your staff and executive positions. Cover how your company will divide the work. Who will do what jobs? How does your business management structure work? Include biographies of key business personnel, including the company’s owners, board of directors, management, and other executives. You should also discuss employee compensation and benefits.
In this section you will demonstrate your company’s ability to succeed through your management plan. Also, it will help investors realize the potential of your company as far as an employer is concerned. Investors know that good, long-lasting employees can help your business succeed. Therefore, they look for strong and effective management, as well as the ability to retain and inspire employees.
Marketing
How are you going to get the word out about your business? In this section, you will detail your plan. You can also discuss how your marketing strategy will lead to growth. Be complete and detailed in your plan.
Offers of products and services
This section may sound like a simple list of your available products or services. While this is one aspect, there is other information that should be included in this section. For each service detail the specific benefits of the products and services you offer. Discuss the advantages you have over your competitors with a specific focus on products and services. Also discuss how you can expand your product and service offerings as time goes on.
Application/Funding Requirements
A business plan is often a tool used to help your company obtain the necessary funds. If this is the case, be sure to include a funding request in your business plan. Be specific. Remember that potential investors need a thorough understanding of your applications so that they can make a decision on whether or not to approve your application. Be sure to include the following information:
• What you need immediately in terms of financing
• Financing needs in the coming years
• How the money will be spent (be specific)
• Do you want loans, investors, partners, etc.?
• How you plan to repay the loan
Financial state
This section is often carefully considered by potential investors. Helps investors determine the financial solvency of your company. It won’t just discuss your current financial status. In this section, you will cover your financial past, your current state, and your goals for the future. Include recent years’ income statements, balance sheets (both prior and projected), projections, and available warranties.
It can be especially effective to include tables and graphs to better illustrate your financial plan. Including graphs and charts will help investors see the growth potential of your business and increase the likelihood that your loan will be approved. Remember that the amount of financing desired must be in accordance with your financial projections. Investors want a return on their investment and will not invest more than they receive.
Other information
At this point, you may feel like you’ve covered everything. However, there may be other information you want to include that doesn’t fit into one of the sections above. This is the place where you will include it. You may want to list specific details in this section and then reference them in the other sections. This will keep your business plan from being cluttered with lengthy details and information. Many business plans include items such as: credit reports, letters of recommendation, license and patent information, legal documentation, executive resumes, and a list of business partners, including your attorney, accountant, and business consultant.
Starting
You may be feeling overwhelmed at this point by the sheer amount of information you need to include in your business plan. Be sure to use an easy to read format. This means that you should definitely use headings, bullets, and lists. Focus your writing on your audience. If the purpose of the business plan is to obtain a business loan, make sure your writing conveys this message.
How long should my business plan be?
Try to keep your business plan between 20 and 40 pages. This may sound like an impossible task. However, much of the final length will be subject to formatting. Using bullet points, lists, charts, and images will not only make your business plan more effective, but it will also help make your business plan longer.
As you create your business plan, tailor your presentation to fit a busy professional. Suppose they will only spend 10 to 20 minutes looking at your plan. Be sure to thoroughly sell your idea, needs, and business during this short period of time. Further engage your audience by using a clear format, easy-to-read content, thoughtful writing, and correct spelling and grammar.